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Discuss the role of compensation in motivation and employee satisfaction.

Discuss the role of compensation in motivation and employee satisfaction.

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Discuss the role of compensation in motivation and employee satisfaction.

The objectives of a good compensation system should be to attract, retain, and not demotivate employees. Other objectives include reducing unexplainable variation in pay and encouraging internal cooperation rather than competition. Most companies still use traditional financial measures, such as revenue growth, profitability, and cost management, as a basis for compensation; more progressive organizations use quality measures such as customer satisfaction, defect prevention, and cycle time reduction to make compensation decisions

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