1

A

RESEARCH PROJECT REPORT ON

Compensation SystemA Comparison of G.S Auto Ltd. & SIL

Submitted by

Jasvinder jit singh

ROLLNO.90632234420

in partial fulfilment for the award of the degree of

MASTER IN BUSINESS ADMINISTRATION

RIMT- INSTITUTE OF MANAGEMENT AND COMPUTER

TECHNOLOGY

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

( 2009-2011 )

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Acknowledgement

The Punjab University has introduced the research project for M.B.A students to get the practical

hand and to introduce us the environment of industry. Therefore, I Sukeshi (university roll no.

95072238791) has undergone my project at G.S. AUTO INTERNATIONAL LTD as a part of

my curriculum of Masters of Business Administration.

Firstly, I would like to pay my sincere thanks to my research guide lecturer Mrs.URVASHI Who

has been consent source of inspiration to me.

I am highly obliged and thankful to Sardar Jasbir Singh, Chairman of the company who with his

open hands welcomed me to do research. I also wish to express my deep gratitude to Mr.

M.S.Mangat (Personal Manager) for providing me valuable information to make this research

successful.

I the end, all go to my parents who were always my true sense of inspiration ad the cause of

what I am today. Moreover, thanks to all those who made this project successful.

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PREFACE

The highly competitive world of business demands much more than a theoretical knowledge,

due to this, a good practice oriented management course must include project work in

curriculum, and this would be an essential part of Masters of Business Administration degree

course. As it is a well-known fact that both, the theoretical knowledge and practical skills are

being more weight age comparatively, as it quite evident from the prevailing environment.

The lectures in the classroom are no doubt instrumental I understanding the fundamental

concepts of management and they also facilitate the learning process but their application I real

life situation remains doubtful. Therefore, in order to achieve the effective results the classroom

learning needs to be effectively wedded to the realities of the practical situations.

How far the concept if management are applicable in real life situations can only be judged by

having a first hand experience so to develop healthy managerial and administrative skills. The

potential managers to the theoretical knowledge with the real business environment and enable

the management students to have a feeling of the working condition and atmosphere under

which they will have to work. In the future, the research work becomes a essential and

indispensable part of Masters of Business Administration course.

So to know about all these I have made my research project on `Compensation`. A sincere

effort has been made to being about the lucid facts and I hope that this report meets the given

expectation ad various requirement of the research.

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CERTIFICATE

This is to certify that jasvinder jit singh, Roll No. 90632234420 has done the Major

Research Project entitled ‘Compensation System – Comparison of G.S. Auto Ltd. & SIL’

under my supervision for the fulfillment of the degree of Master of Business Administration.

The work done by her is a sole effort & has not been submitted as or its part for any other

degree.

MRS. URVASHI VASHIST

Lecturer

Department of Business Administration

RIMT-maec

Mandi Gobindgarh.

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INDEX

CHAPTER NO. TITLE PAGE NO.

1. Company Profile

i)G.S. Auto

ii)Shreyans Paper Mills

2. Compensation Introduction

3 . Review of Literature

4. Research Methodology

5. Data Analysis and Interpretation

=> Objectives of Study

6. Findings, Limitations and Recommendations

7. Conclusion of Study

(i) Bibliography

(ii) Annexure

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Chapter 1(Company Profile)

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Introduction

Gone are the days when it took months to travel room one place to another but today thanks to

modern science ad technology, which has decreased the distance, now any one can reach

anywhere in the world. Thanks to Auto companies.

In spite of mega advance I science and technology people are running short of time. Everyone is

racing against time all this has led to an increase in the demand for automobiles, ranging from

luxuries cars to large ad more advanced commercial vehicles.

Seeing this demand and potential to grow, the Indian automobile industry has been extensively

liberalized and due to this, the sales and production of automobiles have doubled, the number of

manufacturing and the choice of model in the automobile market has more than double the

standards of quality, customer expectations,

Awareness and even dealer services have considerably improved, and surprise of surprise now.

You ca get almost ay automobile off the shelf ay time. However, just manufacturing automobiles

is o longer a singular achievement. The most important aspect of present time is the demand of

such auto parts which are of high quality and which can pass through stringent conditions of its

applications.

ORIGIN of AUTOMOBILIES

The history of automobile actually began about 4000 years ago when the first wheel was used

for transportation India. Several Italians recorded designs for wind-driven cars. The first was

Guido da Vigevano in 1335. I early 15th century the Portuguese arrived in China and the

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interaction of two led to a variety of new technologies, including the creation of a wheel that

turned under its own power. By the 1600s small steam powered engine modals were developed

but it was another country before a full sized engine powered automobile was created.

