Compensation Management SYNOPSIS
Transcript of Compensation Management SYNOPSIS
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A
PROJECT REPORT
COMPENSATION MANAGEMENT: AN ANALYSIS IN RESPECT
OF SALARY WITH 9THPAY REVISION IN IOCL
Submitted by
DINESH KUMARRoll No.-12!2221
In partial fulfillment of requirement For the award of thedegree Of M"A In Human Resource Management
Submitted to
Authorized Learning Centre
CAREER POINT, MATHURA
CODE 00979
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ACKNOWLEDGEMENT
It is with gratitude I acknowledge my heartiest & sincere feeling of
indebtedness to Mr. Shivkant Tiwari my project guide for valuable guidance &
whole hearted support in carrying out completion of my project
COMPENSATION MANAGEMENT: AN ANALYSIS IN RESPECT
OF SALARY WITH 9THPAY REVISION IN IOCL
Through out my report I have tried my level best to be original & present my
own findings.
I would also like to owe special thanks to all my friends for the efforts they
have put in for making this project a reality & giving its present shape. !hole
e"perience was an eye opener for me.
I accept the sole responsibility for any possible error of omission &
commission.
I e"press my deep sense of respect to all Institute staff ofCAREER POINT# I
am also thankful to my parents for their support during my research period.
DINESH KUMARRollNo.-12!2221
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STUDENT DECLARATION
I hereby declare that the project report entitled
COMPENSATION MANAGEMENT: AN ANALYSIS IN RESPECT
OF SALARY WITH 9THPAY REVISION IN IOCL
Submitted in partial fulllment of the requirement
for the degree of MASTERS ! "#SI$ESS
A%MI$ISTRATI$ &'RM( to Si))im Manipal#ni*er+ity, -angto) i+ my original .or) / not
+ubmitted for the a.ard of any other degree,
diploma, fello.+hip, or any other +imilar title or
pri0e+
DINESH KUMAR
12!2221
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Examiner! Cer"i#$a"i%n
The project report of DINESH KUMAR
COMPENSATION MANAGEMENT: AN ANALYSIS IN RESPECT
OF SALARY WITH 9THPAY REVISION IN IOCL
I+ appro*ed and i+ acceptable in
quality and form
Internal E3aminer+ E3ternal
E3aminer
$ame $ame
4ualication 4ualication
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Uni&er!i"' S"()' Cen"er Cer"i#$a"e
Thi+ to certify that the project report entitled
COMPENSATION MANAGEMENT: AN ANALYSIS IN RESPECT
OF SALARY WITH 9THPAY REVISION IN IOCL
Submitted in partial fulllment of the requirement for the
degree of MASTERS ! "#SI$ESS A%MI$ISTRATI$ to Si))im
Manipal #ni*er+ity, -angto) India, thi+ report ha+ been
+ubmitted for the a.ard of any other degree, diploma,
fello.+hip, or any other +imilar title or pri0e+ and that the .or)
ha+ not been publi+hed in any journal or maga0ine
DINESH KUMAR
12!2221
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TABLE OF CONTENTS
1) COMPENSATION MANAGEMENT
2) EXECUTIVE SUMMARY
3) REVIEW LITRETURE AND PROBLEM STATEMENT
4) INTRODUCTION TO THE COMPANY
5) HISTORY OF THE COMPANY
6) OBJECTIVE OF THE PROPOSED STUDY
) RESEARCH METHODOLGY
!) SCOPE"RELEVANCE OF PROPOSED STUDY
#) GLOBAL SCENERIO
1$) INDIAN OIL CORPORATION LTD IN NORTH EAST
REGION% GUWAHATI REFINERY
11) DATA INTERPRETATION AND ANALYSIS
12) FINDINGS OF THE SURVEY
&) CONCLUSION
') RECOMMENDATION ( SUGGESTION
13) REFERENCE
14) APPENDIX
UESTIONNAIRE
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WHAT IS COMPENSATION MANAGEMENT*
Compensaton s pa!ment n t"e #o$m o# "o%$&! 'a(es o$ ann%a& sa&a$! )om*ne+
't" *ene#ts s%)" as ns%$an)e, -a)aton, sto). optons, et)/ t"at )an post-e&! o$
ne(at-e&! a##e)t an emp&o!ee0s 'o$. pe$#o$man)e/
An +ea& )ompensaton mana(ement s!stem '&& "e&p !o% s(n#)ant&! *oost t"e
pe$#o$man)e o# !o%$ emp&o!ees an+ )$eate a mo$e en(a(e+ 'o$.#o$)e t"at1s '&&n( to
(o t"e e2t$a m&e #o$ !o%$ o$(an3aton/ S%)" a s!stem s"o%&+ *e 'e&&4+e#ne+ an+
%n#o$m an+ s"o%&+ app&! to a&& &e-e&s o# t"e o$(an3aton as a (ene$a& s!stem// P&%s
!o%1&& en5o! )&ea$e$ -s*&t! nto n+-+%a& emp&o!ee pe$#o$man)e '"en t )omes
tme to ma.e )$t)a& )ompensaton p&annn( +e)sons/
Wt" e##e)t-e )ompensaton mana(ement !o%1&& a&so en5o! )&ea$e$ -s*&t! nto
n+-+%a& emp&o!ee pe$#o$man)e '"en t )omes tme to ma.e )$t)a& )ompensaton
p&annn( +e)sons/ T"ese pe$#o$man)e app$asa&s assst n +ete$mnn( )ompensaton
an+ *ene#ts, *%t t"e! a$e a&so nst$%menta& n +ent#!n( 'a!s to "e&p n+-+%a&s
mp$o-e t"e$ )%$$ent postons an+ p$epa$e #o$ #%t%$e oppo$t%ntes/
D*+,-,.,/-
Compensaton s a s!stemat) app$oa)" to p$o-+n( moneta$! -a&%e to emp&o!ees n
e2)"an(e #o$ 'o$. pe$#o$me+/ Compensaton ma! a)"e-e se-e$a& p%$poses assstn(
n $e)$%tment, 5o* pe$#o$man)e, an+ 5o* sats#a)ton/
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:hat i+ ;M
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T'+e! % C%m+en!a"i%n
;ompen+ation pro*ided to employee+ can direct in the form of monetary
benet+ and>or indirect in the form of non?monetary benet+ )no.n a+
per)+, time o@, etc ;ompen+ation doe+ not include only +alary but it i+ the
+um total of all re.ard+ and allo.ance+ pro*ided to the employee+ in
