Compensation and Benefits in an Area of Human Resources Development

Subject: Employee Management
Pages: 1
Words: 294
Reading time:
2 min
Study level: Master

The current paper summarizes the video ‘Compensation and Benefits’ by HR Learning Hub PH. Compensation and benefits is an area of human resources development and generally refers to the policy of tangible rewards for employees in the company (HR Learning, 2020). Compensation is the primary source of material rewards in terms of wages and salaries provided to individuals in return for their work in the organization (HR Learning, 2020).

Compensation policies ensure a high quality of work, enhanced motivation, and opportunities for promotion (HR Learning, 2020). However, employers need to follow certain rules to guarantee the efficiency of the chosen compensation policies: namely, the compensations should be adequate, equitable, balanced, cost-effective, and adhere to legal regulations (HR Learning, 2020).

The two primary types of compensation philosophies are entitlement orientation and performance orientation (HR Learning, 2020). The former ensures the annual increase of wages regardless of the employee’s productivity; the latter establishes wages and incentives based on the performance of the employee (HR Learning, 2020). Ultimately, compensation is a direct tangible reward in terms of wages, salary, and incentives.

On the other hand, benefits generally refer to additional non-direct rewards that affect the quality of life of the individual. The benefits frequently cover medical care, hospitalization payments, insurances, accident relief, provision, uniforms, vacation pays, transport costs, etc. (HR Learning, 2020). Furthermore, some of the benefits include psychological rewards, such as comfortable working conditions, schedule flexibility, and recognition of achievements (HR Learning, 2020).

Benefits are always supplementary rewards and cannot be used to substitute direct compensation (HR Learning, 2020). Some of the benefits are regulated by legal regulations, such as social security and insurance (HR Learning, 2020). Ultimately, candidates need to thoroughly analyze the compensations and benefits provided by the company before applying for the job.


HR Learning Hub PH. (2020). Compensation and benefits. Web.