COMPENSATION MANAGEMENT
HRM3705
Chapter 1
Strategic Compensation: A Component of Human
Resource Systems
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
, Learning outcomes of chapter 1
Once you have completed study unit 1, you should be able to:
• define and critically discuss the context of compensation
• differentiate between tactical and strategic decisions and discuss the
relevant concepts
• describe how the compensation function fits into the HR department
• critically discuss the compensation department's main objectives
• discuss the difference between cash compensation (direct
compensation) and benefits (indirect compensation), and define
each of the direct and indirect forms of compensation
• discuss how compensation professionals relate to various
stakeholders
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
, What Is Compensation?
Compensation represents the rewards employees
receive
i ffor performing
f i ththeir
i jjob.
b Th
They are either:
ith
• Intrinsic—intrinsic
compensation
p represents
p
employees’ critical psychological states that
result from performing their jobs.
• Extrinsic—extrinsic
compensation includes
both monetary and nonmonetary rewards.
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
HRM3705
Chapter 1
Strategic Compensation: A Component of Human
Resource Systems
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
, Learning outcomes of chapter 1
Once you have completed study unit 1, you should be able to:
• define and critically discuss the context of compensation
• differentiate between tactical and strategic decisions and discuss the
relevant concepts
• describe how the compensation function fits into the HR department
• critically discuss the compensation department's main objectives
• discuss the difference between cash compensation (direct
compensation) and benefits (indirect compensation), and define
each of the direct and indirect forms of compensation
• discuss how compensation professionals relate to various
stakeholders
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
, What Is Compensation?
Compensation represents the rewards employees
receive
i ffor performing
f i ththeir
i jjob.
b Th
They are either:
ith
• Intrinsic—intrinsic
compensation
p represents
p
employees’ critical psychological states that
result from performing their jobs.
• Extrinsic—extrinsic
compensation includes
both monetary and nonmonetary rewards.
Prepared by Magda Bezuidenhout, Adapted from
Pearson Education, Inc. Publishing as Prentice Hall
