How Compensation and Rewards are Determined

reward and compensation

When we talk about compensation and rewards the first thing that come to most peoples mind is the human resources total benefit system. However, life itself is based on the principles of compensation and rewards. The more you give, the more you receive. If you want to reap more in the future, you have to do more in the present. I am still saying that our current benefits are the results of our past decisions.

 Zig Ziglar once said You can have anything you want in life if you just help enough other people get what they want.”

He is saying that if we helped more people in the past, we can get anything in the present. The timeframe can be a minute or 10 years period, but we have to act first.

What we are experiencing today is a measure of what we have been doing in the past. Therefore to increase our future rewards, we must do more or do something different.

Compensation and rewards

Photo Credit :

This basic principle can be applied to every aspect of life. Let discuss this concept with four areas of success :

1. Employee Compensation and Rewards

Employee compensation and rewards are determined by number of factors. Below is the summary of few of these key factors:

  • Education – Your education and sometimes grades can influence the level of pay any employer would offer you. Your education with experience also influence the type of work (basic or challenging) supervisor would delegate to you.
  • Experience – The most important factor that support education is experience. Many senior jobs requires education supported by certain number of related experience. For example your rewards will be mostly be higher if you studied accounting and apply for accounting job compared to a public relation vacancy.
  • Past performance – The results of your past performance appraisal heavily influences the amount of your pay rise or promotion opportunities. Work hard, then you can be considered for better reward not the other way round.
  • Network – With the basic condition of education and experience, a good network can help you get into top brand firms. Internal network can also influence your promotion, job upgrade and pay rises. A situation where management have only one vacant position but two internal candidates of the same qualification, experience and similar work performance, network could be the major factor.
  • Other factors includes the level of competition for such skill, the firm’s ability to pay the expected salary etc.

2. Business

You will only have loyal customers when you offered them a good service or product in the past. Customers cannot just be loyal, they make decisions based on the past experience. If you have choice, will you like to sleep in a hotel where you once shared your bed with mosquitoes?

3. Personal Wealth

Why would abject poverty continues to exist in some families? Because the past generation did not made serious commitment to change the life of the next generation.

The more you save, the more you get richer. Even people who were born with silver spoon in their mouth need to manage their finance in other to maintain their future financial status. Your current financial status is a compensation and rewards of some past financial decisions.

4. Good Health

Healthy eating is not just about maintaining a healthy weight – it affects your total state of well-being.  Poor lifestyle habits have been linked to endless numbers of diseases, many of which can be prevented by eating right and exercising regularly .The compensation and rewards for those who practice healthy eating and exercises is the healthy body and mind. We are what we have been eating or doing.


Remember, if you keep on doing the same thing, you will keep on getting the same results. You should therefore continually be looking for ways to improve the quality and quantity of what you offer. This will increase your future compensation and rewards in life.


Be the first to comment on "How Compensation and Rewards are Determined"

Leave a Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.