What is Compensation Management?

HR Tech

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One of the main benefits of a good compensation management system is pay equity, but there are ample other benefits, like aiding in budget creation, attracting recruits, reducing turnover, and more. It’s important for business owners and HR leaders to know how compensation management works, the benefits, and what to consider before investing in an appropriate system. 

What is compensation management?

Compensation management is the process of ensuring that an organization’s salaries and bonuses remain competitive, appropriate, and equitable. It also involves managing company benefit programs to make sure they meet the needs of the current workforce. Compensation managers are responsible for working with employment data and keeping up with complex benefits administration rules and regulations.

Compensation management plays a large role in HR because it can impact employee retention, the hiring process, company performance, and team engagement. Compensation managers are an important asset to the company’s success. If salary, bonuses, and benefits aren’t managed properly, employees might find much better comp packages elsewhere, performance and job satisfaction could decline, and several other factors could negatively impact the business.

According to TechTarget, the process for creating compensation packages and benefits are changing. “Wellness incentive programs, in particular, are having a major impact

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