The automobile was a four-wheeled vehicle powered by an internal combustion engine and used

primarily for the transportation of people. In the early 1800s, other inventors also experimented

with this idea and the steam-powered vehicle was put into production in Europe and the US. A

breakthrough in developing gas-powered automobiles came in 1860, when an internal

combustion engine was patented in France. However, a prototype of the twentieth century

automobile was not "born" until 1885 when Germans Gottlieb Daimler (1834–1900) and Carl

Benz (1844–1929) (working independently of each other) developed the forerunners of the gas

engines used today. In 1891–1892 a French company, Pan hard et Levassor designed a front-

engine, rear-wheel drive automobile. This concept remained relatively unchanged for nearly one

hundred years. In 1896, the Duryea Motor Wagon Company turned out the United States' first

production motor vehicle. The gas-powered cars were available for purchase that same year..

However, the first decades of the 1900s saw the U.S. auto industry take the lead, establishing

Detroit, Michigan, as Motor City, U.S.A.

In 1908, Ford Motor Company (established 1903) produced the first dependable, easily

maintained, and widely affordable automobile—the Model T. American consumers bought

17,000 Model Ts the year they were introduced at the price of $850. The popularity of the "Tin

Lizzie" (it was also nicknamed the "Flivver") was met by stepped-up production: In 1917 Ford

produced 700,000 Model Ts. The innovation of the moving assembly line (1914) steadily

improved production time. This resulted in lowering of manufacturing costs and the decrease of

the price of the car to the consumer (in 1924 the Model T sold for just $295).

HISTORY of AUTOMOBILE in INDIA

Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile

Industry of India has come a long way. During its early stages the auto industry was overlooked

by the then Government and the policies were also not favorable. The liberalization policy and

various tax relief’s by the Govt. of India in recent years has made remarkable impacts on Indian

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Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18

% per annum, has become a hot destination for global auto players like Volvo, General Motors

and Ford.

The automobile industry comprises of heavy vehicles (trucks, buses, tempos, tractors); passenger

cars; and two-wheelers. Tata-Telco, Ashok Leyland, Eicher Motors, Mahindra and Mahindra,

and Bajaj dominate heavy vehicles section. The major car manufacturers in India are Hindustan

Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd., General Motors India Pvt. Ltd.,

Honda Siel Cars India Ltd., Hyundai Motors India Ltd., and Skoda India Private Ltd., Toyota

Motors, Tata Motors etc. The dominant players in the two-wheeler sector are Hero Honda, Bajaj,

TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., and Yamaha etc.

In the initial years after independence, Indian automobile industry was plagued by unfavorable

government policies. All it had to offer in the passenger car segment was a 1940s Morris model

called the Ambassador and a 1960s Suzuki-derived model called the Maruti 800. The automobile

sector in India underwent a metamorphosis because of the liberalization policies initiated in the

1991. Measures such as relaxation of the foreign exchange and equity regulations, reduction of

tariffs on imports, and refining the banking policies played a vital role in turning around the

Indian automobile industry. Until the mid 1990s, the Indian auto sector consisted of just a

handful of local companies. However, after the sector opened to foreign direct investment in

1996, global majors moved in. Automobile industry in India also received an unintended boost

from stringent government auto emission regulations over the past few years. This ensured that

vehicles produced in India conformed to the standards of the developed world.

Indian automobile industry has matured in last few years and offers differentiated products for

different segments of the society. It is currently making inroads into the rural middle class

market after its inroads into the urban markets and rural rich. In the recent years Indian

automobile sector has witnessed a slew of investments. India is on every major global

automobile player's radar. Indian automobile industry is also fast becoming an outsourcing hub

for automobile companies worldwide, as indicated by the zooming automobile exports from the

country. Today, Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have set up their

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manufacturing bases in India. Due to rapid economic growth and higher disposable income, it is

believed that the success story of the Indian automobile industry is not going to end soon.

COMPANY PROFILE of G.S. AUTO

In 1956, Babba Gurumukh Singh in Ludhiana founded GS Auto. By his professional expertise

and commercial and service approach, the company soon became a leader in the automotive

components manufacturing field, making truck repair and heavy repair parts. In 1990, Sardar

Paramjit Singh (M.D.), an efficient and dynamic manager, founded B.G.S. Auto Pvt. Ltd. With

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his technical competence, the organization started manufacturing highly compatible universal

joints crosses, for trucks, cars, van jeeps etc. to fill the technical gap in the market for the clients'

benefit. The organization today is head by his son Sardar Manraj Singh, the proprietor of the

company with a positive approach towards the highly competitive International market

developing and reconfirming the faith of customer worldwide.

A loyal staff and future-oriented creative management make sure that the enterprise has been

able to preserve its excellent reputation internationally. With a rational structure, talented

expertise and technical knowledge acquired over the years, the company makes sure that the best

of quality output isdelivered.

They have registered a steep growth in their business and have earned the recognition of being

one of the most efficient and reliable manufacturing companies catering to the domestic markets

in Punjab, Haryana, Guwahati, Calcutta, Maharashtra, Jammu, Karnataka, Madhya Pradesh.,

Rajasthan, Gujarat etc. They also cater to the international markets of U.A.E., Iran, Libya, Syria,

Germany, America, Russia, Afghanistan, Holland, Malaysia, Kenya, Uganda, Egypt, Nigeria

and Australia.

