A Study of the Service Sector’s Best Practices and HR Challenges in Compensation Management

Abstract

Management of compensation is an important function that must be present in any organization. In the present environment, in order for businesses to maintain a competitive edge, they need to come up with creative and effective methods of employee compensation. It is very important to both recruit and retain the best possible talent. Different employees may have varying preferences for pay and benefits depending on factors such as gender, level of education, age and amount of experience. As a result, it is of the utmost significance for HR to effectively manage the compensation of the employees. However, human resources must contend with a wide variety of challenges and problems in order to effectively form and determine compensation. This means that the present study is an effort to investigate compensation best practices combined with the HR challenges in the field of compensation management. Both primary and secondary types of information, in the form of data, are combed through to compile the study’s final tally of findings. The findings of the study highlight a number of challenges that Human Resources must contend with regarding compensation management.