Role of compensation in organizationCompensation Management

Prepared By

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Manu Melwin JoyAssistant Professor

Ilahia School of Management Studies

Kerala, India.Phone – 9744551114

Mail – manu_melwinjoy@yahoo.com

Role of compensation in organization

• Compensation is fundamental to

organization formation and its

existence. People work to earn

their living and organization

compensates employees by

providing monetary and non

monetary benefits and other

amenities for producing goods and

services.

Role of compensation in organization

• Human resource practices in

general and compensation

systems in particular have

been shown to be highly

related to organizational

performance.

Role of compensation in organization

• The role of compensation in

organization in terms of gaining

and sustaining competitive

advantage has undergone

paradigm shift. Role of

compensation in organization is

strategic rather than merely

restricted to economic

compensation for providing labor.

Role of compensation in organization

• Compensation is today a key

tool for attracting, retaining

and utilizing a motivated and

productive workforce

necessary to enable the

organization to compete

successfully.

Changing paradigm of compensation management from past to present

Role of compensation in organization

• Organization with proper

system for managing

compensation shall be able

to recruit and retain

competent employees for

organizational effectiveness

and success.