ABSTRACT
Effective and appropriate rewards strategies contribute to an organization’s ability to attract and retain the personnel they need and to motivate employees to contribute to the organization’s success by performing at the required level. The total rewards package represents what the organization provides to employees in return for them rendering their services. Direct compensation is given that label because it is paid directly to an employee and is monetary. Indirect compensation is paid into trusts or to insurers/governments and is therefore an indirect form of compensation from the employees’ perspective. Direct compensation is the largest cost component of the total rewards package for most organizations. It is typically one of the largest controllable operating costs and is the most visible to employees. Employee benefits exist to protect employees against the major hazards to their standard of living. Base pay is the largest component of the total compensation package for most employees.
