In today’s dynamic and highly competitive business environment, managing people effectively has become a critical determinant of organisational success. Among the various facets of human resource management, compensation and reward management occupies a central position, as it directly influences employee motivation, performance, satisfaction, and retention. This book, Compensation and Reward Management, has been carefully designed to provide a comprehensive understanding of both traditional and contemporary practices in the field.
The book is structured into five well-organised parts to facilitate systematic learning and practical application.
Part One: Compensation lays the foundation by introducing the concept, types, and framework of compensation management. It further explores compensation policies, planning, job evaluation, pay structures, and the importance of maintaining internal and external equity. The section also discusses the development of total compensation strategies to achieve competitive advantage, along with key issues and comparative analysis of different compensation systems.
Part Two: Wage and Salary Administration delves into the core aspects of wage determination and salary management. It explains essential concepts such as minimum wage, fair wage, and living wage, along with various wage theories and statutory provisions. Practical tools like salary benchmarking, KRA and KPI design, wage surveys, pay grades, salary matrix preparation, and pay fixation are discussed to equip readers with applied knowledge relevant to organisational settings.
Part Three: Incentives, Reward System and Pay Restructuring focuses on performance-driven compensation mechanisms. It covers incentive plans, profit-sharing, gain-sharing, ESOPs, and both individual and group-based rewards. Special attention is given to non-monetary incentives and modern compensation approaches such as cafeteria-style benefits and startup compensation design, making this section particularly relevant in today’s evolving business landscape.
Part Four: Reward Management emphasises the strategic role of rewards inorganisations. It discusses the objectives, components, and alignment of reward systems with business strategies. The section also highlights executive compensation, reward practices in knowledge and service economies, and recent developments in recognition systems, reflecting the shift towards holistic and strategic reward frameworks.
Part Five: Current Trends in Compensation captures the emerging and future oriented dimensions of compensation management. It examines practices in multinational corporations, gig economy compensation, freelancer and contract worker payments, on-demand pay systems, and crowd-sourced pay models. Critical contemporary challenges such as pay inequality, gender pay gap, diversity, equity, and inclusion (DEI), global mobility, and managing remote and hybrid workforces are also discussed in depth.
This book aims to bridge the gap between theoretical concepts and practical application. It is intended for students, academicians, HR professionals, and practitioners who seek to develop a thorough understanding of compensation and reward systems in both domestic and global contexts. Efforts have been made to present the content in a clear, structured, and accessible manner to support learning, teaching, and professional practice.
Contents –
PART-1. COMPENSATION
A. Compensation
B. Types of Compensation
C. Compensation Management
D. Compensation Policy
E. Compensation Planning and Strategy
F. Compensation Strategy
G. Job Evaluation and Pay Structure
H. Internal and External Equity in Compensation
I. Developing a Total Compensation Strategy — Competitive Advantage
J. Advantages of Fair Compensation System
K. Significant Compensation Issues
L. Compensation Systems
Key Terms in the Chapter
Illustration Exercises
Case Study
Questions for Practice
PART-2. WAGE AND SALARY ADMINISTRATION
A. Wages
B. Salary
C. Key Differences between Wages and Salary
D. Types of Wages
E. Theories of Wages and Salary
F. Machineries for Wage Fixation
G. Statutory Provisions Governing Reward Systems
H. Wage Criteria and Wage Machinery
I. Wage Components
J. Salary Benchmarking
K. Designing KRA and KPI
L. Wage and Salary Survey
M. Pay Grades and Rate Ranges
N. Preparing Salary Matrix
O. Fixing Pay
Key Terms in the Chapter
Illustration Exercises
Case Study
Questions for Practice
PART-3. INCENTIVES, REWARD SYSTEM AND PAY RESTRUCTURING
A. Incentives
B. Determinants of Incentives
C. Wage Incentives
D. Incentive Calculation Process
E. Outputs of the Incentive Process
F. Types of Profit Sharing
G. Forms of Profit Sharing
H. Cafeteria-Style Compensation
I. Retention Bonus
J. Individual Incentive Plans
K. Group and Team Based Incentives
L. Profit Sharing Plans and Gain Sharing Plans
M. Employee Stock Option Plans (ESOPs)
N. Designing Salary Structure for Startup Organisations Incorporating
Rewards and Incentives
Key Terms in the Chapter
Illustration Exercises
Case Study
Questions for Practice
PART-4. REWARD MANAGEMENT
A. Concept of Reward Management
B. Objectives of Reward Management
C. Types of Rewards
D. Key Principles of Reward Management
E. Importance of Reward Management
F. Aims of Reward Management
G. Role of Reward in Organisation
H. Strategic Perspectives of Reward Systems
I. Aligning Reward Strategy with Business Objectives
J. Steps to Align Reward Strategy with Business Objectives
K. Recent Development in Rewards and Recognition in Business Organisations
L. Executive Reward Practices, Reward Strategies in a Knowledge Economy
M. Principles for Reward Strategies in a Knowledge Economy
N. Reward Strategies in a Service-based Economy
O. Key Principles of Reward Strategies in a Service Economy
Key Terms in the Chapter
Illustration Exercises
Case Study
Questions for Practice
PART-5. CURRENT TRENDS IN COMPENSATION
A. Compensation Practices of Multinational Corporations
B. Components of MNC Compensation
C. Key Considerations in MNC Compensation Practices
D. Strategic Compensation Systems
E. Compensation Trends in Gig Economy
F. Freelancers and Contract Workers Compensation
G. On Demand Pay Systems
H. Crowd-sourced Pay Models
I. Contemporary Challenges — Pay Inequality and Gender Pay Gap
J. Diversity
K. Equity and Inclusion in Compensation
L. Global Mobility Programs
M. Managing Remote and Hybrid Workforce Globally
Key Terms in the Chapter
Illustration Exercises
Case Study
Questions for Practice
