Short Note on Compensation

Question

Write short note on Compensation?

Answer 1

In layman’s language the word ‘compensation’ means something which is money, provided or received as payment for service. The word compensation may be defined as money received in the presentation of effort, desirable the numerous kinds of benefits and services that organization provides their employee. It refers to wide range of financial and non-financial rewards to employee for their service rendered to the organization. It is paid in the form of wages, salaries, special allowance and employee benefits such as paid vacation, insurance, maternity leaves, free travel facility , retirement benefits etc.

According to Wendell French,” Compensation is a comprehensive term which includes wages, salaries and all other allowance and profits.” Wages are the compensation paid for trained, semi-skilled and unskilled operative workforce. Salary is the remuneration of those employees who provides mental labour to the employer such as supervisor, office staff, executive etc. wages are paid on daily or hourly basis whereas salary is paid on monthly basis.