• Compensation includes all forms of pay, such as salary, benefits, bonuses, and other forms of pay.
• Compensation is distributed based on an organization’s pay structure and job grouping.

Compensation includes more than the financial returns that employees receive for the services they provide. Compensation also includes returns such as the required and voluntary benefits, perks, bonuses, incentive pay, and paid leave. Benefits are covered in depth elsewhere, so the focus here will be on the financial returns — pay structure, systems, and policies.