"If you pick the right people and give them the opportunity to spread their wings - and put compensation and rewards as a carrier behind it - you almost don't have to manage them." -Jack Welch
Compensation-“Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction.”

Compensation is a tool used by management to maintain efficiency. The labor market is highly competitive and war to retain and attract best of the talents is on peak. Therefore to develop revise and amend an equitable compensation plan periodically and link it with the emerging business needs and strategies is vital. Accordingly, the objectives of compensation plan are to:
• Recruit and retain qualified employees.
• Increase or maintain morale/satisfaction.
• Reward and encourage peak performance.
• Achieve internal and external equity.
• Reduce turnover and encourage loyalty.
These major objectives are directly correlated to the fairness and competitiveness of compensation.


Current compensation trends in India
• Average salary increase (6.6 %) dip across all employee levels during 2009. It was for the first time in six years that India saw single digit salary increases due to downturn.
• Rise in the variable component.
• Sharper performance differentiation and the two most critical areas for companies to focus on are leadership and communication.
• One of the greatest challenges for a company during a financial crisis is in retaining and motivating its workforce, particularly the top performers.