Administrationcompensation is one of the areas of human resource management that is mostimportant because compensation policy that good, programme and their effectiveimplementation is important to get, maintain and develop human resource of theorganization get effective decision from them. It involves selection, design,development and programme flow designed to implementing compensation policy orincentive through pecuniary reward. Coast determined wage and salaryadministration as follows: “wage and salary administration refer toestablishment and strong policy implementation and employee compensationpractice.
It includes such areas as job evaluation, salary study and wage,analysis relevant organisational problems, development and wage structuremaintenance, set rule to control salary. Wage payment, incentive, profitsharing, wage alterations and adjustments, surcharges, compensation costcontrol and items other related”. Wage traditional concept and salary administrationemphasising on the only wage determination and wage structure in organisationsettings. In simple words, “administration compensation is a systematicprocedure to create structure compensation good.”Rewardsystem in contemporary world, reward to performance and success that are betteris more than real achievement itself. Indeed, when global financial crisisshow, reward is everything for bank because they fight for betting that morereckless and increase risk.
Because incentive system that is disabled, rewardperceived as final prize that greater than process real winner. Therefore,reward management should be viewed within the context what correct and onlyreward and what reward that is unbalanced. Point here is reward that shouldvindicate performance and does not exceed them. What we mean with this is goodto reward to doer that high for his excellent performance but do not reachwhere to catch up reward, the individual will be careful with wind and bearbehaviour that is unethical.