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Compensation Management Definition
The compensation Management process is about the study of basics concepts, subjects, and methods that are associated with designing, managing, and studying the compensation and benefits for increasing administrative performance and good staffing. This is the compensation management definition by the authors.
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- Explaining the job evaluation procedure
- Describing the historical implications of the growth of planned compensation
- Developing a compensation review and compensation program
- Studying about diverse pension plans and describing factors to accept it
- Determining the categories of workers and discussing around pay benefits
- Comparing merit plans and inducement pay plans
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Importance Of Compensation Management
To make employees extremely motivated to work for the organization, they are rewarded with the right packages which are the ultimate compensation management objectives. This is the key goal of compensation systems of a key aim of the compensation system. While fixing compensation for the employees, it is essential to look at the matter both from management and the employee’s perspective. The importance of compensation management in hrm enhances the manifold when an organization employs highly talented individuals as professionals.
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How to Develop A Total Compensation Strategy
Here are the critical components of a compensation strategy or strategic perspectives of compensation or guiding principles of compensation strategy:
- Defining the compensation philosophy.
- Linking compensation to overall business strategy.
- Changing the culture and reinforcing it with compensation.
- Rewarding the behaviors that drive the results.
- Thinking total compensation
Salary ladders, evaluation, and analysis, duties, and responsibilities are the components of compensation management.
Types Of Compensation
There are essentially two types of compensation that includes-
- {A.} Direct Compensation- Salary and health advantages belong to direct compensation in HRM. Responsibilities of Compensation management executives should supply pay scales and incomes for the positions in a company.
- {B.} Indirect Compensation- The added benefits aside from wage and health advantages come under indirect compensation in HRM. Promos, rewards, leisure benefits, claims, incentives, repayment, reimbursement, remuneration, and persona; training, etc. become part of indirect compensation.
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