Thursday, 15 November 2012

What is Compensation


What is Compensation?

In a layman’s language the word Compensation means something, such as money, given
or received as payment or reparation, as for a service or loss. On the other hand, the word
Reward means something given or received in recompense for worthy behavior or in
retribution for evil acts.

The word Compensation may be defined as money received in the performance of work,
plus the many kinds of benefits and services that organizations provide their employees.

On the other hand, the word Reward or Incentive means anything that attracts an
employees’ attention and stimulates him to work. An incentive scheme is a plan or a
programme to motivate individual or group performance. 

An incentive programme is most frequently built on monetary rewards (incentive pay or
monetary bonus), but may also include a variety of non-monetary rewards or prizes. 

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