ABSTRACT
This chapter introduces the reader to compensation in organizations. The first section focuses on the role of compensation in human resource management. The chapter then proceeds to the requirements for an effective compensation system. We look at the influences on compensation (including external and organizational influences). The next section focuses on job evaluation. More specifically, job evaluation will be defined, and the objectives and advantages/disadvantages thereof will be discussed. Furthermore, job evaluation methods will be explained and the steps in implementing a job evaluation system will be described. Lastly, incentive pay systems will be discussed.
