By Dr. Marie Gould Harper
Program Director, Management
Most of us are concerned about the base salary when we start the interview process for a new job. Although some companies provide a particular salary or salary range for a position, few companies provide information about other factors, such as benefits, in the initial recruiting phase.
However, there appears to be a new trend toward more organizations providing total benefits information on their websites. This practice allows potential employees to see and better understand what is being offered.
What Is Total Compensation?
Total compensation is everything a company provides an employee in exchange for performing a job. It includes base salary, bonuses, benefits, perks and on-site amenities, such as free cafeteria meals.
According to business writer Shannon Webster’s article, “The Difference between Base Salary & Total Compensation” on Texas news site Chron, your base salary is defined as “the amount per hour or per year that you are paid for performing your job.” The typical benefits included in total compensation packages include “health insurance, performance bonuses, vision and dental insurance and retirement plans.”
Today, many organizations provide an annual statement that keeps employees informed of what their total compensation package provides.
Why Total Compensation Information Is Important to Know before You Accept a Job Offer
When you receive several offers of employment, you need to ensure that you are comparing apples to apples. For example, IBM might offer you an annual salary of $80,000, but Google is willing to pay you $90,000 to do the same job.
Some people might think the decision is a no-brainer – take the job that offers more money. In this case, your choice would be Google. However, are you actually getting $10,000 more?
For example, consider the following scenarios:
- What if IBM offers four weeks of vacation and Google offers two weeks of vacation for the first three years?
- What if IBM offers a $1 for $1 match on its 401(k) plan, whereas Google offers only $.25 for $1?
- What if IBM offers a health plan with a $1,000 deductible and no co-pays, but Google provides a plan with a $1,500 deductible and a $40 co-pay for most services?
- How do the insurance premiums compare and how much are employees expected to pick up?
- What if IBM will pay your relocation costs, but Google will not?
Suddenly, having $10,000 more in base salary might not be the right choice for you.
Having the total picture is crucial before you officially accept a position. Always make sure you get all the information you need to ensure that you aren’t losing money by accepting a job offer.
About the Author
Dr. Marie Gould Harper is the Program Director of Management. She holds an undergraduate degree in psychology from Wellesley College, a master’s degree in instructional systems from Pennsylvania State University and a doctorate in business from Capella University. She is a progressive coach, facilitator, writer, strategist and human resources/organizational development professional with more than 30 years of leadership, project management, and administrative experience. Dr. Gould Harper has worked in both corporate and academic environments.
Dr. Gould Harper is an innovative thinker and strong leader, manifesting people skills, a methodical approach to problems, organizational vision and ability to inspire followers. She is committed to continuous improvement in organizational effectiveness and human capital development, customer service and the development of future leaders.
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