Human resources are the most precious assets of any organizations. They are the corner stone of
any working place. They carry out everyday operations including the customer dealing,
managing the cash flows, running the machines, decision making, counseling of their
subordinates, and including many other vital functions of the organization. People make
machines and people run machines. Henry Ford, an American Industrialist pointed out the
importance of Human resources by saying: “Take my business, burn up my building, but give me
my people and I will build the business right back again”. Undoubtedly, these are the employees
of the organization who can take an organization towards prosperity with their hard work and
determination and they can also lead an organization towards the downfall if their needs are not
being identified and satisfied. Literature has identified various human resource management
practices which are considered to be the best practices for retaining and motivating human
capital in an organization. One of the early and foremost practices is compensation management
which deals with compensating the employees of any organization according to the duties they
perform and responsibilities they cope up with.