The encomienda system was employed by the Spanish to regulate Native American labor and in theory protect them from abuse.
The system functioned by granting a person a specific number of laborers. That individual was supposed to watch out for their native charges, protecting them from other tribes and teach them Catholic beliefs. In return for this “protection” the natives were supposed to provide tribute in the form of material wealth or labor. Natives who didn’t comply were punished or executed, and they had no say in who became their caretakers or overseers.
The benefits to the Encomendoros were substantial. For almost no toil, they reaped the benefits of native wealth and labor and had the backing of the Spanish crown if things got violent. This was also the first major law brought to the New World where prior to this system war, disease and turmoil were the rule of law. This system allowed the Spanish crown some form of control by forcing conquistadors and puppet native leaders to remain loyal or lose any income they had because the Spanish king kept title to the land.
If you are thinking this sounds a whole lot like slavery, you are correct. The difference between the two was minuscule. Thousands and thousands of natives died under encomiendo law. There were few, if any, benefits to the natives besides that they did not lose their homes and land since the system allowed natives to keep virtual title. They just had to provide service fees . . . or else.
The system eventual feel apart when religious missionaries saw how violent it was and objected. It was eliminated in the Caribbean first, and then in mainland South America.