Here is a simple tutorial to learn about compensation. It is the money, awarded to someone in exchange for their time or work. It is a systematic approach to providing monetary value to employees in exchange for work performed. Employee compensation refers to the benefits (cash, vacation, etc.) that an employee receives in exchange for the service they provide to their employer.
Both the cash and non-cash payments that you give to an employee in exchange for the work they do for your business is termed as compensation. Types of compensation include Base pay (hourly or salary wages), Sales commission, Overtime wages, Bonus pay, Other non-cash benefits.