return for their +er*ice+ If the compen+ation o@ered i+ e@ecti*ely
managed, it contribute+ to high organi0ational producti*ity
%irect ;ompen+ation
Indirect ;ompen+ation
Nee) % C%m+en!a"i%n Mana-emen"
A good compen+ation pac)age i+ important to moti*ate theemployee+ to increa+e the organi0ational producti*ity
#nle++ compen+ation i+ pro*ided no one .ill come and .or) for the
organi0ation Thu+, compen+ation help+ in running an organi0ation
e@ecti*ely and accompli+hing it+ goal+
Salary i+ ju+t a part of the compen+ation +y+tem, the employee+
ha*e other p+ychological and +elf?actuali0ation need+ to fulll Thu+,
compen+ation +er*e+ the purpo+e
The mo+t competiti*e compen+ation .ill help the organi0ation to
attract and +u+tain the be+t talent The compen+ation pac)age
+hould be a+ per indu+try +tandard+
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S.0&.*, C/*-&.,/-
St$ate() )ompensaton s +ete$mnn( an+ p$o-+n( t"e )ompensaton pa).a(es to
t"e emp&o!ees t"at a$e a&(ne+ 't" t"e *%sness (oa&s an+ o*5e)t-es/ In to+a!1s
)ompett-e s)ena$o o$(an3atons "a-e to ta.e spe)a& meas%$es $e(a$+n(
)ompensaton o# t"e emp&o!ees so t"at t"e o$(an3atons $etan t"e -a&%a*&eemp&o!ees/ T"e )ompensaton s!stems "a-e )"an(e+ #$om t$a+tona& ones to st$ate()
)ompensaton s!stems/
W.a" i! COMPENSATION MANAGEMENT*****
Compensaton s pa!ment n t"e #o$m o# "o%$&! 'a(es o$ ann%a& sa&a$! )om*ne+
't" *ene#ts s%)" as ns%$an)e, -a)aton, sto). optons, et)/ t"at )an post-e&! o$
ne(at-e&! a##e)t an emp&o!ee0s 'o$. pe$#o$man)e/
An +ea& )ompensaton mana(ement s!stem '&& "e&p !o% s(n#)ant&! *oost t"e
pe$#o$man)e o# !o%$ emp&o!ees an+ )$eate a mo$e en(a(e+ 'o$.#o$)e t"at1s '&&n( to
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(o t"e e2t$a m&e #o$ !o%$ o$(an3aton/ S%)" a s!stem s"o%&+ *e 'e&&4+e#ne+ an+
%n#o$m an+ s"o%&+ app&! to a&& &e-e&s o# t"e o$(an3aton as a (ene$a& s!stem// P&%s
!o%1&& en5o! )&ea$e$ -s*&t! nto n+-+%a& emp&o!ee pe$#o$man)e '"en t )omes
tme to ma.e )$t)a& )ompensaton p&annn( +e)sons/
Wt" e##e)t-e )ompensaton mana(ement !o%1&& a&so en5o! )&ea$e$ -s*&t! nto
n+-+%a& emp&o!ee pe$#o$man)e '"en t )omes tme to ma.e )$t)a& )ompensaton
p&annn( +e)sons/ T"ese pe$#o$man)e app$asa&s assst n +ete$mnn( )ompensaton
an+ *ene#ts, *%t t"e! a$e a&so nst$%menta& n +ent#!n( 'a!s to "e&p n+-+%a&s
mp$o-e t"e$ )%$$ent postons an+ p$epa$e #o$ #%t%$e oppo$t%ntes/
D*+,-,.,/-
Compensaton s a s!stemat) app$oa)" to p$o-+n( moneta$! -a&%e to emp&o!ees n
e2)"an(e #o$ 'o$. pe$#o$me+/ Compensaton ma! a)"e-e se-e$a& p%$poses assstn(
n $e)$%tment, 5o* pe$#o$man)e, an+ 5o* sats#a)ton/
T* /+ C/*-&.,/- M&-&**-.
D,0*. C/*-&.,/-7
6$e)t )ompensaton $e#e$s to moneta$! *ene#ts o##e$e+ an+ p$o-+e+ to
emp&o!ees n $et%$n o# t"e se$-)es t"e! p$o-+e to t"e o$(an3aton/ T"e moneta$!
*ene#ts n)&%+e *as) sa&a$!, "o%se $ent a&&o'an)e, )on-e!an)e, &ea-e t$a-e&
a&&o'an)e, me+)a& $em*%$sements, spe)a& a&&o'an)es, *on%s, P#7G$at%t!, et)/
T"e! a$e (-en at a $e(%&a$ nte$-a& at a +e#nte tme/
B&, S&8&0
Sa&a$! s t"e amo%nt $e)e-e+ *! t"e emp&o!ee n &e% o# t"e 'o$. +one *! "m7"e$
#o$ a )e$tan pe$o+ sa! a +a!, a 'ee., a mont", et)/ It s t"e mone! an emp&o!ee
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$e)e-es #$om "s7"e$ emp&o!e$ *! $en+e$n( "s7"e$ se$-)es/
H/9* R*-. A88/:&-*
O$(an3atons et"e$ p$o-+e a))ommo+atons to ts emp&o!ees '"o a$e #$om
+##e$ent state o$ )o%nt$! o$ t"e! p$o-+e "o%se $ent a&&o'an)es to ts emp&o!ees/
T"s s +one to p$o-+e t"em so)a& se)%$t! an+ mot-ate t"em to 'o$./
C/-;*&-*
O$(an3atons p$o-+e #o$ )a* #a)&tes to t"e$ emp&o!ees/ Fe' o$(an3atons a&so
p$o-+e -e")&es an+ pet$o& a&&o'an)es to t"e$ emp&o!ees to mot-ate t"em/
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L*&* T0&*8 A88/:&-*
T"ese a&&o'an)es a$e p$o-+e+ to $etan t"e *est ta&ent n t"e o$(an3aton/ T"e
emp&o!ees a$e (-en a&&o'an)es to -st an! p&a)e t"e! 's" 't" t"e$ #am&es/
T"e a&&o'an)es a$e s)a&e+ as pe$ t"e poston o# emp&o!ee n t"e o$(an3aton/
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L*&* P/8,
It s t"e $("t o# emp&o!ee to (et a+e%ate n%m*e$ o# &ea-e '"&e 'o$.n( 't" t"e
o$(an3aton/ T"e o$(an3atons p$o-+e #o$ pa+ &ea-es s%)" as, )as%a& &ea-es,
me+)a& &ea-es ;s). &ea-e
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I-90&-*
O$(an3atons a&so p$o-+e #o$ a))+enta& ns%$an)e an+ e ns%$an)e #o$ emp&o!ees/
T"s (-es t"em t"e emotona& se)%$t! an+ t"e! #ee& t"emse&-es -a&%e+ n t"e
o$(an3aton/
L*&* T0&*8
T"e emp&o!ees a$e p$o-+e+ 't" &ea-es an+ t$a-e& a&&o'an)es to (o #o$ "o&+a! 't"
t"e$ #am&es/ Some o$(an3atons a$$an(e #o$ a to%$ #o$ t"e emp&o!ees o# t"e
o$(an3aton/ T"s s %s%a&&! +one to ma.e t"e emp&o!ees st$ess #$ee/
R*.,0**-. B*-*+,.
O$(an3atons p$o-+e #o$ penson p&ans an+ ot"e$ *ene#ts #o$ t"e$ emp&o!ees '")"
*ene#ts t"em a#te$ t"e! $et$e #$om t"e o$(an3aton at t"e p$es)$*e+ a(e/
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most 'ante+ "o&+a! spots/ T"e o$(an3atons ma.e s%$e t"at t"e emp&o!ees +o not
#a)e an! .n+ o# +##)%&tes +%$n( t"e$ sta! n t"e (%est "o%se/
F8*>,'8* T,,-
O$(an3atons p$o-+e #o$ #&e2*&e tmn(s to t"e emp&o!ees '"o )annot )ome to 'o$.
