This study aims to conduct a systematic literature review on the dynamics of the relationship between compensation and employee performance in the contemporary human resource management landscape. Using the PRISMA protocol, an analysis was conducted of 25 articles from SINTA-accredited national journals published between 2020 and 2026. The synthesis results show a shift in the research paradigm; compensation studies are no longer dominated by purely financial dimensions (base salary), but have transformed towards the concepts of Total Rewards and E-Compensation, particularly in the digital era and post-pandemic. Work motivation, job satisfaction, and work discipline were found to be the most dominant mediator and moderator variables in bridging the influence of compensation on performance. The theoretical implications of this study reinforce the urgency of Social Exchange Theory and Equity Theory in explaining the effectiveness of compensation. Practically, this article provides guidance for organizations to design adaptive, competitive, and technology-based compensation policies to stimulate optimal employee performance in the current era of industrial volatility.
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