Management of compensation is one of the most important and strategic aspects of Human Resource Management. Both employers and employees are equally concerned and serious about it. Employers want to develop a compensation package that is quite attractive, sustaining and motivating to the employees. At the same time, they want to keep the compensation cost under control to maintain the operating cost. For employees, on the other hand, a high compensation or a regular growth in compensation is crucial, as it is directly or indirectly related with the fulfilment of all human needs and also offsets the increased cost of living. Consequently, employees expect that their competencies, experience and performance should be adequately compensated in the job market.