+%$n( no$ma& s"#ts +%e to t"e$ pe$sona& p$o*&ems an+ -a&+ $easons/
IMPORTANCE O/ COMPENSATION
Compensaton an+ Re'a$+ s!stem p&a!s -ta& $o&e n a *%sness o$(an3aton/
Sn)e, amon( #o%$ Ms, /e/ Men, Mate$a&, Ma)"ne an+ Mone!, Men "as *een
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most mpo$tant #a)to$, t s mposs*&e to ma(ne a *%sness p$o)ess 't"o%t Men/
E-e$! #a)to$ )ont$*%tes to t"e p$o)ess o# p$o+%)ton7*%sness/ It e2pe)ts $et%$n
#$om t"e *%sness p$o)ess s%)" as $ent s t"e $et%$n e2pe)te+ *! t"e &an+&o$+,
)apta&st e2pe)ts nte$est an+ o$(an3e$ /e/ ent$ep$ene%$ e2pe)ts p$o#ts/ Sm&a$&!
t"e &a*o%$ e2pe)ts 'a(es #$om t"e p$o)ess/
La*o%$ p&a!s -ta& $o&e n *$n(n( a*o%t t"e p$o)ess o# p$o+%)ton7*%sness n
moton/ T"e ot"e$ #a)to$s *en( "%man, "as e2pe)tatons, emotons, am*tons an+
e(os/
La*o%$ t"e$e#o$e e2pe)ts to "a-e #a$ s"a$e n t"e *%sness7p$o+%)ton p$o)ess/
T"e$e#o$e a #a$ )ompensaton s!stem s a m%st #o$ e-e$! *%sness o$(an3aton/
T"e #a$ )ompensaton s!stem '&& "e&p n t"e #o&&o'n(:
o An +ea& )ompensaton s!stem '&& "a-e post-e mpa)t on t"e e##)en)!
an+ $es%&ts p$o+%)e+ *! emp&o!ees/ It '&& en)o%$a(e t"e emp&o!ees to
pe$#o$m *ette$ an+ a)"e-e t"e stan+a$+s #2e+/
o It '&& en"an)e t"e p$o)ess o# 5o* e-a&%aton/ It '&& a&so "e&p n settn( %p
an +ea& 5o* e-a&%aton an+ t"e set stan+a$+s 'o%&+ *e mo$e $ea&st) an+
a)"e-a*&e/
o S%)" a s!stem s"o%&+ *e 'e&& +e#ne+ an+ %n#o$m/ It '&& *e app&! to a&&
t"e &e-e&s o# t"e o$(an3aton as a (ene$a& s!stem/
o T"e s!stem s"o%&+ *e smp&e an+ #&e2*&e so t"at e-e$! emp&o!ee 'o%&+ *e
a*&e to )omp%te "s o'n )ompensaton $e)e-a*&e/
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o It s"o%&+ *e eas! to mp&ement, s"o%&+ not $es%&t n e2p&otaton o#
'o$.e$s/
o It '&& $ase t"e mo$a&e, e##)en)! an+ )oope$aton amon( t"e 'o$.e$s/ It,
*en( 5%st an+ #a$ 'o%&+ p$o-+e sats#a)ton to t"e 'o$.e$s/
o S%)" s!stem 'o%&+ "e&p mana(ement n )omp&!n( 't" t"e -a$o%s &a*o$
a)ts/
o S%)" s!stem s"o%&+ a&so so&-e +sp%tes *et'een t"e emp&o!ee %non an+
mana(ement/
o T"e s!stem s"o%&+ #o&&o' t"e mana(ement p$n)p&e o# e%a& pa!/
o It s"o%&+ mot-ate an+ en)o%$a(ement t"ose '"o pe$#o$m *ette$ an+
s"o%&+ p$o-+e oppo$t%ntes #o$ t"ose '"o 's" to e2)e&/
o So%n+ Compensaton7Re'a$+ S!stem *$n(s pea)e n t"e $e&atons"p o#
emp&o!e$ an+ emp&o!ees/
o It ams at )$eatn( a "ea&t"! )ompetton amon( t"em an+ en)o%$a(es
=>emp&o!ees to 'o$. "a$+ an+ e##)ent&!/
o T"e s!stem p$o-+es ($o't" an+ a+-an)ement oppo$t%ntes to t"e
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+ese$-n( emp&o!ees/
o T"e pe$#e)t )ompensaton s!stem p$o-+es p&at#o$m #o$ "app! an+ sats#e+
'o$.#o$)e/ T"s mnm3es t"e &a*o%$ t%$no-e$/ T"e o$(an3aton en5o!s
t"e sta*&t!/
o T"e o$(an3aton s a*&e to $etan t"e *est ta&ent *! p$o-+n( t"em
a+e%ate )ompensaton t"e$e*! stoppn( t"em #$om s't)"n( o-e$ to
anot"e$ 5o*/
o T"e *%sness o$(an3aton )an t"n. o# e2panson an+ ($o't" # t "as t"e
s%ppo$t o# s.&%&, ta&ente+ an+ "app! 'o$.#o$)e/
o T"e so%n+ )ompensaton s!stem s "a&&ma$. o# o$(an3aton1s s%))ess an+
p$ospe$t!/ T"e s%))ess an+ sta*&t! o# o$(an3aton s meas%$e+ 't" pa!4
pa).a(e t p$o-+es to ts emp&o!ees/
COMPENSATION MANAGEMENT7 SUCCESS FACTORS
Man! o# to+a!0s seno$ e2e)%t-es name pa!4#o$4pe$#o$man)e as t"e most
)$t)a& too& n a)"e-n( t"e ($eatest #nan)a& $es%&ts at t"e$ )ompanes/
8%t, mp&ementn( $ea&, pa!4#o$4pe$#o$man)e s ease$ sa+ t"an +one/
S%))ess Fa)to$s ma.es t eas! #o$ !o% to %).&! an+ eas&! mp&ement a
po'e$#%& pa!4#o$4pe$#o$man)e st$ate(!/ 8! $e'a$+n( ($eat e2e)%ton,
!o% '&& *ette$ $etan !o%$ top ta&ent an+ +$-e o$(an3atona&
pe$#o$man)e t"at e2)ee+s a&& e2pe)tatons/ P&%s, !o%0&& en5o! )&ea$e$
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-s*&t! nto n+-+%a& emp&o!ee pe$#o$man)e '"en t )omes tme to
ma.e )$t)a& )ompensaton p&annn( +e)sons/
Tr(e +a'%r+er%rman$e $(1"(re im+r%&e!re"en"i%n2 Employee+ .ho outperform their peer+
.ill be re.arded appropriately, feel *alued and happy
Dand more li)ely to +tay .ith your company
On-%in- $%m+1ian$e2 %e+ign your compen+ation
+trategy .ith objecti*e data and communicate it to
manager+ to +tay .ithin allocated budget+ and to
employee+ to +ho. the clear lin) bet.een
compen+ation and performance e3pectation+
3()-e" %+"imi4a"i%n2Run .hat?if +cenario+ and
in+tantly +ee ho. increa+ing merit pay to your be+t
employee+ .ould impact your budget
C%!" !a&in-!2Eliminate thou+and+ of dollar+ from
your e3pen+e column each year by ma)ing +ure
youFre not o*erpaying lo. performer+ Al+o, the ea+y?
to?u+e automated +y+tem .ill +a*e compen+ation
manager+ time and money
5er% err%r !'!"em2Manage your compen+ation in a+ecure en*ironment .ith +treamlined .or)Go.+
.here your data i+ determined *ia calculation and
eligibility engine+Deliminating pri*acy breache+ and
human calculation error+
H9&- R*/90* M&-&**-. ? B*-*+,. (
C/*-&.,/-21
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In a s&%((s" e)onom!, )ompensaton s!stem (ets a ne' #o)%s *! $e'a$+n( sta$
pe$#o$me$s mo$e t"an t"e $est o# t"e pa). 3-P Compensation: Pay for
Performance In t"s a$t)&e 'e &oo. at "o' an o$(an3aton +e-e&ops a
mot-atn( an+ $e'a$+n( n)ent-e p&an/ An executive perspective onemployee benefitsE2e)%t-es sa! emp&o!ee *ene#ts "e&p )ompanes )ompete
*%t "a-e an n)omp&ete %n+e$stan+n( o# *ene#ts an+ "o' t"e! pe$#o$m/ Res%&ts o# a
M)?nse! S%$-e!/ p+#4#&e/ @B/ A$t)&e sta$ts at pa(e >@ An Overview of
Recent Trends in Incentive Pay Prorams T"s a$t)&e e2amnes
$e)ent t$en+s an+ +e-e&opments n an n)$easn(&! pop%&a$ HR p$a)t)e44n)ent-e pa!
