What is the role of compensation in an organisation?

Compensation plays a crucial role in an organization by serving as a primary motivator for employee performance and engagement. It helps attract and retain talent, ensuring that the organization can build a skilled workforce. Additionally, a well-structured compensation system fosters a sense of fairness and equity among employees, contributing to overall job satisfaction and organizational commitment. Ultimately, effective compensation strategies align employee goals with the organization's objectives, driving productivity and success.