Western Governors University (WGU) HRM2100 C232 Introduction to Human Resource Management Practice Exam

Direct compensation refers specifically to the financial remuneration employees receive for their work, typically in the form of salaries or wages. It directly rewards the employee for their contributions and performance in their role. Wages and salaries are monetary payments made directly to workers, reflecting their efforts and expertise in their positions.

In contrast, medical insurance and paid leave are considered indirect forms of compensation. They provide additional benefits that support employees but do not directly contribute to their take-home pay. A company car can fall into the category of non-cash benefits, which also provides value to the employee but is not a direct financial payment. Thus, choosing wages or salary clearly identifies the form of compensation that directly compensates employees for their labor.