p$o($ams/ P+#4#&e Analy!in Compensation "ataG%+e +es)$*es t"$ee
app$oa)"es t"at Fe+e$a& )ont$a)to$s ma! %se to ana&!3e t"e$ )ompensaton s!stems
ana&!ses ma! *e %se#%& n +ete$mnn( # t"e$e a$e patte$ns o# +s)$mnaton n t"e
'o$.#o$)e #o)%s s on ana&!ses o# sa&a$es o$ 'a(es, p$o)e+%$es )an *e %se+ to
ana&!3e ot"e$ #o$ms o# )ompensaton as 'e&&/ TOP Are #i$er Pay
Increases %ecessarily &etter' T"s st%+! n-est(ate+ t"e $e&atons"p
*et'een pa! n)$ease pe$)enta(es an+ pa! sats#a)ton amon( >> M8A st%+ents an+
#o%n+ t"at pa! sats#a)ton "a+ t"e &a$(est n)$ease *et'een t"$ee pe$)ent an+ se-en
pe$)ent an+ appea$e+ to &e-e& o## *et'een se-en pe$)ent an+ e&e-en pe$)ent,s%((estn( t"at t"e$e ma! *e a pont at '")" "(" pa! n)$eases ma! not ne)essa$&!
&ea+ to mo$e sats#a)ton/ In a++ton, t 'as #o%n+ t"at pa! n)$eases *et'een s2 an+
e("t pe$)ent a$e t"e mnm%m amo%nts nee+e+ #o$ pa! n)$ease sats#a)ton/ Fna&&!,
'e s%((est t"at emp&o!ees ma! not nee+ as "(" o# a pa! n)$ease to e2pe$en)e
sats#a)ton 't" t"e$ pa! n)$ease '"en p$o-+n( t"ose emp&o!ees 't" a s(na&,
s%)" as an a-e$a(e pa! n)$ease/ p+# &uildin a &etter ()*+,=>;.< p&an
sponso$s a$e ta.n( steps to ma.e t"e$ p&ans mo$e att$a)t-e to emp&o!ees n @D/an%a$! @D Compensation Plannin: T$e .ey to Profitability
T"s *oo. )an "e&p *$o.e$s )$eate e##e)t-e n+-+%a& )ompan! )ompensaton p&ans
*! (-n( t"em a *ette$ %n+e$stan+n( o# "o' )"an(es to e2stn( )ompensaton
s)"e+%&es a##e)t t"e )ompan! #nan)es as a '"o&e/ P+#4#&e D/B M8
Compensation Plans An o-e$-e', a$t)&e p$o-+e+ *! Sa&a$! So%$)e
/xplainin /xecutive Compensation Mana(e$a& Po'e$ -s/ t"e
Pe$)e-e+ Cost o# Sto). Optons/ Wo$.n( Pape$/ P+#4#&e 0lossaryO# Emp&o!ee8ene#t Te$ms Is 1our 2on-Term Incentive Plan Really
22
http://www.mercerhr.com/summary.jhtml/dynamic/idContent/1204555http://www.mercerhr.com/summary.jhtml/dynamic/idContent/1204555http://www.mercerhr.com/summary.jhtml/dynamic/idContent/1204555http://download.mckinseyquarterly.com/srbonus-2006-08.pdfhttp://download.mckinseyquarterly.com/srbonus-2006-08.pdfhttp://www.coastal.edu/business/cbj/pdfs/articles/Schraeder-IncentivePay.pdfhttp://www.coastal.edu/business/cbj/pdfs/articles/Schraeder-IncentivePay.pdfhttp://www.dol.gov/esa/regs/compliance/ofccp/compdata.htmhttp://applyhrm.asp.radford.edu/Volume%2010/MS%2010_1_%20Bhakta%20&%20Nagy.pdfhttp://applyhrm.asp.radford.edu/Volume%2010/MS%2010_1_%20Bhakta%20&%20Nagy.pdfhttp://www.businessfinancemag.com/archives/appfiles/Article.cfm?IssueID=370&ArticleID=13934http://www.businessfinancemag.com/archives/appfiles/Article.cfm?IssueID=370&ArticleID=13934http://www.compensationmasterusa.com/pdf/compplng.pdfhttp://www.salarysource.com/articles.cfmhttp://www-rcf.usc.edu/~kjmurphy/MurphyCLR.pdfhttp://www.ifebp.org/glossary/default.asphttp://www.ifebp.org/glossary/default.asphttp://www.buckconsultants.com/buckconsultants/portals/0/documents/publications/published_articles/2008/Articles_Scumer_BNA_November2008.pdfhttp://www.mercerhr.com/summary.jhtml/dynamic/idContent/1204555http://www.mercerhr.com/summary.jhtml/dynamic/idContent/1204555http://download.mckinseyquarterly.com/srbonus-2006-08.pdfhttp://download.mckinseyquarterly.com/srbonus-2006-08.pdfhttp://www.coastal.edu/business/cbj/pdfs/articles/Schraeder-IncentivePay.pdfhttp://www.coastal.edu/business/cbj/pdfs/articles/Schraeder-IncentivePay.pdfhttp://www.dol.gov/esa/regs/compliance/ofccp/compdata.htmhttp://applyhrm.asp.radford.edu/Volume%2010/MS%2010_1_%20Bhakta%20&%20Nagy.pdfhttp://applyhrm.asp.radford.edu/Volume%2010/MS%2010_1_%20Bhakta%20&%20Nagy.pdfhttp://www.businessfinancemag.com/archives/appfiles/Article.cfm?IssueID=370&ArticleID=13934http://www.compensationmasterusa.com/pdf/compplng.pdfhttp://www.salarysource.com/articles.cfmhttp://www-rcf.usc.edu/~kjmurphy/MurphyCLR.pdfhttp://www.ifebp.org/glossary/default.asphttp://www.buckconsultants.com/buckconsultants/portals/0/documents/publications/published_articles/2008/Articles_Scumer_BNA_November2008.pdf -
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Performance-&ased' Lon(4te$m n)ent-e p&ans ;LTIPs< t!p)a&&! p$o-+e t"e
&a$(est )omponent o# seno$ e2e)%t-es1 )ompensaton, most o#ten t"$o%(" one o$
mo$e o# t"$ee e%t!4*ase+ t!pes: sto). optons, $est$)te+ sto)., an+ '"at a$e o#ten
)a&&e+ pe$#o$man)e s"a$es/
T"s a$t)&e #o)%ses on pe$#o$man)e s"a$es, an n)$easn(&! )ommon #o$m o#
pe$#o$man)e4*ase+ LTIPs, an+ t"e$ mpo$tan)e as a ma5o$ )omponent o# e2e)%t-e
pa!/ We *e&e-e t"at pe$#o$man)e s"a$es esta*&s" t"e st$on(est &n. n t!n(
)ompensaton to pe$#o$man)e/ T"e a$t)&e a&so p$esents +ata on t"e n)$easn(
p$e-a&en)e o# t"ese t!pes o# p&ans/ p+#
2abor tatisticsE2tens-e )omp&aton o# statst)s an+ +ata 4isc5 Issues
O-e$-e' on some )ompensaton4 an+ *ene#ts4$e&ate+ ss%es: pa! e%t!, -a$a*&e pa!
