COMPENSATION AND REWARDS HR

3. Compensation
The term compensation is used to indicate
the employee’s gross earnings in the form of
financial rewards and benefits.
When managed correctly, it helps the
organization achieve its objectives and
obtain, maintain, and retain a productive
workforce.
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4. Types of compensation
 Direct Financial Compensation
– pay received in forms of wages, salaries, bonuses
and commissions.
 Indirect Financial Compensation(benefits)
- All financial rewards not included in direct
compensation. For examples workers
compensation, Family & medical leave, Disability
Protection
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5. Types Of Compensation (Cont’d)
 Nonfinancial Compensation
- Satisfaction person receives from psychological &
or physical environment in which person works.
For examples, skills variety, experiences, good
working conditions, flextime
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6. Reward
 a reward is a pay-off for performance which is
directly concerned with the level of motivation and
job satisfaction.
 Therefore, management of reward in an
organization helps to motivated and retain
employees at work
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7. Types of Rewards
 Intrinsic reward
 Extrinsic reward
Financial reward
Performance based reward
Membership based reward
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8. Objectives of Compensation & Reward
Acquire qualified personnel
Retain current employees
Reward desired behaviour
Control costs
Facilitate understanding
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