Compensation Management based on mental accounting theory

Mental Accounting is the psychological process of individual, family and company making decision of economic result. People always divide wealth into different mental account unconsciously, while different mental accounting has different booking ways and psychological running rules. Compensation management based on mental accounting theory provides a more real and feasible theory framework for human resource management. This paper analyses the appliance criteria of mental accounting on compensation management, and proposes the key points of compensation management design based on mental accounting.