What are the characteristic of a compensation system ?

The characteristic of a compensation system

  • Long term perspective
  • Variable pay component
  • Based on individual and/or team effort(=pay for performance)
  • Goal oriented
  • Mix of monetary and/ non monetary rewards

Perspective on compensation: There are 2 types of perspective

Organization’s perspective

  • Reward for work
  • Monetary and non monetary form
  • Term of employment contract
  • Based on job value, contribution and  performance

Employee’s perspective:

  • Livelihood
  • Motivation
  • Just and fair determination
  • Commitment towards achievement of organization goals

HR-Professionals 12 Compensation 12


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