BASIC  OF  COMPENSATION    

Compensation is what workers receive in exchange of their contribution in the organisation. In general, employees offer their services for three kinds of rewards. Pay refers to the salaries and base wages employees generally receive. Compensation forms as commissions, bonuses and profit sharing plans are incentives designed to encourage workers to generate results beyond normal expectation. Benefits like, medical, insurance, retirement, recreational etc., represent more indirect kinds of compensation. So, the term compensation is a broad one including pay, incentives, & benefits offered by employer for hiring the services of employees. Additionally to these, managers ought to observe legal formalities that offer physical and financial security to workers. All of these issues play vital role in any HR department's efforts to get, maintain and retain an effective work force.