COMPENSATION AND BENEFITTOPIC - CHALLENGES TO

HAVING A GOOD COMPENSATION AND

BENEFITS IN THE COMPANIES IN THE PRESENT INDIAN

CONTEXT

PRESENTED BY- MANISHA KUNWAR, DEEPA MAKHIJARAHUL CHAUDHARY, JUANITA KASBE

ANKITA , BARKATUNNISAHR BATCH, ITM SION

Summary

Brief about C&B Evolution of India’s benefits System Importance of Compensation Challenges for C&B in Indian

Scenario Current Trends in C&B Compensation Survey Report by

Deloitte

Brief – Compensation and Benefits Compensation - Direct or Indirect monetary

and non monetary rewards given to employees on the basis of the value of the job, their personal contribution, and their performance. While making these payments one should be alive to the governing legal regulations.

Million people go to work - Drive to acquire money, prestige, powers......The Motivation factor

Compensation/ Money - Primary Motivator Fastest changing field in HR to find new ways

of rewarding employees performances

Phase I (1950s-1970s). This was when policy was based on two principles, namely that employer–employee participation for long-term funding is

important and that it is the State’s responsibility to provide health care and other benefits for the people

(especially government employees and the rural population).

Phase II (1980s-2000). This was when the first National Health Policy was introduced to encourage private

initiatives in health-care service delivery, while at the same time widening access to publicly funded primary

health care. This mainly benefited the urban employee.

Phase III (post 2000). The liberalization of the insurance sector in order to provide new avenues for health financing and a redefinition of the role of the

State from being only a provider to being a financier of health services as well (to cover the entire urban

population).

Evolution of India’s Benefits System

Why does Compensation become Important?

A Sound Compensation Strategy

Define your compensation philosophy. Link compensation to your overall

business strategy. Change the culture and reinforce it with

compensation. Reward the behaviours that drive the

results. Think total compensation. Measure your return on invested

payroll.

Challenges.....for Good C&B Strategy

Limited Talent, especially in emerging economies or for “Hot Skills”

Managing workforce diversity  Aligning C&B to employee needs   Increased flexibility in C&B programs

e.g. Expatriateswith “Split pay requirements, flexible

benefits programs, etc How to distribute scarce

compensation & benefits

Continued....

Having a “Credible” performance management system that support “Performance Based Pay” concept

Balancing the issue of:

Linking Rewards to Performance vs. Building a Team Culture

Not getting on the bandwagon of what is the latest C&B scheme / idea / strategy / tool....

But about identifying what is right for the organization, its

strategy, competitive position & the contribution required from

the workforce.

What Should Company be Aware of for a good C&B?

Link with Objectives and culture Establishing pay for performance

standard Motivate employee

Current Trends in C& B

Compensation is now viewed as the total “cost to company,” (CTC) rather than an employee’s net pay alone as it helps to understand the costs and the operating margins.

Variable pay based on individual performance is the norm, and a larger percentage of the Indian salary is based on performance.

Organization performance also is factored in while structuring salary increases.

Basic, guaranteed pay has seen a gradual reduction.

Continued….

Benchmarking against organizations, both nationally and internationally, has become common.

Employee stock options (ESOPs) that were, a few years back, considered as valuable compensation components have ceased to be so given the erratic nature of the stock market and the lock-in periods.

Non-taxable benefits, which increased the net “take-home” of an employee, are now subject to the Fringe Benefits Tax (FBT), and so organizations are forced to take second looks at these components.

Retirement benefits are left to what is mandated by the government.

Pension benefits and other similar social security benefits are not on the radar screen of compensation experts in India today, but this component could be under significant discussion and speculation in the coming years.

SURVEY REPORT – DELOITTECOMPENSATION REPORT

.......Thank You!!!!!!!