Compensation is the total cash and non-cash payments that you give to an employee in

exchange for the work they do for your business. It is typically one of the biggest expenses
for businesses with employees. Compensation is more than an employee’s regular paid
wages. It also includes many other types of wages and benefits.

Cost – Containment
Objective
Motivating
Productivity – Providing
Equitable
Non – Discriminating
Sustaining
Adequate Legal Compliance
Time - Bound
Inducing Loyalty
Obligatory
No Insecurity

1. Cost – Containment – is the business practice of maintaining expense levels to

prevent unnecessary spending or thoughtfully reducing expenses to improve
profitability without long-term damage to the company.
2. Objective – compensation should be based on the task being performed by the
employee as well as his/her skills and knowledge about the job.
3. Motivating – It is common knowledge that employers use different compensation
strategies to motivate their employees. Most often individuals are provided with base
pay to engage with the company and ensure their continued participation.
4. Productivity – Providing – pay ought to guarantee that workers are upbeat and
fulfilled. These conditions result in more noteworthy profitability.
5. Equitable – compensation is reasonable for all if the compensation is proportionate to
the worker's commitment to the association.
6. Non – Discriminating – compensation should ensure that no one suffers partition. It
relies upon execution free from predispositions subject to age, religion, basic status,
sex, and other biased parts.
7. Sustaining – compensation should provide for the worker's needs and is worried
about his/her welfare. It ought to likewise support the association's objectives and
targets by ensuring excellent representative execution.
8. Adequate Legal Compliance – compensation should stick to the law. It should not
be below the minimum wage. It should also be provided with mandated benefits from
the government.
9. Time – Bound – compensation on time should be granted. Payment of wages and
wages should not be caused by delay.
10. Inducing Loyalty – compensation should be encouraged to stay in the company.
Generally speaking, employees who are happy and satisfied with compensation,
benefits and work environment are not going to think about leaving their jobs.
11. Obligatory – companies have a duty to pay their staff well. This particular
responsibility is indicated by the employment contract duly signed by representatives
of the company and the employees.
12. No Insecurity – the pay package should make the employee feel secure. He/she must
believe that what he/she will receive can satisfy his/her basic needs.