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Compensation System

compensation system is the sum total of all monetary and non-monetary benefits provided to employees in exchange for their willingness to work. Compensation can be broken down into three general categories. One of the core functions of human resource management is the development of a compensation system, In determining effective rewards, however, the uniqueness of each employee must also be considered. people have different needs or reasons for working, the most appropriate compensation system will meet these individual needs. To a large degree, adequate or fair compensation is in the mind of the employee.


Compensation system can be broken into three  category. 


Direct financial compensation is monetary compensation, such as wages, salaries, commission and performance payments. This is the type of compensation that we'll be focusing on in this lesson


Indirect financial compensation includes compensation that has financial value but does not consist of a direct monetary payment to an employee. You can think of it as a non-cash benefit. Examples include paid time off, health insurance, life insurance, disability insurance, stock options plans and services provided to employees, such as financial counselings.


Non-financial compensation doesn't have any monetary or economic value per se, but it involves the satisfaction an employee receives from the work environment



We will analyse your organisational structure and our compensation experts will design best compensation system suitable to your organisation,