Compensation as a Stratergy (1)

8/4/2019 Compensation as a Stratergy (1)

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COMPENSATION AS A STRATEGY

TO RETAIN EMPLOYEES



GROUP MEMBERS:

Roohi Jaiswal

Neha Sinha

Shalaka Mohite

Arti Lal

Babet Marbaniang

Pratyasha Patil

Jayashree Jay



Employee Retention

“Retention is all about keeping good people and

how you manage them.”

Employee retention is a process in which the

employees are encouraged to remain with the

organization for the maximum period of time or

until the completion of the project. Employeeretention is beneficial for the organization as well

as the employee.



What is Employee Retention?

Retention

Motivated

Engaged

Empowered

Excited

Loyal

Keeping the right employees

the most appropriate amount

of time AND moving them up

the retention curve



Key Areas in Retention

Relationship Support

Compensation

Growth



Compensation as a strategy

Compensation constitutes the largest part of the employee retention process.

The employees always have high expectations

regarding their compensation packages.

Compensation packages vary from industry toindustry.

An attractive compensation package plays acritical role in retaining the employees.



COMPONENTS AND SIGNIFICANCE OF

COMPENSATION STRATEGY

Pay- It includes base pay and additional

compensation in the form of incentives

Benefits- Benefits are measurable tools in

attracting and retaining the right employees.

Careers- Offered in terms of opportunity tolearn, higher salaries and better benefits, and

prospect of career advancement.



CONTI…

First Tenet- Compensation policies and practicesmay differ across organization and acrossemployee groups within organizations.

Second Tenet- Managers and employees shouldtake decision which help to choose among the

option and the processes used to implement them.

Third Tenet- Environmental and organizationalconditions should be considered



POLICIES THAT ARE STRATEGICALLY

RELEVANT

COMPETITIVENESS- Positioning a firm’s

compensation relative to its competitors

INTERNAL STRUCTURE- Refers to the

distribution of rates, or internal pay differentials.

FORMS OF PAY- A third policy refers to the

forms of the mix of various elements of total

compensation.



CONTI…

BASIS FOR INCREASES- Range from an

emphasis on short-versus long-term incentives, the

degree of pay differentiation in performance

differences, the size of payments.

ROLE IN HR STARTEGY- Emphasize their

employee relations policies e.g IBM’s employmentsecurity as a shared responsibility.



CONTI……

ADMINISTRATIVE STYLE- Includes the nature

of information to disclose to employees, the nature of

employee participation in pay design andadministration etc.



Forces Affecting Compensation

Differentiate between top performers and non-performers and even average performers. Andreward them accordingly.

Reward top performers only. This may motivatemediocre performers to contribute more.

Check the market whether your compensation systemis competitive.



Make plan to achieve continued employee motivationat least in the short-term.

Terminate non-performers, not good performers insectors that are no longer profitable due to thedownturn.

Clearly communicate to employees what theircompensation package is worth.



IMPORTANCE OF COMPENSATION

STRATEGY

Advantage to the Company:

Job Satisfaction

Motivation

Low Absenteeism

Low Turnover

Advantage to Your Employees:

Peace of Mind

Increases self-confidence



COMPANY EXAMPLE

NIIT Inc.

SPIRIT Fund (Self Propelled Initiative

for Renewal and Individual

Transformation) President’s Club

Managing Director’s Quality Club

(MDQC)

Excellerator Award



COMPANY EXAMPLE

INFOSYS

Extended Healthcare

Medical Insurance

Dental Care Group RRSP Plan

Vision and Plan

Life Insurance

Accidental Death AndDismemberment

Compensation as a Stratergy (1)

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