Products:

They are Manufacturer, Traders and Exporter of automotive components such as auto steering

parts, jeep steering parts, universal joints etc.

1. Steering Parts: - Auto Steering Parts for cars, vans, jeeps etc. -Steering Assembly Parts for

light and heavy commercial vehicles: - Steering Parts for agriculture vehicles and equipment. -

Steering Parts for off road commercial vehicles.

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2. Universal Joints: - For light & heavy commercial vehicles -With four ground round

bearings:-With four plain round bearings. -With two welded plates & two plain round bearings. -

With four welded plates: - With two ground and two plain round bearings. For agricultural

machinery -With outside seal UJ Crosses -UJ Crosses with inside seal

3. UJ Crosses: - For off road / heavy earth moving machinery & vehicles – U j Crosses with

four wing bearings. –U j Crosses with two-wing bearing & two ground bearings:-With two wing

bearings and two plain round bearings. –U j Crosses with two welded plates and two high wing

bearings

IMPORTAT LANDMARKS

1938: Start business actively

1973: Govt. converted into Pvt. Ltd. Company

Gurumukh Sigh & Son’s Pvt. Ltd on 29 June.

1985: Renamed as G.S Auto international ltd. on 5 August.

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1990: Rayait Exports was established to cater to export market.

1997: ISO 9002 certification in March by BVQI, U.K.

1999: QS 9000 certification I Dec. by BVQI, U.K.

2003: Re-certified QS9000 I June by BVQI, U.K

2005: ISO/TS 16949 certification I April by BVQI, U.K.

2006: a) Commissioning of transfer line (14 station with twin robotic arms)

To manufacture spring pins (first its kind in Asia-pacific)

b) Formation of GS Automotives Ltd. to manufacture caste components.

c) International business tie up with V. Orland

of Italy to introduce their.

d) Establishment of G.S auto comp Ltd. To market

Various automotive companies of G.S. group and supporting companies.

e) Manufacturing facility at Tata Nagger, Jamshedpur.

2007: Trailer Excels.

G.S AUTO ITERNATIOAL COMPANY LTD.

LIST of BOARD of DIRECTORS As on 30 th MAY 2009

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Chairperson

Sardar Jasbir Singh

MANAGING DIRECTOR

Sardar Surider Singh

DIRECTORS

Ms. Dalbider Kaur

Ms. Amarjeet Kaur

Mr. Makhan singh

Mr. Sewa singh

PRODUCT RANGE

They specialize in Suspension Components (Machined, Forged and Cast)  for Commercial

vehicles (LCVs,  MCVs and HCVs ) and passenger Cars for various makes/ models of Vehicles:

For Indian Market:

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They have a range of following components for

Tata

Ashok Leyland

Maruti, Swaraj Mazda

Hindustan Motors Ltd.

VOLVO

Mahindra & Mahindra etc.

For Overseas markets:

They have components for Volvo, Mercedes, Scania, Hino,  Peykan  and other trailers and

trucks. They develop components based on Customer's Specifications and Drawings and provide

Designing solutions to our customers for enhanced product performance and improved quality.

 

GROUP COMPANIES

1. G.S. Automotive (P) Ltd.:

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At G.S. Automotive Limited, a team of 1000 young dedicated technicians work in close co-

operation with each other and have succeeded in bringing to our customers these Automotive

components, unchallenging in quality and workmanship.

2. G.S. Auto camp (P) Ltd.:

Group Company is manufacturing propeller shafts and suspension components. Also markets

auto parts manufactured y other smaller companies of G.S cluster in Indian market.

3. G.S Foods.:

One of the leading companies of northern India established in 1999 dealing in packaged food

products.

SOCIAL CONCERN

1. EDUCATION:-

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Children , the future of our nation, have the right to receive attention and proper

nurturing. The human approach of GS is manifested I the activities of education ad social

concerns

Its having following institutes:

Guru Nanak public school

Ramgarhia Girls College

Ramgarhia Middle School

Ramgarhia Senior Secondary School

2. MEMBERSHIP:-

GS group participate I the activities of important and international association via -

Society of Automotive Engineers, USA

Confederation of Indian Industry (CII)

Engineering Export Promotion Council

Auto parts Manufacture Association, Ludhiana

Institute of Professional Innovators, Detroit

DEPARTMENTAL ANALYSIS

1. Production Department

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Mr. V.K. Sharma handles the production department, president of plant. Approx 5000

employees are working under him. He has one general manager Mr. Sanghotra and two senior

i.e. Mr. Raman and Mr. Ranbir under him.

For this Mr. Sharma with help of his senior engineers has designed two machines and working

on designing more machinery in order to increase the capacity of plant.

Functions:-

To provide maximum goods as per the demand.

To provide quality products to its customers.

To update themselves from time to time in order to remain in competition.

2. Personal & Administration Department

Mr. M.S. Mangat, GM, one assistant manager handle Personal & Administration

department and five other employees assist him. They check daily attendance of resource by

employing the right man at the right place. The workers are treated as family members aspiring

to achieve goals of company.

Functions:-

To harmonize the relations between the management and workers.

