16. Compensation Management

Summary
Compensation Management is crucial for designing and administering fair and effective pay systems that support organizational goals and employee satisfaction. The components of employee compensation include direct compensation (base salary, incentives) and indirect compensation (benefits, perquisites). The structure involves developing a pay structure and compensation policies.
Factors affecting employee compensation include internal factors such as job value, employee performance, company budget, and organizational policies, as well as external factors such as market rates, economic conditions, legal requirements, and geographic location.
Effective compensation management ensures that employees are fairly rewarded, motivated, and aligned with the organization's strategic objectives, while also addressing external and internal influences on pay decisions.