A part of the remuneration and benefits normally known as a compensation programme is a typical HRM function.
HRM should focus on using a compensation programme as a tool for effective utilisation and management of Human Resources to achieve organisational objectives. HRM develops policies on salaries and other benefits to employees for deriving commitment to the organisation, as they also reward superior performances with incentives and bonus payments. HRM tries to offer economic benefits including items like superannuation, life insurance, low cost loans, profit sharing, allowances and share purchase schemes, which also try to reward employees with recreational benefits like provision of leisure areas, sport facilities, social clubs and flexibility in working hours. It is the responsibility of HRM to devise these remuneration and other benefits in line with market place competitiveness to maintain motivation of employees.