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Abstract
Compensation management is the act of distributing some type of monetary value to an employee for their work by means of the company’s policy or procedure. In basic terms, it is paying an employee based upon the decided pay and benefit package for the position. The goal of compensation management is to find quality people who perform quality work and then compensate them in order to retain them and reduce turnover rate. Some different type of compensation include salary, overtime pay, commission, bonuses, and benefit packages that might include health and dental insurance, vacation time, and retirement savings. In today’s intensely competitive and global marketplace, competitive advantage lies not just in differentiating a product or service or in becoming the low cost leader but in also being able to tap the companies special skills or core competencies. Therefore skilled and efficient employees of a company are now considered as one of the core competencies of a company. To attain the objectives of a company HR plays a vital role and one of the most used tools by HR in order to ensure motivation for each and every employee is a satisfactory “compensation package”. Employees need to be compensated for their efforts based on volume of production.