COMPENSATION

PRESENTED BY:RAFATH BEGUMPM/2014/409

NIPER -HYD

CONTENTS INTRODUCTION

OBJECTIVE

COMPENSATION MANAGEMENT

ELEMENTS IN COMPENSATION

FACTORS AFFECTING COMPENSATION

COMPONENTS OF COMPENSATION

IMPORTANCE

CONCLUSION04/18/2023 2HRM

INTRODUCTION

Compensation may be defined “as money

received in performance of work and many kinds

of benefits that an organization provides to

employees”.

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OBJECTIVES

To recruit and retain qualified employees.

To increase or maintain morale.

To determine basic wage and salary.

To reward for job performance

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COMPENSATION MANAGEMENT

Compensation systems are designed keeping in mind the strategic goals and business objectives.

Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities.

JOB ANALYSIS

PAY STRUCTUR

ES

SALARY SURVEYS

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ELEMENTS IN COMPENSATION

JOB EVALUATION

WAGE & SALARY

BONUS & INCENTIVES

PAYROLLS

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JOB EVALUATION It is the process of determining the worth of one job in

relation to that of other in a company so that a fair and equitable wage and salary system can be established.

METHODS

RANKING

POINT METHOD

CLASSIFICATION

FACTOR COMPARISION

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CONCEPT OF WAGE Minimum wage Fair wage Living wage

Wage plan Time wage plan Piece wage plan Skill based pay Competency based pay

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INCENTIVES

Is any factor(financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives.

Short term plans:

Halsey premium plan:

Total wage=(time taken x standard rate)+bonus

Where bonus=(time saved x std rate)50%

Rowan plan:

Total wage=(time taken x std rate)+bonus

Where bonus=(time taken x time saved x std rate)/std time.

Barth system:

Total wages=√std time x time taken x hourly rate04/18/2023 9HRM

Long term incentives

Service incentives: Rewards employees with years of service with the

company.

Profit sharing plans: Certain percentage of profits is distributed.

Stock options: Employee’s are given the option of purchasing the

company’s stock

Performance bonus plans: Rewards employees based on each employee’s

annual performance review.04/18/2023 10HRM

PAYROLLS Refers to the administration of employees, salaries,

wages, bonus, net pay, deductions etc.

It consists of the employee ID,employee name, date of joining, daily attendance record, basic salary, allowances, overtime, bonus, commissions, incentives, pay for holidays, vacations and sickness, value of meals and lodging etc.

There are some deductions such as PF, taxes, loan instalments or advances taken by employees.

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FACTORS AFFECTING COMPENSATION

Demand and supply of labour

Cost of living Society Labour unions

Compensation policy The org. ability to pay Job analysis and

description Employee

EXTERNAL INTERNAL

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COMPENSATION COMPONENT

COMPENSATION

MONETARY NON MONETARY

INDIRECTDIRECT

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DIRECT COMPENSATION

Base pay

Bonus

Incentives

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BASE PAY : Fixed amount of money paid to an employee by an employer in return for work performed.

BONUS: A sum of money added to a person's wages as a reward for good performance.

INCENTIVES: Inducement or supplemental reward that serves as a motivational device for a desired action or behaviour

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INDIRECT COMPENSATION

Insurance(health , eye..)

Leaves (sick, holiday/personal)

Clothes Company parties Phones/Laptops Retirement programs

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NON MONETARY Enhance dignity and satisfaction from work performed.

Promote social relationship with co-workers.

Allocate sufficient resources to perform work assignments.

Offer supportive leadership and management.

Enhance physiological health, intellectual growth.

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IMPORTANCE OF COMPENSATION MANAGEMENT

Sound compensation/reward system brings peace in the relationship between employee and employer.

It creates a healthy competition among them and encourages employees to work hard and efficiently.

The system provides growth and advancement opportunities to the deserving employees.

The organisation is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to other job.

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CONCLUSION

We can say that good compensation can increase the productivity of an organization because it provides various rewards, bonus, schemes etc. and its compulsory for every organization.

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REFERENCES http://www.slideshare.net/dwnload/comp

ensation-mgt?related=2 http://www.slideshare.net/805984/compe

nsation-management-16470965?related=3

http://www.slideshare.net/saswatbarpanda/compensation-management-17721628

Human Resource Management by Gary Dessler and Biju Varkkey .

Human Resource Management in Practice by Srinivas R. Kandula.

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