Economy

What is compensation? »Its definition and meaning

Anonim

The term Compensation is a generic term, used in matters of daily life in which it is necessary to use elements of any kind in order to balance something, be it an equation, a company name or some structure which must have the necessary components in order to establish adequate sustainability. However, the application of the term compensation falls mostly in the economic sphere, an area in which compensation is generally monetary or benefits in the form of a reward for a work performed. A compensation can from the economic point of view be seen from different angles, in which the debt with which it must be compensated can be automatic, produced or simply debts.

Wage compensation is established according to the laws that control the labor relationship between employers and workers, it is established according to an agreement called a contract, in which all the conditions under which the work must be carried out are expressed in the form of clauses, in addition of this, everything related to the form of payment for the work carried out is concentrated in a clause. This compensation can be biweekly, monthly or per work performed. As shown in everyday life, what is sought when applying the word compensation in any context is to balance the situation, it is for this reason that compensation is part of aWork system for salaried employees, to keep the production chain stable between those who carry out the work and those who receive the profits and invest in more production.

From the point of view of investors, the term compensation also influences, since when any expense is made, it represents a decrease in the control of available capital, when the gains are evident, they greatly compensate the money invested, when they exceed the amount invested, the decompensation is positive for those who invest, so they are considered profits or new capital to make the investment grow. The economy is a continuous and fluctuating movement, unbalanced in some factors and balanced in others, what is sought in the application of these terms is clarity on the matter in order to maintain profitable stability within organizations.