One of the most difficult functions of personnel management is that of determining rates of monitory compensation. It is not only duty for organisation but also equally important to both the organisation and the employee. It is significant to organisation, because wages and salaries constitute the greatest single cost of doing business and it important to the employer because the earning is the only means of economics survival; it is the mean that influence the standard of living, status in society, work as motivational factor, loyalty and productivity. Compensation is a tool used by management for a variety of purpose to further the existence of the company. It is a remuneration that an employee receives in return for his or her contribution in the organisation. So, the employee compensation programs are designed to attract capable employees to the organisation, to motivate them towards superior performance and to retain their services over an extended period of time.