2. Principles of Employee Compensation

Principles of employee compensation refer to the guidelines that organizations follow to determine how and what to pay their workers. Key principles include fairness, ensuring that employees feel their pay matches the work they do; competitiveness, making sure salaries are in line with industry standards to attract talent; and performance-based pay, rewarding employees for their individual contributions. Additionally, organizations should offer a total rewards package, which includes benefits and incentives, to motivate and retain employees while aligning compensation strategies with the company's goals. These principles help create a motivated and satisfied workforce.