The compensation agreement defines the terms and conditions of employment of a person in the company, even if an employee is recruited or receives an increase. Contract agents are generally not used for Bewillik employees. If a new company asks you to sign a compensation agreement, check the contract carefully to make sure you agree with the specified terms. Employers use compensation contracts to account for a negotiated change in employee wages. For example, a new worker who has completed a trial period can negotiate with an employer the new level of wages he or she will receive and both parties need the compensation agreement to account for the change in compensation. A compensation agreement is usually put in place at some point during the period of employment (for example. B after a trial period or annual review process) to outline possible salary changes, such as an increase or bonus, or even changes in non-monetary compensation, such as extra leave or personal days. The agreement merely records the employee`s discounted salary and other details related to the employee`s new compensation terms. An agreement on the compensation of training costs with a minor or on the compensation costs associated with the fulfilment of the legal obligation of training of the employer is in null and void. The staff agreement may also set productivity targets that the employee must meet and define the reasons for dismissal.
According to estimates for 2012, 14 to 19% of employers declare a compensation agreement for training costs with one or more of their employees. This percentage is higher in large companies. Among employees, the percentages are 9 to 12%, the rates are higher for the youngest, Estonians (compared to other nationalities) and the most educated. Regardless of the importance of the debate, the question remains whether executive compensation maximizes the value of the company, given that there are still several challenges in assessing causality in this area. Directors, consultants and executives invest a lot of effort and time in the development of compensation agreements, taking into account the following points: A compensation contract usually covers different topics at a given time during the term discussions: the agreement itself covers an employee`s new salaries and other new details on compensation. Employment contracts and compensation agreements can also be a good idea if the employee is familiar with sensitive and confidential information about your company. They may include confidentiality clauses to prevent the employee from using the information for personal gain or passing it on to others outside the organization. Often, employment contracts are useful in encouraging a highly qualified candidate to leave your competition and work for you instead. By promising individual job security and other positive features in an employment contract, you can offer yourself an attractive offer. Finally, the use of a written employment contract and a compensation agreement gives you more control over the employee. If the contract sets employee productivity standards and mentions the reasons for dismissal, you may have more fluid experience of terminating an employee who does not meet the employment criteria.