Job Offers & Compensation
Essential Terms You Need to Know to Negotiate a Compensation Package

Negotiating a fair compensation package can be challenging for both parties. The goal is simple: to arrive at a final compensation package that offers mutual
rewards. This may mean both sides may need to give a little and to get a little. If both sides feel the other compromised, it is a win-win for everyone! The most productive salary negotiations occur between people who realize that they have a common goal.

Before you sign on the dotted line, here are several important terms and details that you should examine.

Job offer letter

This is a letter an employer sends to a candidate to offer them the position formally.  It usually includes details about the position, compensation, and benefits. The offer is not officially accepted until the candidate has read, approved, and signed the offer letter.


An employee receives compensation in exchange for work.  Total compensation is a combination of your base salary/ wages (money) and the value of any other financial benefits your employer provides.

Benefits /benefits package

Employee benefits are non-financial compensation provided to employees in addition to salaries and wages.  Employee benefits can have a financial value, such as health insurance, dental coverage, paid leave, and sick leave.  It may also include additional perks an employee receives, such as a gym membership or car allowance. Some companies may also non-financial benefits such as telecommuting. Benefits will differ based on the company and the employee’s position within the company.

On-target earnings (OTE)

On-target earnings refers to an employee’s salary plus their bonus and/or commission once they are assigned. They are paid out when the employee reaches their stipulated target metrics.

Key Performance Indicators (KPIs)

A key performance indicator is a measurable value that demonstrates how effectively a company achieves its business objectives.