What is Compensation ?

‘Compensation’ is defined as the remuneration provided to an employee in lieu of his or her services. It is distinct from salary as the compensation would include other benefits too apart from the monetary benefits.
Various kinds of extra benefits provided to an employee like house rent allowance, travel allowance, gym membership, overtime pay, bonuses, stock options, etc. are all a part of the employee compensation. It helps keep the employee motivated and loyal to the company.
There are various types of employee compensation, with the major ones being direct and indirect. Direct compensation refers to the benefits provided to the employee directly. Indirect compensation includes the indirect benefits which the employees get from the company. It includes insurance cover, retirement benefits, incentives, equity-based programs, etc.

More HR Terms


What is a CV/Resume?   CV or resume is a summary highlighting an individual’s professional knowledge, qualifications, work experience, knowledge skills, additional activities, certifications, and

Executive Search

What is Executive Search ? ‘Executive Search’ refers to the process of searching for ideal individuals for senior-level positions. They are usually processed by recruitment

Notice Period

What is a Notice Period?   The notice period is a time duration, specified in an employment contract. It defines the period between the resignation

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