samith Started The Discussion:
can someone please help me out with as to what is the difference between compensation and rewards?
Hi Samith...

Compensation means the entire package that is paid to an employee, which includes all monetary and non monetary emoluments i.e. salary, pf and other such benefits.

Rewards is one part of Compensation, its a process which helps in reinforcing the behaviour, in a lay man's language reward is a monetary or no monetary recognition given to an employee in lieu of better performance.

Hope this answers your queries, let us know if you have any other such doubts.


Hi, Compensation includes monthly salary and all benifits like,pf,esi,medical,gratuity and reward is the amount or benifit which one will get for his extra ordinary performance Regards Padam
agree with archana hr.

otherwise compensation is given for the work done for company under job profile.

Reward may be given for other supportive social, environmental, activities and may not be regular
thanks you very much for answering my question.I was confused because some people use the term "reward management" for compensation management. kind regards samith

Could anybody give me example of reward please??? I suppose reward could be promotion, enhanced job profile, special increment in salary, praise, recognition etc... tl me pls, if I am right. If yes then what are other forms of reward. If not, then what the reward actually is??? please satisfy my query.
Yes Ritu..

Reward is all these and more..

EVen a good working environment can be a reward...

A paid vacation can be a reward...

A promotion, increment all these are rewards

Anything that is given to an employee for good performance is reward...and it apart from the salary and other benefits he/she gets.


As said in above by Archana that compensation also includes non monetary benefit??? Is it so??? if yes, then what kind of benefits it could be???

I think it may be accomodation, hospital, transportation etc, but its not part of CTC. Please help me out to understand it better.
Hi everyone,

Just went through the above discussion on Comp Vs Reward...I have few points to make here:

What I feel is there is no such difference between Compensation and Rewards, i believe is these words are interchangeably used by organisation. The only difference I feel is more of "PSYCHOLOGICAL" why I am calling its Phys... is because using the word Reward gives a POSITIVE feeling to employee for the skill, time and knowledge they have given to the company and reward gives them a feeling of getting a return for some thing that they willfully gave to the company, where as when I use word COMPENSATION it denotes a "negative word" of paying employees for what they gave you for what they were not willing to but since you pay them they gave it to you.
This is just my perception about these two words...
Please feel free to comment!

Agree with Shweta, but I have a question that is there any practical difference between Compensation and benefits?


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