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HRMT 600- Week 6 Discussion: Compensation Strategy

Aug 22, 2023

The total reward is an organizational system of rewards that is inclusive of compensation, benefits, and any tangible or intangible items employees’ value and an employer provides to retain employees and reinforce preferred behaviors. “these forms of compensation are broken down into two categories: direct monetary) and indirect (non-monetary).

Non-HR Perspective: What is the manager’s role in establishing a compensation strategy? How do managers influence the compensation process?

1R Perspective: Evaluate a current or past employer’s total reward strategy. What do you recommend/propose for your chosen organization? Would you involve managers in the process? Why or why not?

Week 6 Discussion: Compensation Strategy

The managers who are responsible for creating the compensation strategy are called compensation managers. They are majorly responsible for researching, maintaining, and establishing the finance system of the organization. The compensation managers start the process by researching and understanding the market competition for the employees’ payments and benefits. They are required to discover various methods for ensuring that the pay rates are fair in order to make the employees retain and recruit (Heathfield, 2020). The compensation strategy formed by the compensation manager guides the organization toward managing the total employee compensation. It is so because earlier, compensation is limited to the paycheck of the employees, however, currently, it is much more than that (Hwest, 2022). Nowadays employees look for various other monetary rewards from their employers which help them in bearing other financial costs such as retirement and healthcare plans.

It is very important to pay attention to the employee’s compensation strategy because it is one of the crucial function of HRM for the recruitment process, it helps in retaining the employees within the organization and also offers fair payment, and avoid compensation bias and discrimination. The compensation managers influence the process of compensation as it might affect the relationship between the employees and organizational management. Managers need not overlook the compensation strategy as it might create disputes between the employees and employers as the employees provide their time, skill, knowledge, and talent to the organization and expect something extra in return other than salary. It is also seen as a reward that will be awarded to the employees for their effortless and devoted work.


Heathfield, S.M (2020). What Does a Compensation Manager Do? Retrieved on 27th July 2022, from:,for%20employee%20pay%20and%20benefits

Hwest (2022). How to Develop a Strategic Compensation Strategy? Retrieved on 27th July 2022, from:

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