A PRESENTATION ON

REWARDS AND COMPENSATION SYSTEM

PRESENTED TO: PRESENTED BY:

JYOTI DAHINWAL HARDEEP
2114
REWARDS AND COMPENSATION SYSTEM

• A rewards and compensation system is a set of policies, procedures, and practices that are
designed to reward employees for their performance, contributions, and achievements. The
system includes a range of benefits, incentives, and recognition programs that are offered to
employees in exchange for their work.
• A rewards and compensation system is used as a tool to achieve the company's strategic
goals. The system is designed to motivate employees to behave in ways that align with the
company's overall strategy. For example, if a company wants to increase its market share, it
may design a rewards and compensation system that rewards employees for achieving sales
targets.
TYPES OF REWARDS AND COMPENSATION SYSTEM

• Base Pay: Base pay is the fixed salary that employees receive for their work. It is usually
determined by the job's responsibilities, qualifications, and experience. Base pay can be
adjusted based on factors such as inflation, cost of living, and market trends.
• Bonuses: Bonuses are one-time payments that are given to employees based on their
performance or achievements. They can be paid in cash, stock options, or other forms of
compensation. Bonuses can motivate employees to work harder and achieve better results.
• Commissions: Commissions are payments that are based on the sales that employees generate.
They are usually paid as a percentage of the sales price or revenue. Commissions can motivate
sales employees to achieve higher sales targets.
• Profit-Sharing: Profit-sharing is a system where employees receive a share of the
company's profits. The amount of profit-sharing can be based on factors such as
employee performance or tenure. Profit-sharing can motivate employees to work
harder and help the company achieve higher profits.
• Stock Options: Stock options are a form of equity compensation that gives employees
the right to buy company shares at a discounted price. Stock options can motivate
employees to work harder and contribute to the company's long-term success.
• Benefits: Benefits are non-monetary rewards that employees receive, such as health
insurance, retirement plans, and paid time off. Benefits can help companies attract and
retain employees by offering a competitive benefits package.
• Recognition Programs: Recognition programs are designed to acknowledge and
reward employees for their contributions and achievements. They can include awards,
certificates, and public recognition. Recognition programs can motivate employees to
work harder and feel valued by the company.
 ADVANTAGES

• Attracting and retaining top talent: A reward and compensation system that is competitive
and fair can help attract and retain top talent. This is particularly important in a competitive
job market where talented employees have many options.
• Motivating high performance: A well-designed reward and compensation system can
motivate employees to perform at a high level. By offering incentives and recognition for
top performance, employees are more likely to work harder and achieve better results.
• Aligning behavior with organizational goals: A reward and compensation system can be
used to align employee behavior with organizational goals. This can help ensure that all
employees are working towards the same objectives and that their efforts are focused on
achieving the company's strategic priorities.
• Increasing employee engagement and satisfaction: When employees feel valued and
rewarded for their work, they are more likely to be engaged and satisfied with their jobs.
This can lead to higher retention rates and lower turnover, which can reduce recruitment
and training costs.
• Improving overall organizational performance: A reward and compensation system
can improve overall organizational performance by motivating employees to work
towards the company's goals. This can lead to higher productivity, increased profitability,
and a better reputation in the marketplace.
• Reducing labor costs: By offering incentives for high performance and productivity, a
reward and compensation system can help reduce labor costs. This is because employees
are more likely to work efficiently and effectively when they are motivated to do so.
CONCLUSION

• Overall, a reward and compensation system is an important component of SHRM as it

helps companies to attract and retain employees who can contribute to the company's
growth and success. It is essential that the system is designed fairly, transparently, and
consistently across all levels of the organization to ensure that employees are motivated to
achieve the company's strategic goals.