Compensation System Design for SMEs and Its Relationship with Employee Motivation in the Digital Economy

With the rapid development of the international economy, small and medium-sized enterprises (SMEs) are becoming increasingly prominent in market importance. However, they continue to face challenges of talent drain and insufficient incentives. To enhance SMEs' market competitiveness, it is imperative to redesign remuneration structures that better align with modern systems. In the era of the digital economy, the design of a compensation system and employee motivation are inextricably linked, especially for small and medium-sized enterprises (SMEs). Amid rapid technological advancements and intensifying market competition, companies must leverage innovative compensation strategies to attract, retain, and incentivize talent, thereby strengthening their core competitiveness. This paper examines how SMEs in the digital age can harness advanced technologies, such as big data analytics and artificial intelligence, to evaluate employee performance with greater precision. The goal is to create customized compensation packages and establish a system that is equitable, transparent, and competitive, ultimately driving the sustainable growth of the enterprise.