Managing Compensation As we noted at the beginning of this chapter, compensation and benefit expenses are among the largest cost that any organization will incur. Thus all managers must be sensitive to these costs and must be vigilant about their proper management. If an organization is playing excess wages and salaries, it is incurring unnecessary expenses. On the other hand, if the organization is not paying sufficient wages and salaries to its employees, then it will likely experience turnover and other dysfunctional consequences.