To increase the productivity of workers.

Development of employees at all levels of the organization through continues

training and education

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A sense of belongings is created among workers, which drives them to excel in

their activities and enables G.S Autos to attain new heights.

3. FINANCE and ACCOUNTS DEPARTMENT

Mr. Niraj Tuli heads this department 10 other employees assist him in handling day to day

finance of G.S Autos. Earlier company has relied heavily on bank loans and borrowings.

In 1992, the company declared a sick unit but now it has turned into financially strong company

still there is lot that is to be done in this field.

Functions:-

Procurement of funds, which is done through banks, own generation and timely

realization from customers.

Proper utilization of funds.

4. Department Electronic Data Processing

This is one of the most important departments of the company. This department helps in

providing the information to all the departments’ e.g., if marketing department wants to check

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the sales trend then they can check the sales trend, they can check it either items wise, part wise

or city wise.

Functions:-

The main objective of EDP department is to provide service, which all departments

require in the area of computerization.

They are responsible for implementation of documented quality system in EDP

department and provide assistance in troubleshooting. They are responsible for

identifying continuous improvement and communicate to concern to HOD’s.

5. Purchase Department

The purchase department procures all the materials right from pin to vast machinery.

Five other employees assist Sr. Basant Singh heads the department.

Functions:-

To ensure purchased material quality.

Vendor department evaluation.

To provide material at right time.

6. Marketing Department

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Marketing includes all sets of activates necessary to direct and simplify the flow of goods and

services from manufacturing to consumers through distribution network.

To facilitate all activities Mr. Anadi Sharma heads marketing department. Who is assistance by

10 other employees of department, their main functions to market the company products,

providing services to the customers, creating demand for the developed products and discovering

and translating consumer’s needs and desires into products and services.

SWOT Analysis of G.S AUTO

Ø Strengths

All India Presence

Brand Pull

Better organized as compared to competitor’s

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Ø Weaknesses

Fragmented

Prices are high as compared to other Manufacture

Ø Opportunities

Growing Market

All VM’s increasing their Production

Difficult Business Environment for SME’s Player

Ø Threats

Load Restrictions

New Entrants at Local and Regional Levels

Improvement in Vehicles Quality

Increasing Prices of Steels

Freight Trains

Foreign Competition

COMPANY PROFILE OF SHREYANS INDUSTRIES LIMITEDShreyans Papers, the flagship company of Shreyans Group was incorporated in 1978. The

company commenced the commercial production of writing and printing papers in 1982 using

agricultural residues with an installed capacity of 10,000 MTs per annum.

SHREYANS PAPER:

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Before 1987, this company was under the management of Vardhman Group. In 1987 under a

family settlement, this company was taken over by Mr. D.K Oswal. Subsequent to this, numbers

of modernization-cum-expansion schemes were taken up at Ahmedgarh unit and present

capacity stands at 45,000 MTs per annum, which existed in 1987. This unit is considered as

market leader in agro based paper mills of the country and is one of the most modern plant and

machinery set up. This unit has been recipient of Productivity Awards instituted by National

Productivity Council for five years. On environmental front this unit was first in Asia to set up a

Chemical Recovery Plant suitable for agro based units which was part financed by USAID. This

unit meets all the standards as laid down by various environmental laws and is fully compliant.

CAUSTIC RECOVERY:

During 1995, the company implemented a scheme for recovery of caustic soda at an estimate

cost of Rs 113 Million. The scheme was to give two-fold benefit

Reduce the cost of caustic Lyle

Reduce the pollution level of water being discharged from the unit.

The scheme was completed in 1996. The caustic recovery of the company has been operating

satisfactorily. The company has been utilizing the caustic recovery facilities for production of

soda ash as the company do not possess the required equipment for the extraction of caustic soda

from black liquor (by product of the paper pulp making process) & also because, on account of

current market conditions, the extraction sale of soda ash is more beneficial than the extraction

& captive consumption of caustic soda. The company has been recovering approximately 85%

of soda ash & selling the same in the open market.

CO- GENERATION:

Both paper divisions have Co-generation plants attached to them and meet almost 90% of their

power requirement through these plants at very economical cost. The total combined capacity of

the Company is 78,000 MTs per annum.

COMPANY EXPANSION:

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In the meanwhile, encouraged by the experienced gained in paper industry, the company took

over a paper division of M/S Zenith Limited (A Ashok Birla Group Company) in February

1994. At the time of takeover, the capacity of the unit was 9,000 MTs per annum which has been

raised to 33,000 MTs per annum now. Major expansion-cum-modernization project was taken in

this unit has been raised the capacity to preset level.

TYPES OF PAPERS:

Shreyans produces different varieties of writing and printing papers for different uses including

waste mark papers, super calendar and other varieties of papers for various state Government,

Education Boards, Shreyans also produces the inland letter and envelop papers to be used for

postal and special papers for railways for their computerized tickets. Keeping in view the market

condition, Company has introduced new quality papers named High-Bright Super Printing

Papers in Ahmedgarh unit and Crystal paper in Banah unit

Shreyans is always ready to give top-level services to its customers ad is very friendly to

environmental to produces a paper without cutting ay tree or bamboo.

