Compensation
Compensation means the benefits that the employees of an organization receive as a return of their services within an employment relationship; it can be carried out through financial returns or counter-offering tangible services. Employers of various organizations in Canada spend approximately one trillion dollars on wages annually. Additionally, the nation spends one hundred billion on the workers’ benefits. Due to the extensive amount of compensation, there is a fundamental importance in ensuring organization compensation frameworks are line with the organizational strategic decision-making process. Besides, all organizations are always part of a broader environment, which is consistently impacted by various forces; such as the community, the government’s regulation and consumers. Therefore, for proficient functioning, the compensation system has to exist as an asset and not a liability. Ever since its creation, the compensation system is vital because it creates the willingness and motivation amongst qualified employees to carry out activities in line with the organizational requirements. And since it controls desirable behaviours, it is one of the essential tools of the management. Of course, it does not work alone, but it is combined with other strategies to ensure efficient outcomes. Due to the rapidly changing environment, there is not a compensation system that is considered the best. As a result, the systems have to transform and adapt in relation to environmental aspects. Compensation is essential for both the organization and the employees. First of all, it promotes the organizational goals and objectives are attained since it motivates workers to give out their best efforts. Also, these systems attract highly competent employees and retain highly-qualified workers. All in all, the compensation system is vital because it benefits the employees of an organization receive as a return for their services.