Difference between compensation and reward in hrm

Employees earn a traditional salary but performance-based compensation seeks to reward them for their high performance above their job requirements.
Performance-based compensation is most often awarded as a year-end bonus, though bonuses throughout the year are possible.

Compensation would include rewards when you offer monetary payment such as incentives, various bonuses and performance bonus. Organisations reward their staff when they attain the goals or targets that they have jointly set with the employees. Rewards can be non-monetary such as a paid vacation for two.

Total rewards consist of everything compensation does – base pay, bonuses, equity, benefits, etc. – and then some. In fact, you could say that compensation is just one component of total rewards, an umbrella term for everything you get from working at an organization.

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