The objectives of compensation policy are as follows −
● Allure suitable staff.
● Keep qualified personnel.
● Develop reward structures that are equitable with logical and fair pay relationships between differently valued jobs.
● Manage pay structures to mirror inflationary effects.
● Assure that rewards and salary costs handle changes in market rates or organizational change.
● Appraise performance, duty, and loyalty, and provide for progression.
● Abide with legal requirements.
● Maintain compensation levels and differentials under review and control salary or wage costs.
Clearly, managing a firm’s compensation policy is a complex task as it facilitates systematically administered and equitable salaries, reconciles employees’ career aspirations with respect to earnings, aligns employees’ personal objectives with those of the organization, and keeps the firm’s costs under control.
To summarize, compensation management is a synchronized practice that includes balancing the work-employee relation by facilitating monetary and non-monetary benefits for employees.