COMPENSATION AND BENEFITS

Compensation and benefits is a sub-discipline of human resources, focused on employee

compensation and benefits policy-making. While compensation and benefits are tangible, there
are intangible rewards such as recognition, work-life and development.
When most people hear the term compensation they think about "what a person is paid".
Although this is true, it is only one aspect of a complex topic. Compensation includes not only
salary, but also the direct and indirect rewards and benefits the employee is provided with in
return for their contribution to the organization.
The main difference between compensation and benefits lies in the aspect related to monetary
value. Compensation refers to pay or the exchange in monetary terms of the work performed by
the employee and is paid by the employer. In other words, benefits do not involve money but are
presented in form of value.

To determine compensation, organizations should develop a compensation and rewards program.

This type of program outlines an equitable process for compensating employees. A well-
structured program with a good balance of wages, benefits and rewards will support an
organization to remain competitive in today's labor market and ensure sustainability in the future.

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