s!stems, sto). p&ans, $et$ement p&ans, "ea&t" an+ 'ea$e p&ans, pa+ tme o##,
(o-e$nment man+ate+ *ene#ts Offer a C$oice of Compensation Plans
to 0ain a Competitive Advantae p+#4#&e @D Orani!ational
Pay 4ix T"e Imp&)atons o# Va$o%s T"eo$et)a& Pe$spe)t-es #o$ t"e
Con)ept%a&3aton an+ Meas%$ement o# In+-+%a& Pa! Components/ P+#4#&e
Orani!ation-wide &road-based Incentives: Rational T$eory
and /vidence 6espte t"e '+esp$ea+ %se o#n)ent-e pa!, t"e$e s &mte+
e-+en)e a*o%t '"at #a)to$s n#&%en)e ts o$(an3aton4'+e, *$oa+4*ase+ app&)aton/
P+#4#&e Payin for Performance: An Overloo,ed Opportunity
Sa&es #o$)e +ep&o!ment an+ )ompensaton a$e amon( t"e most po'e$#%& means a
)ompan! "as to mp$o-e ($o't", ma$.et s"a$e, an+ p$o#ta*&t!/ Yet #e' )ompanes
ta.e t"e tme to a&(n t"e$ pa!o%t s!stems 't" )%$$ent st$ate(!/ T"e a%t"o$ e2p&ans
"o' to +es(n a s%))ess#%& )ompensaton p&an t"at s p$e)se, #a$, an+ smp&e/ p+#4#&e
Performance based PayT"e Va&%e o# Pe$#o$man)e48ase+ Pa! n t"e Wa$
#o$ Ta&ent, p+#4+o'n&oa+ -e$son Performance tandards in Incentive
ContractsResea$)" n n)ent-es "as #o)%se+ on pe$#o$man)e meas%$es an+ pa!4
pe$#o$man)e senst-tes *%t "as &a$(e&! (no$e+ t"e pe$#o$man)e stan+a$+, '")"
(ene$ates mpo$tant n)ent-es '"ene-e$ p&an pa$t)pants )an n#&%en)e t"e stan+a$+4
settn( p$o)ess/ Wo$.n( pape$/ p+#4#&e Promise and Peril in
2
http://www.buckconsultants.com/buckconsultants/portals/0/documents/publications/published_articles/2008/Articles_Scumer_BNA_November2008.pdfhttp://www.bls.gov/data/http://www.auxillium.com/pay.shtmlhttp://www.compensationmasterusa.com/pdf/trends_winter03.pdfhttp://www.compensationmasterusa.com/pdf/trends_winter03.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-02.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-02.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-05.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-05.pdfhttp://www.bcg.com/publications/files/Paying_Performance_OfA_Nov01.pdfhttp://www.ilr.cornell.edu/depts/CAHRS/PDFs/WorkingPapers/WP99-06.pdfhttp://www-rcf.usc.edu/~kjmurphy/PerfStand.pdfhttp://www-rcf.usc.edu/~kjmurphy/PerfStand.pdfhttp://www.people.hbs.edu/bhall/NOMTalks/papers/HPPayExperimentFinal2_25.pdfhttp://www.buckconsultants.com/buckconsultants/portals/0/documents/publications/published_articles/2008/Articles_Scumer_BNA_November2008.pdfhttp://www.bls.gov/data/http://www.auxillium.com/pay.shtmlhttp://www.compensationmasterusa.com/pdf/trends_winter03.pdfhttp://www.compensationmasterusa.com/pdf/trends_winter03.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-02.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-02.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-05.pdfhttp://www.ilr.cornell.edu/depts/cahrs/downloads/pdfs/workingpapers/WP02-05.pdfhttp://www.bcg.com/publications/files/Paying_Performance_OfA_Nov01.pdfhttp://www.ilr.cornell.edu/depts/CAHRS/PDFs/WorkingPapers/WP99-06.pdfhttp://www-rcf.usc.edu/~kjmurphy/PerfStand.pdfhttp://www-rcf.usc.edu/~kjmurphy/PerfStand.pdfhttp://www.people.hbs.edu/bhall/NOMTalks/papers/HPPayExperimentFinal2_25.pdf -
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Implementin Pay for Performance: A Report on T$irteen
%atural /xperiments6espte t"e pop%&a$t! o# pa! #o$ pe$#o$man)e p$o($ams,
-e$! &tt&e $esea$)" "as e2amne+ t"e +!nam)s an+ +&emmas asso)ate+ 't"
mp&ementn( t"ese p$o($ams/ We st%+e+ t"e mp&ementaton o# t"$teen e2pe$mentsn pa! #o$ pe$#o$man)e t"at 'e$e ntate+ *! &o)a& mana(ement n a "("4)ommtment
)ompan! ;He'&ett Pa).a$+
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COMPENSATION MANAGEMENT 7 SALARY NEGOTIATION
Compensaton mana(ement )"apte$ )ontan 'a(e an+ sa&a$! aspe)t/ T"e 'o$+ sa&a$!
app&es to )ompensaton t"at s %n#o$m #$om one pe$o+ to t"e ne2t an+ +oes not
+epen+ %pon t"e n%m*e$ o# "o%$s 'o$.e+/
C/*-&.,/- M&-&**-. O'@*.,;*7
Wa(e, Compensaton an+ t"e$ a+mnst$aton
o* Sats#a)ton
La*o%$ an+ Wa(e T"eo$es
C&ass#)aton o# Wa(es
Ma)"ne$! #o$ #2n( 'a(es
o* E-a&%aton
O*5e)t-es o# 5o* e-a&%aton an+ met"o+s o# e-a&%aton
P$omotons an+ t$ans#e$s
W&* &-< S&8&0 A
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$espons*&tes t"at, as a '"o&e, s $e(a$+e+ as t"e $easona*&e ass(nment to an
n+-+%a& emp&o!ee/ o* s .no'n as mpe$sona& "o'e-e$ poston s .no'n as
pe$sona&/ o* a&'a!s )ontans a poston '")" +e#nes some set o# 'o$.s/
J/' S&.,+&.,/-
o* sats#a)ton +epen+s on t"e st%atons an+ en-$onment o# 'o$. atmosp"e$e/
A))o$+n( to t"e M8A o* sats#a)ton s +ete$mne+ *! a set o# pe$sona& an+ 5o*
#a)to$s, pe$sona& #a)to$s $e&ate to 'o$.e$1s a(e, &en(t" o# se$-)e, nte&&(en)e, s.&&,
an+ ot"e$ pe$sona&t! o$ tempe$amenta& #a)to$s/
A*o%t t"e o* E-a&%aton 8$ts" Instt%te o# Mana(ement "as +e#ne+ 5o* e-a&%aton
as t"e p$o)ess o# ana&!ss an+ assessment o# 5o*s to as)e$tan $e&a*&! t"e$ $e&at-e
'o$t", %sn( t"e assessment as a *ass #o$ a *a&an)e+ 'a(e st$%)t%$e/
o* ana&!ss s t"e p$o)ess o# (ettn( n#o$maton a*o%t 5o*s spe)#)a&&!, '"at t"e
'o$.e$ +oes "o' "e (ets t +one '"! "e +oes t s.&&, e+%)aton an+ t$ann(
$e%$e+ $e&atons"ps to ot"e$ 5o*s p"!s)a& +eman+s an+ en-$onmenta&
)on+tons/
O- .* @/' *;/89.,/- *./
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P(o$s Me!e$s (-e a %n%e +e#nton o# p$omoton '")" s, t"e a+-an)ement o#
an emp&o!ee to a *ette$ 5o* *ette$ n te$ms o# ($eate$ $espe)t o# pa! an+ sa&a$!/
8ette$ "o%ses o# 'o$. o$ *ette$ &o)aton o$ *ette$ 'o$.n( )on+tons4a&so ma!
