Performance Management Systems and Strategies

DEFINITIONS

Operationally, we can hardly make any differences between the term compensation and wages. Both are intended to price the efforts of the employees. However, the word compensation is used more holistically, to acknowledge the strategic importance of wages. Theoretically, the word compensation means something, such as money, given or received as payment for damages. However, in HR literature, we consider the term from broader perspective, i.e., strategic use of wages paid to employees. Even some organization prefers to use the term rewards instead of wages or compensation. In HR, we do not consider reward just to acknowledge good performance, rather we consider it as strategic design of compensation, so that when employees get it at ...