3/7/12 Compensation Management

L E AR N I N G O B J EC T 1 V E S

Afirr reuding (his chapter, yon should bf abk lo undcrstand —

■=> Concept (rf compermaTion & ObjecLvcs and imparLance of

compensation

Undersland lhc cornponents and dimensions of rompersaüün ^

The dirneniions of nüTi'eompcnsaiicm sysiem ^ Fatlor's eFTcclmg

cmpioycc nunpensalion

CONCEPT OF COMPENSATION
Cumpcnsalion is a ¿¿yslffmatjc apprüaL'h to providing morctaiy valué to employees in e ítthange fur
worít performed. It is a tool used by ritónagemerii t'or a variety of purposes <o funher the e*isience of ihc
company.

It MAY be adj usted according LO IHC business needs, goals and avallable resarces.

Definitíon

Compensaron may be defined M money received ¡n performance of worií and man y tunda of servicia
tind bcrcfils ihat an orgam tatior provides to the ir cmployccs,
Compensation is a sysiemarit; appruach of pmvlding mQjietary vil IR loemployces irt ex^hange for worfc
rnay help id achieve severa! purpOMS. sudi as fecniiUnent, Job performance jmd jtib satififécüOTi [t is
performed. [i
al so defined as (he paekage of quantií'iabJe re wards an employee neteives ft>r her or his labour. Il
represents both, the mtrmsit; (psychoJngical mindscts rcsuLling from jab performance) and extriruic
íinctuding boih nnonctaj^ and non-monciary) Fewarrfi, The Krm, compensation, refera ro ail forms ot finanfial
recurrís and tangible boncElth ibat an employee recaves as a part of cmploymcnl relaüonship. In
[heglobalization era. uvhen: the business en vi ronment has becotrie increasmgly comples and
challengmg, Jesa^nuig jn effective compensation prognür tq ajtraet and rctain talcnt is an importan!
l'urictiun of urganitational cffeclivcncss.

Bhatia, Kanchan. Compensation Management. Mumbai,

IND: Global Media, 2010. p 8.
http://site.ebrary.com/lib/bibliobosque/Doc?id=1 0416304&ppg=8 Copyright ©
2010. Global Media. All rights reserved.
May not be reproduced in any form without permission from the publisher, except fair uses permitted under U.S. or applicable copyright law.

site.ebrary.com/lib/bibliobosque/docPrint.action?encrypted=21905b0b351b927ba6916980a2091370. 1/12