Chapter 1

1. Introduction

Compensation refers to the organizations entire reward package, including not only financial rewards and benefits but also non tangible benefits such as securities. It includes to all forms of pay or rewards going to workers and arising from their employment. Once workers have done their jobs and been appraised, they expect to be paid. Each and every worker in an organization works for money or incentives. So their first and foremost expectation from the organization is to earn money or appropriate compensation. Compensation is the most important part or tool of any organization. Because, human body works for earning something. And this earning policy is combinedly known as compensation package. Typically the human resource department performs this policy. It is the most critical function of human resource management. Because the human resource manager always concerns to have the good environment within the organization by providing appropriate compensation to the workers. The compensation package has two main components: direct financial payments which include wages, salaries, incentives, commissions and bonuses and indirect financial payment which include financial benefits like employer paid insurance and vacations. Every organization has to focus on compensation package because not a single organization exists that does not provide the benefits to the workers. There is not a single person who works without payment in an organization. From this point of view compensation package is the most important policy of an organization. From recruitment to motivation every kind of HR functions are done for the sake of compensation. Like other organizations compensation package is most important subject matter of garments industry especially in Ready-made Garments sector. We know that, the earn to mouth people are working in the RMG