)"a$a)te$3e t"e *ette$ &o)aton o$ *ette$ 'o$.n( )on+tons4a&so ma! )"a$a)te$3e t"e
*ette$ 5o* to '")" an emp&o!ee see.s p$omotons, *%t # t"e 5o* +oes not n-o&-e
($eate$ s.&& o$ $espons*&tes an+ "("e$ pa!, t s"o%&+ not *e )ons+e$e+ a
p$omotons/
On t"e S%*5e)t o# T$ans#e$ P(o$s an+ Ma!e$s a&so '$tes, t"e mo-ement o# an
emp&o!ee #$om one 5o* to anot"e$ on t"e same o))%patona& &e-e& an+ at a*o%t t"e
same &e-e& o# 'a(es o$ sa&a$!/
In t"e en+ o# t"e )"apte$ 'e )an sa! t"at Compensaton Mana(ement +ea&s not on&!
sa&a$! an+ 'a(es *%t a&so 5o* ana&!ss an+ 5o* sats#a)ton/
28
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E6ECUTIE SUMMAR8
In t"e s)ena$o o# )ompett-e *%sness en-$onment, t "as *e)ome
mpo$tant #o$ a mana(ement st%+ent to e%p "mse"e$se 't" t"e
p$a)t)a& e2pos%$e o# t"e )o$po$ate 'o$&+/ It 'as ($eat p$-&e(e #o$ me to
%n+e$stan+ t"e p$a)t)a& HR aspe)ts &ea$nt n o%$ )o&&e(e )&ass$oom at
In+an O& Co$po$aton, G%'a"at/
In $e(a$+s to t"s p$o5e)t I 'as as.e+ to ana&!se t"e )ompensaton
pa).a(e n an O& In+%st$! n $espe)t to 9 t"pa! $e-son/ It 'as ana&!3e+
t"at t"e emp&o!ees 'e$e #%&&! sats#e+ n $espe)t to t"e$ n)$ement n
t"e$ sa&a$! pa).a(e/
An on&ne nte$-e' an+ te&ep"on) nte$-e' 'as *en( )on+%)te+ an+
%estonna$e 'as *en( +st$*%te+ a))o$+n(&!/
T"e #ee+*a). o# t"e $espon+ents 'as *en( %p to ma$. an+ a post-e
$esponse 'as *en( )a$$e+ o%t/
29
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R*;,*: /+ 8,.*0&.90* &-< P0/'8* S.&.**-.
I# an!one o# !o% %se+ )ompensaton mana(ement n SAP HR -e$son =/ e2tenson
one o$ ea$&e$, !o% '&& .no' n t"e o&+ -e$son, t"e )ompensaton statement s )a&&e+
Tota& Compensaton Statement/ In t"e ne' Ente$p$se Compensaton Mana(ement,
t s no' )a&&e+ Compensaton Re-e' Statement/
To )on#(%$e t"e SAP Ente$p$se Compensaton Re-e' Statement, !o% 'o%&+ nee+ to
a))ess t n t"e )on#(%$aton IMG SPRO 4J Pe$sonne& Mana(ement 4J Ente$p$se
Compensaton Mana(ement 4J Compensaton Statement/
Yo% #$st "a-e to +e#ne '"at to n)&%+e n t"e Compensaton Re-e' Statement #o$)a&)%&aton/ Yo% '&& +o t"s at t"e 6ete$mne St$%)t%$e #o$ Tota& Compensaton
Statement/ T"e ne2t pe)e s to +ete$mne '"at 'a(e t!pes )ontan t"e -a&%es !o%
te&& t to n)&%+e n t"e Se&e)t Wa(e T!pe #o$ Pa! Cate(o$!/
At t"e C$eate Fo$m Fo$ Tota& Compensaton Statement, !o% '&& *e 'o$.n( 't"
Sma$t#o$m to +es(n t"e &a!o%t o# t"e #o$m %se+ '"en p$ntn( t"e statement/
Ente$p$se Compensaton Statement %ses t"e #o$m HRKECMKCRS, no to *e
)on#%se+ 't" HRKCMPKTCS %se+ *! t"e o&+ Compensaton Mana(ement/
A#te$ !o% )omp&ete+ t"e #$st D steps o%t&ne+ a*o-e, t"e = t"step s '"e$e t"e
)on#%son *e(ns/ In t"e o&+ Compensaton Mana(ement, !o% )o%&+ +ete$mne '"at
#o$m to %se+ *! t"e Tota& Compensaton Statement $epo$t t"$o%(" an ent$! n
TS/ I# !o% a$e a))ess t -a t"e IMG, t s )a&&e+ 6ete$mne Stan+a$+ Fo$m Fo$
Tota& Compensaton Statement/ T"e p$o*&em s, t"s e2a)t st$%)t%$e s a-a&a*&e n
*ot" t"e Ente$p$se Compensaton Mana(ement an+ t"e o&+ CompensatonMana(ement/ It s pontn( to t"e e2a)t same ent$!/
In t"e Compensaton Re-e' Statement ;P$o($am: RHECMKPRINTKCRS,
T$ansa)ton: PECMKPRINTKCRS
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SAP, !o% '&& "ea$ n%me$o%s tmes not to )"an(e stan+a$+ SAP )o+e an+ a&'a!s
ma.e a )op! o# '"at !o% 'ant to )"an(e an+ %se t"e -e$son/ In t"s )ase,
!o% 'o%&+ "a-e to mo+#! one o# t"e t'o stan+a$+ )o+es/ Yo% "a-e to et"e$ mo+#!
t"e n)&%+e statement n t"e RHECMKPRINTKCRS )o+e to $emo-e NO46ISPLAY
n t"e se&e)ton pa$amete$ to a&&o' t"e se&e)ton s)$een to s"o' '"at #o$m t s
+e#a%&tn( an+ "a-e t"e %se$ se&e)t t"e $("t #o$m/ Anot"e$ opton s to )"an(e t"e
+e#a%&t #o$m #$om HRKECMKCRS to '"ate-e$ #o$m !o% )$eate+/
T"e se)on+ met"o+ s to not )"an(e t"e stan+a$+ p$o($am )o+e, *%t (o a"ea+ an+
mo+#! t"e HRKECMKCRS #o$m/ Ma.e a )op! o# t to to *e %se+ as *a).%p, *%t
%se t"e man HRKECMKCRS as *en( t"e man #o$m !o%1-e mo+#e+/
C
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INTRODUCTION TO THE COMPAN8
INDIAN OIL CORPORATION LIMITED
HHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHHH
HHHHHHHHHHHH
Incorporated in 1B6B, Indian il ;orporation imited i+ a
.holly -o*ernment?o.ned company regi+tered under the
;ompanie+ Act, 1B67 It came into e3i+tence on 1+tSeptember,
1B75 a+ a re+ult of amalgamation of the er+t.hile Indian
Renerie+ td, and Indian il ;ompany and ha+ it+ regi+tered
oJce at Mumbai
The ;orporation i+ managed by "oard of %irector+ appointed
by the
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;'RM .ho report+ to the re+pecti*e E%>-M
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ISION, MISSION : ALUES
i!i%n
A major di*er+ied, tran+national, integrated energy company, .ith
national leader+hip and a +trong en*ironment con+cience, playing a
national role in oil +ecurity/ public di+tribution
Mi!!i%n
To achie*e international +tandard+ of e3cellence in all a+pect+ of
energy and di*er+ied bu+ine++ .ith focu+ on cu+tomer
delight through *alue of product+ and +er*ice+, and co+t reduction
To ma3imi0e creation of .ealth, *alue and +ati+faction for the
+ta)eholder+
To attain leader+hip in de*eloping, adopting and a++imilating +tate?
