5: Compensation and Benefits

Compensation is a vital aspect of HR as it helps to reward employees for their contribution to the organisation. Along with benefits, organisations can plan and manage employees' expectations, control behaviour and even compete with other organisations in the same industry. Compensation can be either monetary or non-monetary, but often, a combination of both, as is the case in most regions of the world and large international organisations. For example, GCC countries and the not-for-profit international organisations such as the UN, WHO and ECOWAS rely on competitive wage and benefits packages to attract talent, whereas, during the 2020 Covid-19 pandemic, the aviation and tourism sectors adjusted their benefits and pay packages to reflect the low level of demand for their services. Over the years, employees have become conscious of pay differences and equity and will most likely make the decision to join an organisation based on pay justice. The aim of this chapter is to discuss some of the issues relating to pay schemes, their justification and implications for the organisation and individual employees.