How is "compensation and benefits" defined in HRM?

In human resource management, "compensation and benefits" refers to the total rewards provided to employees in exchange for their work. This encompasses not just the basic salary or wage paid but also includes various forms of financial and non-financial rewards. These can consist of bonuses, health insurance, retirement plans, paid time off, and other perks that enhance the overall remuneration package offered to employees.

Defining compensation and benefits this way recognizes that the total rewards system plays a crucial role in attracting, retaining, and motivating employees. It emphasizes a holistic view of remuneration, acknowledging that various components contribute to an employee's overall satisfaction and productivity. This comprehensive perspective is essential for HR professionals when designing competitive and effective compensation packages that align with organizational goals and employee needs.