The final paper on the topic "Material and Non-material Compensation in organisation" will cover the area of compensation that employees of the organisation receive in the form of reimbursement for the work done. The purpose of compensation is to reward employees for their work in the organization, but also to encourage them to be more motivated and productive, which will contribute to better results and the achievement of the organisational goals. First part of this paper will be discussing basic concept of the organisation and the process of its formation. Organisational structures that provide framework in which the organisation exists in the market will be clarified in the remainder of the paper. Considering the topic of this paper, a function of human resources management will be explained. This function is, among other things, in charge of performance assessment and in charge of rewarding employees, accordingly, using material and non-material compensation. When it comes to compensation, it is important to define goals, strategy, and policies of compensation management so that compensation is successful in attracting, retaining, and motivating employees. Compensations can be divided in two categories, material and non-material and the key determinants by which these two forms of compensation are distinguished will be presented in the discussion. Subsequently, forms of material and non-material compensation such as salaries, bonuses and various benefits will be interpreted, as well as when and how those forms are applied within the organisation.