MANAGEMENT PROFILE of SIL

BOARD OF DIRECTORS

SH. RAJNEESH OSWAL, Chairman and Managing Director

SH. VISHAL OSWAL, Vice Chairman and Managing Director

SH. ANIL KUMAR, Executive Director and C.E.O.

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SH. KUNAL OSWAL

SH. A.K. CHAKRABORTY, Additional Director

Mr. S.K. SHARMA, Director (Technical)

DR. (MRS.) H.K. BAL

SH. R.C. SINGAL

SH. M.L. GUPTA

COMPANY SECRETARY

MR. VIPIN KUMAR BHATIA

BANKERS

STATE BANK OF PATIALA

BANK OF INDIA

STATE BANK OF MAURITIUS

WORKS

1. SHREYANS PAPERS, AHMEDGARH, DISTT. SANGRUR (PB.)

2. SHREE RISHABH PAPERS, VILLAGE BANAH, DISTT. NAWANSHAHAR (PB.)

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Chapter 2(Compensation Introduction)

COMPENSATION

Workers' compensation is a form of insurance that provides compensation medical care for

employees who injured in the course of employment, in exchange for mandatory relinquishment

of the employee's right to sue his or her employer for the tort of negligence. The tradeoff

between assured, limited coverage and lack of recourse outside the worker compensation system

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is known as "the compensation bargain." General damages for pain and suffering, and punitive

damage for employer negligence, are generally not available in worker compensation plans.

Employees' compensation laws are usually a feature of highly developed industrial societies,

implemented after long and hard-fought struggles by trade unions. Supporters of such programs

believe they improve working conditions and provide an economic safety net for employees.

Conversely, these programs often criticized for removing or restricting workers' common-law

rights (such as suit in tort for negligence) in order to reduce governments' or insurance

companies' financial liability. These laws first enacted in Europe and Oceania, with the US

following shortly thereafter.

With the technological developments taking place at a higher rate, the salary packages are too

increasing at a much higher rate. Pay packages in India have witnessed an increase of more than

14% in 2006 over last year’s salary packages. The compensation package comprises of monetary

and non-monetary benefits that includes salary, special allowances, house rent allowance, travel

allowance, mobile allowance, employee stock options, club memberships, accommodations,

retirement benefits and other benefits.

A wage is compensation, usually financial, received by workers in exchange for their labor.

Compensation in terms of wages given to workers and compensation in terms of salary is given

to employees. Compensation is a monetary benefit given to employees in return for the services

provided by them.

Salary is a form of periodic payment from an employer to an employee, which may be specified

in an employment contract. It is contrasted with piece wages, where each job, hour or other unit

is paid separately, rather than on a periodic basis.

From the point of a business, salary can also be viewed as the cost of acquiring HR for running

operations, and is then termed personnel expense or salary expense. In accounting, salaries are

recorded in payroll accounts.

28

Acc. to the national commission on labor :-

“Wages incentives are extra financial motivation. They are designed to stimulate human effort

by rewarding the person, over and above the time rated remuneration for improvements in the

present or targeted results”

Wages and salary administrative affect levels of employee commitment to the organization’s

large part of the compensation that people receive from work is monetary. Wage and salary

administration has increased as industrialized economies have become more complex.

In the evolution of economies, the role of financial rewards has grown.

Administration of employee compensation is called wage and salary administration.

Acc. To S.P. ROBBINS:-

“The term compensation administration or wages and salary administration denotes the process

of managing a company’s compensation programmed. The goals of compensation administration

are too design a cost-effective pay structure that will attract, motivate and retain competent

employees

Key Features

§ Determines optimum payout structures with powerful modeling tools

§ Customizes your payout schedules

§ Presents product and revenue analyses

§ Provides firm, branch, and investment professional rankings

§ Provides daily, month-to-date, and year-to-date commissions tracking

§ Captures historical data

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Benefits

1. Gives you a competitive advantage by helping reduce costs while improving investment

professional profitability and productivity

2. Enables you to easily evaluate performance and quickly adjust compensation

3. Facilitates an optimum payout structure.

30

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AMOUNT OF COMPENSATION:-

The amount of compensation depends upon:-

1. The nature of the injury caused by accident

2. The monthly wages of the worker

3. The relevant factors for working out lump sum equivalent of compensation amount as

specified

Under this compensation is payable for:-

1. Death

2. Permanent total disablement

3. Permant partial disablement

4. Temporary disablement

Compensation for death:-

50*monthly wages* relevant factor for age 20

100

Or Rs. 80,000 which ever is greater

Compensation for permanent total disablement

60*monthly wages*relevant factor for age 20

100

Or Rs. 90,000 which ever is greater

Compensation for permanent partial disablement

60* monthly wages*relevant factor for age20

40% of 100

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CHAPTER 3(Review of Literature)

33

Review of Literature

STEVE WERNER & STEPHAINE G. WORD (1996) JAMES H.

