Meaning of Compensation Management. Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.
Meaning of Compensation Management
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Meaning of Compensation Management
According to Bangladesh Labor Act 2006-” Wages means all the remuneration expressed in terms of money or capable of being so expressed, which would, if in the terms of employment, expressed or implied, were fulfilled, be payable to a worker in respect of his employment or of work done in such employment, and includes any other additional remuneration of the nature a foreside which would be so payable…[Sec-2(XlV)]
Special Definition of ‘Wages’ Includes ( Sec. 120)-
Any bonus or other additional remuneration
Overtime, holiday or payment
Any award or settlement amount
Any sum payable at the time of termination of employment
Any sum payable due to lay-off or suspension
Responsible Persons for payment of wages-
Employer
CEO
Manager of the establishment
Other people respond to the employer for supervision and control of the establishment
Employee Benefits Program
Building employee morale and engagement
Enhancing their Employment Value Proposition
Becoming and remaining a Preferred Employer
Reinforcing their Employment Brand
Attracting quality employees
Building employee loyalty and retaining key talent
Increasing their employees’ disposable income
Differentiating their employment offering
Objectives in compensation management
To help the organization achieve strategic success while ensuring internal and external equity.
Internal equity- ensures that more demanding positions or better-qualified people within the organization are paid more.
External equity – assures that jobs are fairly compensated in comparison with similar jobs in other firms.
Acquire qualified personnel
Retain current employees
Control costs
Advantages of Fair Compensation System
It will have a positive impact on the efficiency and results produced by employees.
It will encourage the normal worker to perform better and achieve the standards fixed.
It will be applied to all the levels of the organization as a general system.
It will raise the morale, efficiency, and cooperation among the workers.
Encouragement for those who perform better and opportunities for those who wish to excel.