Compensation Management: Compensation, Wages & Legislation

Read Complete Research Material

Compensation Management: Compensation, Wages & Legislation


The field of compensation is a central area of any department of human resources in the course of their work to obtain, maintain and promote an adequate workforce. Apply a fair and productive all the techniques available in this area represents one of the main challenges of their work. So we can define the process for compensation or reward as the rewards that employees receive their work. This paper will be discussing chapter five of the book i.e. Legislation and Compensation.

Table of Contents





Administrative Compensation6

Objectives of Management Compensation6

Comparative Studies of Wages and Salaries7

Compensation Data Sources7

Procedures for Comparative Studies of Wages and Salaries8

Determining the Level of Compensation8

Levels of Payment8

Structure of Compensation9

Challenges of the Area and Compensation10

Changes Induced By Technology10

Union Pressure10


Internal Policies of Salaries and Wages11

Government Regulations on Labor11

Compensation and Legislation (Wages Act)11

General Provisions12


Payment of Special Conditions of Labor13

Payment of Overtime13

Payment of the Weekend13

Payment of Public Holidays14

Additional Payment for Work in the Evening and Night Time14

Payment and Terms of Payment of Salary14

Retention Payroll15



Compensation Management: Compensation, Wages & Legislation


This paper will be discussing the compensation management, chapter five of the book, “Compensation Management in a Knowledge-Based World” (Henderson, 1997). The main theme of this paper will revolve around Compensation, Wages & Legislation. The compensation (wages, salaries, benefits) is the gratification that employees receive in exchange for their work. The administration of the personnel department to ensure the satisfaction of employees, which in turn helps the organization to obtain, maintains and retains a productive workforce.

The results of the dissatisfaction may affect the productivity of the organization and result in deterioration in the quality of working environment. In severe cases, the desire for better compensation can decrease performance, increase the level of complaints or lead employees to seek a different job. Moreover, low interest function can lead to poorly compensated absences and other passive forms of protest. An inadequate level of compensation also leads to difficulties, feelings of anxiety and distrust by the employee and a loss of profitability and competitiveness of the organization (Henderson, 1997).



Rudimentary pay management has existed for as long as there have been employers and employees. Owners of typically small, preindustrial businesses commonly weighed their ability to pay against employee responsibilities and contributions in order to determine compensation. The rapid development of corporations, multiplication of administrative hierarchies, and specialization of jobs in the 20th century removed owners from the day-to-day evaluation of jobs (Henderson, 1997).

Administrative Compensation

The compensation is not the only way to link performance with overall business strategy. The human resource planning, recruitment, selection, placement, development, performance appraisals and career planning help coordinate individual efforts with overall business strategies. Direct compensation includes wages and salaries, incentives and profit sharing, plus indirect compensation in the field of employee benefits (Henderson, 1997).

Objectives of Management Compensation

These objectives create conflicts and compromises must be sought. Another essential aspect is what the vast potential of the area to promote equality criteria between people (U.S. Department of Labor, 1991).

Acquisition of qualified personnel. The compensation must be high enough to attract ...
Related Ads