What do compensation strategies in SHRM aim to achieve?

Compensation strategies in Strategic Human Resource Management (SHRM) primarily focus on defining how employees are rewarded for their contributions. This approach ensures that an organization establishes a fair and competitive wage system that aligns with its goals and motivates employees to perform at their best. By effectively structuring compensation, organizations can drive employee engagement and productivity, attract talent, and reduce turnover. It addresses not only base salary but also benefits, bonuses, and incentives, creating a comprehensive reward system that recognizes individual and team performance.

The rationale for this focus on employee rewards is rooted in the understanding that when employees feel they are fairly compensated, they are more likely to be satisfied in their roles, committed to the organizational goals, and motivated to contribute positively to the workplace.