of? the?art technology for competiti*e ad*antage
To pro*ide technology and +er*ice+ through +u+tained Re+earch and
%e*elopment
To fo+ter a culture of participation and inno*ation for employee
gro.th and contribution
To culti*ate high +tandard+ of bu+ine++ ethic+ and Total 4uality
Management for a +trong corporate identity and brand equity
To help enrich the quality of life of the community and pre+er*e
ecological balance and heritage through a +trong en*ironment
con+cience
a1(e!
;are
Inno*ation
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Tru+t
IndianOilPeople...
towards Excellence...
O'@*.,;* /+ .* 0//*< .9
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R**&0 M*./
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'e$e (-en on&ne %estonna$e #o$ t"e s%$-e! an+ #o$ t"e $est 'e$e )on+%)te+ an o$a&
nte$-e'/
S/*"R*8*;&-* /+ P0//*< S.9
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In"r%)($"i%n "% Oi1 C%m+anie! In
UAE
The oil and ga+ +ector pro*ide+ around a third of the #AEF+ -ro++
$ational
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The #AE play+ a *ital role in achie*ing +tability in international oil
mar)et+ through it+ po+iti*e and balanced attitude .ithin
5C
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petrochemical companie+ &!ERTI, "R#-E( A%$; al+o o.n+
and operate+ t.o renerie+ at #mm al?$ar and Ru.ai+, the ga+
treatment plant+ at 'ab+han, ga+ pipeline di+tribution net.or) and
the chlorine indu+trie+ at #mm al?$ar
ADNOC Re!"r($"(rin-
A%$; announced a major management re+tructuring plan in
$o*ember 1BB9 +hifting the rmF+ renery and ga+ operation+ to
t.o ne. .holly?o.ned +ub+idiarie+ and bringing the number of
+ub+idiarie+ up to 18 The t.o ne. A%$; companie+, Abu %habi
il Rening ;ompany &TALREER( and the Abu %habi -a+ ;ompany&AT'EER(, .ere formally e+tabli+hed on 1B Oune 1BBB Along .ith
the creation of renery and ga+ +ub+idiarie+ the company ha+ +et up
*e bu+ine++ line directorate+ &"%+( to carry out up+tream and
do.n +tream acti*itie+ Another three directorate+ .ill pro*ide
+upport +er*ice+ for *ariou+ operation+ The ne. management
+tructure al+o create+ an e3ecuti*e committee, chaired by a chief
e3ecuti*e oJcer, to o*er+ee the companyF+ bu+ine++e+
D%1+.in Pr%?e$"
The %olphin project .a+ launched in March 1BBB follo.ing an
announcement by the #AE and 4atar of plan+ for a joint *enture
aimed at tran+porting ga+ from 4atarF+ huge re+er*e+ to indu+trial
con+umer+ in the #AE, man and other countrie+ %olphin, .hich i+
being de*eloped under the au+pice+ of the #AE @+et -roup -(,i+ intended to pro*ide a frame.or) to +timulate in*e+tment in a
52
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*ariety of related indu+trie+ throughout the *alue?added ga+ chain
&!or more information +ee +ection on "u+ine++ En*ironment(
Economic foreca+ter+ predict that the #AEF+ demand for ga+ .ill
double o*er the ne3t decade
D(
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The +tate?o.ned %ubai $atural -a+ ;ompany &%#-AS( i+
re+pon+ible for proce++ing natural ga+ produced in %ubai+ o@+hore
oil eld+ a+ .ell a+ the ga+ piped from Sharjah
S.ar?a.
Sharjah o.n+ 6 percent of the #AEF+ ga+ re+er*e+, mo+tly non?
a++ociated ga+ .hich i+ being utili+ed dome+tically The emirate+
mo+t important ga+ depo+it+ are at the o@+hore Mubara) eld and
the on+hore Sajaa, Mo*e yeid and Lahaif eld+ -a+ re+er*e+ are
e+timated at 1C,CCC billion cubic meter+ and around 9CC mn cfd of
ga+ are produced Sharjah+ o@+hore Mubara) eld, operated by the
local ;re+cent
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Abu Shaghara in Sharjah mar)ing the beginning of
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Li!" % Oi1 an) Ga! C%m+anie! in
D(
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S"a"e C%m+anie!
Abu %habi $ational il ;ompany &A%$;( ha+ controlling intere+t in
21 dome+tic oil and natural ga+ companie+
@%in" en"(re!
Abu %habi ;o for n+hore il peration+ &A%;( i+ held by A%$;
&7C( and a con+ortium compri+ing "riti+h
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Pe"r%1e(m Cr()e Oi1 : /(e1 in UAE
A
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;ompany in %ubai engaged in rening and mar)eting of oil, +upply of jet
fuel and a*iation fuelling +er*ice+, manufacture of chemical+ and
lubricant+,
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9 G(1 Oi1#e1) Dire$"%r'
Annual publication of companie+ in the oil and ga+ indu+trie+ online
+earchable *er+ion a*ailable publi+hed by Arabian
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UThe +pectrum of ri+) that bu+ine++ leader+ face today i+ far more
comple3 than e*er before,V +aid "rian Storm+, chairman and ;E of
Mar+h U$ot too long ago, the top concern for an $; might ha*e
been a re at a renery "ut the +tudy .e conducted at the Mar+h$ational il ;ompanie+ ;onference in %ubai +ho.+ that ne.er ri+)+
Q +uch a+ the impact of climate change Q are mo*ing near the top of
the li+tV
In!(rer arn! %i1 $%m+anie! a
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climate change .ould pre+ent +ignicant ri+) #nder+tanding thi+
ri+) and prioriti0ing it+ potential impact allo.ed the client to ta)e
mea+ure+ to addre++ it
Storm+ al+o cited other potential ri+)+ faced by national oil
companie+, including terrori+t act+, the e@ect+ of a major natural
di+a+ter on production, the concentration of +upply chain+ Q
e+pecially due to the threat of a*ian Gu and other ri+)+
The .orld i+ beginning to become more concerned about climate
change It .ould be prudent for all energy producer+, not ju+t oil
companie+, to under+tand their footprint+ in the .orld, and thatthere .ill be more con+tituent group+ that .ill produce more
challenge+ than the pa+t
Pri$e O Oi1 Drain- T.e Line
a+t +ummer, .hen the price of oil .a+ bouncing o@ the re* limiter
and a gallon of regular .a+ putting N5?plu+ hole+ in our .allet+, .e.ondered if it .ould continue, and .hat .e .ould do if it did The
+lide in oil price+ ha+ been the be+t ne.+ that con+umer+ ha*e
gotten all year "ut .ill lo. fuel price+ continue=
Ou+t a fe. month+ after the near?N16C high, the price of a barrel of
crude oil plummeted 8C percent, to about N5C It turn+ out that thi+
up+ide ha+ more than a little do.n+ide, and it may mean bad ne.+
in the future a+t +ummerF+ high price+ .ere a re+ult of a comple3
+erie+ of e*ent+?a perfect +torm in*ol*ing +peculation in the oil
mar)et+, high demand for oil product+, the pea)ing or near?pea)ing
of production *olume+, the incipient nancial cri+i+, etc "ut at lea+t
.e no. ha*e a pretty good e3planation for .hat .ent on in the
price increa+e
6
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The problem i+ that no oil producer i+ ma)ing money at N5C per
barrel :eF*e heard e+timate+ that the brea)?e*en point i+ no. N7C
to N9C per barrel, +o producer+ are hurting :hy doe+nFt a producer
+imply +top producing if it lo+e+ money on e*ery barrel= Thatque+tion i+ an+.ered .hen you reali0e that mo+t of our oil no.
