Compensation Management is the process of designing and implementing a system to reward employees for their work. It involves determining salary levels, bonuses, and benefits to ensure that employees are fairly compensated for their contributions. This system aims to attract, motivate, and retain talent within an organization. Effective Compensation Management also considers market trends and internal equity. Organizations analyze industry standards to remain competitive while ensuring that pay structures are equitable among employees with similar roles and responsibilities. This helps create a positive work environment and enhances overall employee satisfaction.