A Compensation Model is a framework used by organizations to determine how employees are paid for their work. It includes various components such as base salary, bonuses, benefits, and incentives. The model aims to attract, motivate, and retain talent while ensuring fairness and competitiveness in the job market. Different types of compensation models exist, including salary-based, hourly, and commission-based structures. Each model has its advantages and disadvantages, depending on the nature of the job and the goals of the organization. By implementing an effective compensation model, companies can align employee performance with their overall business objectives.