INTRODUCTION Compensation is a systematic approach to providing monetary & non monetary value to employees in exchange for work performed. Compensation may be defined as money received in performance of work and many kinds of benefits that an organization provides to their employees.
OBJECTIVES To recruit & retain qualified employees. To increase or maintain morale. To determine basic wage & salary. To reward for job performance.
COMPENSATION COMPONENT compensation monetary Non monetary direct indirect
COMPONENT Direct compensation Base Pay Bonus Long term incentives Perks or perquisites
NON MONETARY Enhance dignity & satisfaction from work performed. Promote social relationship with co- workers. Allocate sufficient resources to perform work assingments. Offer supportive leadership & management. Enhance physiological health, intellectual growth.
FACTOR AFFECTTINGExternal Internal Demand & Compensation supply of labour policy Cost of living The org. ability to Society pay Labour unions Job analysis & The economy description Employee
CONCLUSION We can say that goodcompensation can increase theproductivity of an organizationbecause its provides variousrewards, bonus, schemes etc. andits compulsary for everyorganization.