DULEBOHN & STEPHEN E. WERLING (2007)

Past compensation, research has reflected organization character & personnel practices that had

an internal rather than an external focus. Internal labor market typically characterized

organizational following up until the 1980s. Consequently, compensation research focused on

issues related to managing compensation in this type of structure that emphasized areas such as

internal equity job evaluation &individual reaction to pay. Recent changes in the environment

have resulted in a greater role of external factors, such as external competitiveness on

compensation practice. While practitioners today have more of an external focus in

compensation system design, present compensation research has not kept pace. In the following

paper we argue there is a need to redirect future compensation research to include a

consideration of external factors.

They review the literature of compensation & compensation related issues within the field of

management. After reviewing 6867 articles include 20 top journals over the past 7 years 396

articles were group in 12 categories. Upon synthesis of these articles, we analyze the linkage

across these categories & also suggest areas for future research. We conclude with some

observation on the current state of compensation research.

34

MARYLENE GAGNE &JACQUES FOREST (2003)

Although compensation specialist generally argue for incentives systems that link rewards to

performance, self determination theory argues that such contingent rewards can have

determinant effects on autonomous motivation. The authors present a model of the motivational

effects of compensation system that attempts to reconcile the awards. We replaced a nearly fixed

salary academic physician compensation model with decision-based productivity. The base

salary system was stratified according to rank & clinical experience. The supplementary pay was

linked to electronic patient’s records & a scheduling database to awards point.

JANIKAN SUPANVANIJ & MARIA GOLATI (2008)

This research based on the performance management & executive compensation. This examines

the relation between corporate performance & executive compensation 1994-2005. Its also

examines whether the relationship various across industries. Economic value, market value

added methods as performance measures results show that the fixed managerial compensation

are linked to the firm performance differently there is no evidence related to long term

compensation. The form of compensation is also co-related with the firm compensation.

.

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CHAPTER-4(Research Methodology)

36

RESEARCH METHODOLOGY

MEANING OF RESEARCH METHODOLOGY:

Research is a common parlance refers to a search for knowledge. One can define research as a

Scientific Research and a systematic search for pertinent information on a specific topic. In fact

research is an art of scientific investigation.

According to Clifford Woody, “Research comprises defining an and redefining problems,

formulating hypothesis or suggested solutions, collecting, organizing and evaluating data making

and researching conclusions and at least carefully testing the conclusions to determine whether

they fit the formulating hypothesis.

Objectives of Research

To gain familiarity with new insights.

To portray accurately the characteristics of particular individuals, situation to a group.

To determine the frequency with which something occurs or with it is associated with

something else.

To test a hypothesis of a casual relationship between variables.

Research Design:

37

Research design constitutes the blueprints for the collection, measurement and analysis of data.

The design includes an outlay of the researches will do from writing the hypothesis and its

operational implications to the final analysis of data.

Need For research design:

Research Design is need because it facilitates the smooth sailing of the various research

operations, thereby making research as efficient as possible as yielding maximum

information with minimum expenditure of effort, time & money.

Data Collection:

The task of data collections begins after a research problem has been defined and

research design is made. While declining about the method odd data collection, a

researcher should keep in mind two types of data i.e. primary and secondary

Primary Data:

Questionnaire Design: Items are generated based on studying the various aspects in

books and magazines and based on personal judgments.

A structured questionnaire covering important aspects of compensation, management

policies, personal and organizational factors that are responsible for compensation in the

organization.

Convenient Sample Size: - 80 people

Scope of the Study: - G.S Auto Ltd., Ludhiana. and Shreyans Industries Ltd.,

Ahmedgarh.

Secondary Data: It was collected from books, journals and company’s websites.

38

CHAPTER-5(Data Analysis and Interpretation)

39

Research Work at G.S. Auto Ltd.

1 Compensation

What type of compensation provided to you by the company?

Response Percentage

Wage salary 60%

Incentive plan 0%

Fringe benefits 40%

TABLE-5.1

FIG-5.1

This table and figure shows that out of 80 employees get 60% benefit from wage & salary compensation

and 40% fringe benefits. However, the company ever provides them the facility of incentive plans.

40

2 Fringe Benefit

What type of fringe benefits are provide to you by the company?

Fringe benefits Percentage

Old age pension and retirement benefits 0%

Travel expenses 60%

Bonus for quality and attendance 0%

Insurance 0%

Medical leave with pay 25%

Suggestion reward 15%

Universities and trade courses 0%

Health benefits 0%

This figure shows that the company provided Travel expenses 60%, Medical leave with pay25%,

Suggestion Reward 15%. The company also rovides the benefit of bonus but it provide annually not for

quality / Attendance. Medical & health benefits are also provided to those who come under the ESI Act.

41

3 Time period

In how much time you receive your compensation?

Time period Percentage

Week 0%

Month 0%

Yearly 0%

On due date 100%

TABLE-5.3

FIG.5.3

This table and figure shows that out of 80 people employees get their compensation o the due date

decided by the government.

