2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com
3. Perspectives of compensation
• Compensation is a broad
term and may be
interpreted according to
organizational and
individual perspectives.
5. Organizational Perspective
• Compensation is viewed as a
segment of human resource
management that emphasizes
planning, organizing and
controlling the various types of
compensation systems for
rewarding employees who
perform their work or render
service.
6. Organizational Perspective
• Since compensation constitutes
a major part of the operating
cost (as high as 40-50%),
therefore, organizations strive
to keep the cost of
compensation as low as possible
without compromising the
quality and capability of
employees.
7. Employee’s Perspective
• Within organizations, individual
employees have different
interpretations of compensation.
They often view compensation as
reward entitlements and obligations
are determined based on the
employment contract, the value of
the job, the level of personal
contribution, and/ or the level of
performance.
8. Employee’s Perspective
• Employees, who perceive the
procedures of distributing
compensation and the allocations of
compensation that they receive are
fair, will be motivated to meet
ultimate goal of the organizational
compensation system : efficiency,
equity and compliance of laws and
regulations.
