Compensation and reward system is one of the basic processes of human resources management and is a great challenge for the people involved in creating it. A system that has been defined and implemented correctly represents much more than mere responsibilities defined by law, such as salary payments. If taken into account properly, this system can become an important tool in achieving goals and gaining competitive advantage.The main objective of this thesis is to define key settings of a compensation and reward system and also to examine a system already implemented in an existing company, as seen by both the employees and the expert in charge of creating the system itself.The thesis is divided into two parts, theoretical and empirical. The theroretical part defines compensation and reward systems and the influence a human resources department has on creating a reward system, but also the influence it has on the internal processes in a company. The empirical part is based on research conducted on the reward system in Cmg Digital, a digital company with over one hundred employees. The employees that were part of the survey were sent an anonymous online questionairre, and an interview was conducted with their HR specialist who has vast experience in the field. The research showed employees to be satisfied with the existing reward and compensation system and highly satisfied with the company itself. Furthermore, it showed a low employee turnover rate. It is significant to determine the importance of non-material compensations that show money is not the only incentive. Employee satisfaction regarding certain segments of material and non-material compensations may lead to developing similar compensations that have been established as having a positive effect on the employees. The questionnaire was used to determine areas in which the existing system could be improved.