PHR Exam Prep™

Introduction

It could be argued that the functional area titled compensation and benefits has been, in one sense, misnamed. This is because these separate areas, when joined together, represent an exponentially larger and more dynamic discipline that is often referred to as “total compensation.”

Total compensation encompasses all of the “rewards” that an organization gives, grants, or otherwise bestows upon its employees in exchange for the services those employees have rendered through their employment. It includes more obvious items—such as wages and salaries—that would fall under the subheading “compensation,” as well as mandatory and optional benefits such as social security contributions, health and welfare programs, and the like. It also ...