In contemporary dynamic and changing environment, the base of competitive advantage has been shifted from material and physical resources on intangible assets and knowledge. Knowledge has become the key driver of the company’s success and the processes of developing, managing and making leverage of knowledge as a valuable asset have become the basic foundation in achieving competitive advantage. Increased interest in the management of human resources as the backbone of knowledge and intellectual potential is a result of described conditions. Successful human resources management involves the application of a comprehensive compensation system, which will motivate employees and encourage them to maximal engagement in order to achieve the company´s objectives. Designing compensation policies and finding the right ratio between the material and the immaterial employees’ compensations is one of the most important tasks of the company. Intangible compensations have an increasing impact on employee motivation and, thus, there is an increased awareness of the need for their introduction in the companies. The example of selected company shows that companies in Croatia understand the role of the rewarding system as a significant factor used to increase motivation, to achieve organizational goals and increase the productivity of businesses; i.e. besides material, they also apply immaterial compensation as a tool to increase employees’ motivation more frequently