42

4 Payments

Which method is used for your payments?

Types Percentage

Time wage method 50%

Piece wage method 50%

Balance method 0%

TABLE-6.4

FIG-5.4

This table and figure shows that out of 80 employees according to their departments receive their

payments. Some departments use TIME WAGE METHOD or some pay according to PIECE WAGE

METHOD.

43

5.5 Compensation

Is compensation fixed or not?

Responses Percentage

Yes 100%

No 0%

TABLE-5.5

FIG.5.5

This table and figure shows that out of 80 employees compensation is fixed for all employees. It is

according to their salary.

44

5.6 Incentives

According to you, incentive plans helps to improve in what manner?

Responses Percentage

Work flow 0%

Man machine relation 0%

Employee-employer relation 0%

Team work 0%

Minimization absenteeism 0%

All above 0%

TABLE-5.6

FIG.5.6

There are no incentive systems. So they do not know about what incentives help to improve in.

Incentives

0%10%20%30%40%50%60%70%80%90%

100%

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45

5.7 Incentives

Do you want incentive plans?

Responses Percentage

Yes 90%

No 10%

TABLE-6.7

Incentives

YesNo

FIG.5.7

This table and figure shows that 90% of employees want incentives.

46

5.8 Satisfaction

Are u Satisfied with your compensation?

Response Percentage

Yes 100%

No 0%

TABLE-5.8

Satisfaction

Yes

No

FIG.5.8

This table and figure shows that out of 80 employees 100% employees are satisfied with their

compensation.

47

5.9 Wage Differential

According to you Wage Differential should be?

Response Percentage

Occupational Differential 55%

Inter-area Differential 25%

Inter- Firm Differential 12%

Inter-Personal Wage Differential 8%

TABLE-6.9

Wage Differential

55%

25%

12%

8%

Occupational Differential

Inter-area Differential

Inter- Firm Differential

Inter-Personal WageDifferential

FIG.5.9

This table and figure shows out of 80 employees through my study 55% employees says occupational

differential, 25% employees Says Inter-Area differential. 12% employees say Inter-Firm differential & 8%

employees says Inter- Personal differential. However, in OCM mill both Occupational and Inter-Area

differential are used.

48

5.10 Compensation Impact

Do you think the compensation have any impact on the goodwill of the company?

Response Percentage

Yes 100%

No 0%

TABLE-5.10

FIG.5.10

out of 80 employees, 100% of employees says that the compensation always affect on the goodwill of

the company.

49

5.11 Pay to nomination

In case of death, should it be paid to your nominee?

Responses Percentage

Yes 100%

No 0%

TABLE-5.11

Pay to nominee

0%

20%

40%

60%

80%

100%

120%

Yes No

%ag

e of

resp

onse

s

Series1

FIG.5.11

This table and figure shows that out of 80 employees ,the company provides the compensation to the

nominee of the employee after his death.

50

Research work at Shreyans Industry Ltd.

Table 1

Compensation

What type of compensation provided to you by the company

Response Percentage

Wage and salary 50%

Incentive plans 0%

Fringe benefits 50%

51

This table and figure shows that the company provided 100% facility of wages and salary compensation

and fringe benefits to the workers.

Table 2

Fringe Benefits

What type of fringe benefits provide to you by the company?

Fringe benefits Percentage

Old age pension and retirement benefits 0%

Travel expenses 20%

Bonus for quality and attendance 0%

Insurance 0%

Medical leave with pay 40%

Suggestion reward 0%

Universities and trade courses 0%

Health benefits 40%

52

This table and figure shows that company provides just two fringe benefits medical leave with pay and

health benefits. These facilities cover all workers those comes under the ESI act.

Table 3

Time period

After how much time you get your compensation?

Time period Percentage

Weekly 0%

Monthly 0%

Yearly 0%

On due date 100%

This table and figure shows that all the employees receive their compensation on their due date. The

central or state government mentions the date.

53

Table 4

Payments

Which method is used for your payments?

Types Percentage

Time wage method 40%

Piece wage method 60%

Balance method 0%

This table and figure shows that employees according to their departments receive their

payments. Some departments use TIME WAGE METHOD or some pay according to PIECE

WAGE METHOD.

54

Table 5

Compensation

Is compensation fixed or not?

Responses Percentage

Yes 100%

No O%

Compensation fixation

YesNo

This table and figure shows that compensation is fixed for all employees. But its fixed with attendance.

55

Table 6

Incentives

According to you incentive plans helps to improve in what manner?

Responses Percentage

Work flow 0%

Man machine relation 0%

Employee-employer relation 0%

Team work 0%

Minimization absenteeism 0%

All above 0%

Incentives

0%10%20%30%40%50%60%70%80%90%

100%

Wor

k flo

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ploy

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Min

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Series1

56

This table and figure shows that there are no incentive plans in SIL.

Table 7

Incentives

Do you want incentive plans?

Responses Percentage

Yes 30%

No 70%

Incentives

YesNo

This table and figure shows that 30% workers want incentives but 70% don not want.

