HR Basics: Compensation

HR Basics is a series of short courses, designed to highlight what you need to know about a particular human resource management topic. In today’s HR Basics, we explore compensation, highlighting the three elements of a base compensation system - internal alignment, external competitiveness and compensation management. Compensation is pay provided by an employer to an employee in return for work. Total Rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate and retain employees. Compensation is comprised of two core elements - fixed Pay or base pay that does not vary and variable pay which changes with performance or results. A basic model for building a compensation plan includes three elements - internal alignment, external competitiveness and compensation management. Seven steps, or actions are organized in the three critical areas of compensation plan development. In this course we will take a look at each step. Compensation is a critical element of your total rewards strategy. A strong base pay structure is built through internal alignment, external competitiveness, and compensation management.