Compensation Business & Marketing Essay Research Paper (Essay Sample)

Compensation
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The Compensation Philosophy and Strategy
According to Gupta & Shaw (2014), compensation refers to a remuneration extended to an employee as a reward for their services, contributions, or efforts towards a business. Employees receive payment in the form of salaries and wages for their time, abilities, skills, knowledge, and commitment towards achieving the goals and objectives of the business. There are different types of compensation: the base pay or salaries and wages, commissions, bonuses, overtime pay, merit pay, tip income, achievement award or incentives, health benefits, travel and housing allowances, child assistance, and care benefits, and non-cash advantages. Compensation is a prominent aspect of running a successful business; effective compensation can make a business successful, while insufficient compensation can break and close down a business. Compensation is, therefore, important to any business because it; attracts quality talents, builds employee loyalty, boosts employee morale, improves productivity, increases profitability, and ensures employee retention. Moreover, good compensation provides better employee engagement, which enhances communication and job satisfaction in the workplace