Compensation management is more than just the means to attract and retain talented employees. In today's competitive labour market, organizations need to fully leverage their human capital to sustain a competitive position. This requires integrating employee processes, information and programs with organizational processes and strategies to achieve optimal organizational results. It consists of the following activities :
(a) Job Evaluation : It is the process of determining the relative worth of a job.
(b) Wage and Salary Administration: It implies developing and operating a suitable wage and salary programme. Surveys are conducted to determine wage and salary structure for various jobs in the organization.
(c) Bonus : It involves payment of bonus under the payment of Bonus Act 1965, as well as non-statutory bonus and other incentives.