“Compensation and Benefits in Human Resource Management” an Overview of Compensation Policy, Reward System, Monetary Value of the Job, and Variable Compensation Among the Health Care Workforce

“Compensation and Benefits in Human Resource Management”

An overview of Compensation policy, Reward system, Monetary value of the job,

And Variable compensation among the health care workforce

THE REWARD & COMPENSATION SYSTEM

What is compensation? When the term “compensation” is brought about within the topic of human resource management, one automatically assumes that this means the monetary aspect of reward in exchange for skills or services rendered. However, in the world of today, the meaning of the term has expanded to include both monetary and non-monetary pay received in return for having done your job or part in a particular company. It includes many different forms of payments, such as bonuses, profit sharing, overtime pay, recognition rewards, checks, sales commissions and other discretionary benefits that have the potential to encourage and motivate workers to stay within the company and to do their very best at all times. With this in mind, the writers of this paper aim to tackle the types of compensation, the factors affecting compensation, challenges in creating a compensation or pay system structure, as well as the steps in developing a pay structure and laws and implementing guidelines concerning the topic within the Philippine setting.

As a Core Function Compensation and benefits serve core functions in human resource management (Daly, 2011). Contrary to popular belief, compensation involves much more than the yearly or monthly salary received for work, skills, and effort. Though adequate pay is important, salary is only part of the holistic compensation of employees. To illustrate the difference between 'mere' salary and compensation, Daly in 2011 cited a very good example between the two concepts of good salary and holistic compensation:

A young couple, Elmer and Jo Santos, both work in the same city as nurses for different companies. Elmer Santos makes $70,000/month while Jo Santos makes $60,000/month. Elmer often works 70-75...