57

Table 8

Satisfaction

Are u Satisfied with your compensation?

Response Percentage

Yes 80%

No 20%

58

This table and figure shows that all workers are satisfied with their compensation.

TABLE 9

Wage Differential

According to you Wage Differential should be?

Response Percentage

Occupational Differential 52%

Inter-area Differential 6%

Inter- Firm Differential 32%

Inter-Personal Wage Differential 10%

Wge differential

52%

6%

32%

10%

OccupationalDifferential

Inter-areaDifferential

Inter- FirmDifferential

Inter-PersonalWageDifferential

This table and figure shows that 52% workers think that the occupational differential is the major Wage

Differential.

59

Table 10

Compensation Impact

Do you think the compensation have any impact on the goodwill of the company?

Response Percentage

Yes 15%

No 85%

15%

85%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

Yes No

Series1

This table and figure shows that only 15% workers agree with it that the compensation affect the

Goodwill of the company.

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Table 11

Pay to nomination

In case of death, should it pay to your nominee?

Responses Percentage

Yes 100%

No 0%

This table and figure shows that the company provides the compensation to the nominee of the employee

after his death.

61

OBJECTIVES OF THE RESEARCH

To study the compensation system in G.S Auto and Shreyans Industries Ltd.

To study the satisfaction level of employees with regard to compensation system in G.S Auto and

Shreyans Industries Ltd.

To study the importance of incentives plans for workers.

To study the impact of timely and adequate compensation on goodwill of G.S Auto and Shreyans

Industries Ltd.

To study the time gap with regard to receipt of compensation by employees.

62

CHAPTER-6FINDINGS, LIMITATIONS

AND

RECOMMENDATIONS

63

Findings

1. Fringe Benefits and Wage Salary are provided to workers in G.S. Auto and SIL.

2. There are no Incentive plans in G.S. Auto and SIL.

3. Fringe Benefits like Old Age Pension, Retirement benefits and Bonus for Quality &

Attendance and University & Trade Courses are not provided in both the companies.

4. There are no Insurance plans in both companies.

5. Compensation is providing to workers on the due date in both the Companies.

6. All most all the workers in G.S. Auto want Incentives.

7. All are satisfied with their compensation, which puts a positive impact on the Goodwill

of the company.

8. All the worker want that there compensation should pay to their nominee after death.

64

Limitations

1. Proper information was not provided regarding the Base Compensation.

2. Respondents Age was concealed.

3. There was biasness among the respondents while filling the questionnaire.

4. The Supervisors chose the respondents.

5. Respondents were not so interested to fill the questionnaire.

65

RECOMMENDATIONS

1. There should be Incentive plans in G.S. Auto and SIL to increase employee Moral.

2. There should be Insurance plans in G.S. Auto ad SIL for the protection of employees.

3. There should be University & Trade Courses for the workers in G.S. Auto.

4. There should be some benefits at the time of Retirement.

5. There should be Bonus for Quality & Absenteeism.

66

CHAPTER-7(Conclusion of Study)

67

CONLUSION OF THE STUDY

From my research about Compensation System in both the companies, I conclude that workers

in both the companies are satisfied with their compensation. However, there is no Insurance and

Incentives given to the workers. Company should provide to workers Insurance Plan and

Incentive Plans to increase the moral of the workers. Compensation is provided to workers on a

due date which is a good factor for the Goodwill of the companies. There should bonus for

quality and University & Trade Courses for the worker`s improvement.

68

BIBLIOGRAPHY

1 VSP Rao, ‘ Human Resource Management’2 www.compensation related links3 www.hrmguide.com-HRM related articles, features, links4 http://www.ocm.in 5 http://www.google.co.in

QUESTIONAIRRE

Name: Age:

69

Sex: Marital status:

Occupation:

1. What type of compensation provided to you by the company?

a) Wage and salary compensation

b) Incentive compensation

c) Fringe benefits

2. What type of Fringe Benefits provided to you by the company?

a) Old age pension and Retirement Benefit.

b) Travel expenses

c) Bonus for quality & Attendance

d) Insurance plan

e) Medical pay with leave

f) Universities & Trade Course

g) Health Benefits

3. After how much time you get your compensation?

a) Weekly

b) Monthly

c) Yearly

d) On due date

4. Which method is used for payments?

a) Time based system

70

b) Piece based system

c) Balance Method

5. Is compensation payment fixed or not?

a) Yes

b) No

6. According to you incentive plans helps to improve in?

a) Work flow

b) Man-machine relation

c) Employee- employer relation

d) Team work

e) Minimize absenteeism

f) All of the above

7. Do you want Incentive plans?

a) Yes

b) No

8. Are you satisfied with your compensation?

a) Yes

b) No

9. According to you wage differentials may be?

a) Occupational differentials

71

b) Inter-term differentials

c) Inter-area differentials

d) Inter- personal wage differential

10. Do you think the compensation impact on the goodwill of the company?

a) Yes

b) No

11. In case of death should it to be paid to your nominee or not?

a) Yes

b) No