come+ from national entitie+ &Saudi Arabia, Kene0uela, Iran, etc(
rather than companie+ li)e E33on or Shell The+e countrie+ do
indeed .or) .ith companie+, but the ba+ic deci+ion+ there are
go*ernmental The+e go*ernment+ are dependent on oil re*enue for
infra+tructure, +ocial program+, military +pending and all the re+t
!or them, if re*enue +top+, the go*ernment +top+
The
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a rapid price increa+e li)e la+t +ummer, and tho+e )ind+ of price+
might hurt e*eryone by ma)ing the .orld.ide rece++ion .or+e
The N5C?per?barrel price i+ hurting oil companie+ and oil nation+
around the .orld Xou heard the mantra drill, drill, drill la+t
+ummer, but +omething li)e N1CC billion in ne. oil?indu+try project+
ha*e been cancelled +ince the fall in price+, and oil rig+,
infra+tructure and equipment are idle or not being maintained
Alternati*e energy project+ ha*e al+o ta)en a hit, a+ their .orth i+
compared to the price of oil, and if oil i+ cheap, .hy +ee)
alternati*e+=
Some of the mo+t negati*e *oice+ are coming from old hand+ in the
oil patch, and itF+ not ju+t becau+e of the current price The
indu+tryF+ infra+tructure i+ made predominantly of +teel, and many
of the rig+, platform+, pipeline+ and renerie+ that .ere ne. 5C or
6C year+ ago are ru+ting and not being rene.ed The indu+try al+o
ha+ depended on a generation of .or)er+ .ho are not only aging,
but are too often not being replaced
If demand for oil increa+e+ once again a+ economic reco*ery begin+,
.here .ill the nece++ary increa+e in +upply come from= Are .e, a+
many analy+t+ belie*e, at or beyond the all?time pea) of production=
il at N5C per barrel?and the nancial cri+i+?ha+ left u+ a .ea)er oil
indu+try And, ironically, a .ea)er alternati*e?energy indu+try, at a
time .hen .e need both to +tabili0e future energy re+ource+ If .e
+ee +eriou+ +hortage+, price+ .ill +pi)e etF+ hope itF+ not the
ma)ing of another perfect +torm
Ri!in- Oi1 Kee+! C%m+anie! %n T.eir
T%e!
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:e+t Te3a+ Intermediate crude for Ouly deli*ery bro)e the N8C thre+hold to
nearly N8 on the $e. Xor) Mercantile E3change, .hile benchmar) %ubai
crude, LoreaF+ main import, hit a ne. high for the r+t time +ince la+t
ctober
:hat doe+ all thi+ mean for companie+= An3iety and a ru+h of .orry #no
matter the indu+try
YYil price+ a@ect e*erything, from manufacturing and pac)aging to
tran+porting, no indu+try i+ in+ulated,FF +aid ee %al?+u), a +enior analy+t
at the Lorea Energy Economic+ In+titute, a +tate?run thin) tan)
Indian il ;orporation td in India
HHHHHHHHHHHHHHHHHHHHHHHH
HHHHHHH
Oil & Gas Industry in India
The origin of oil / ga+ indu+try in India can be traced bac) to 1978 .hen
oil .a+ +truc) at Ma)um near Margherita in A++am At the time of
Independence in 1B58, the il / -a+ indu+try .a+ controlled by
international companie+ IndiaF+ dome+tic oil production .a+ ju+t 26C,CCC
tonne+ per annum and the entire production .a+ from one +tate A++am
The foundation of the il / -a+ Indu+try in India .a+ laid by the Indu+trial
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go*ernment company .a+ +et up In 1B6B, for mar)eting of petroleum
product+, the go*ernment +et up another company called Indian Renerie+
td In 1B75, Indian Renerie+ td .a+ merged .ith Indian il ;ompany
td to form Indian il ;orporationtd
%uring 1B7C+, a number of oil and ga+?bearing +tructure+ .ere di+co*ered
by $-; in -ujarat and A++am %i+co*ery of oil in +ignicant quantitie+ in
"ombay 'igh in !ebruary, 1B85 opened up ne. a*enue+ of oil e3ploration
in o@+hore area+ %uring 1B8C+ and till mid 1B9C+ e3ploratory e@ort+ by
$-; and I India yielded di+co*erie+ of oil and ga+ in a number of
+tructure+ in "a++ein, Tapti, Lri+hna?-oda*ari?;au*ery ba+in+, ;achar
&A++am(, $agaland, and Tripura In 1B95?96, India achie*ed a +elf?
+uJciency le*el of 8C in petroleum product+
In 1B95, -a+ Authority of India td &-AI( .a+ +et up to loo) after
tran+portation, proce++ing and mar)eting of natural ga+ and natural ga+
liquid+ -AI ha+ been in+trumental in the laying of a 18CC )m?long ga+
pipeline &'"O pipeline( from 'a0ira in -ujarat to Oagdi+hpur in #ttar
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"y the end of 1B9C+, the petroleum +ector .a+ in the doldrum+ il
production had begun to decline .herea+ there .a+ a +teady increa+e in
con+umption and dome+tic oil production .a+ able to meet only about
6 of the dome+tic requirement The +ituation .a+ further compounded
by the re+ource crunch in early 1BBC+ The -o*ernment had no money for
the de*elopment of +ome of the then ne.ly di+co*ered eld+ &-andhar,
'eera
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Oi1 C%m+anie! In In)ia
3.ara" Pe"r%1e(m C%r+%ra"i%n Limi"e)
"harat
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Li!" % S(
Aban @+hore imited ? a leading name in o@+hore drilling +er*ice+
Aeromarine? o@+hore +upplier,+hip chandler,+hip repair+,dealer+ Z
e3porter+ of +hip +pare+ / aid+ to marine na*igation
Alfa
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Indiana -rating+
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conGuence of ri*er 'oogly and 'aldi !rom an original crude oil
proce++ing capacity of 26 MMT
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IOC +("! %n .%1) i"! Ha1)ia Re#ner'
P1an
Indian il ;orporation &I;(, the country+ large+t oil mar)eting company,
ha+ put on hold it+ plan to +et up a 16?million tonne renery at 'aldia due
to the economic do.nturn I; .a+ +uppo+ed to rope in an international
partner for the project
UThe project ha+ been put on hold becau+e of the nancial turmoil and no
progre++ ha+ been made,V +aid an I; e3ecuti*e
$o., it may be diJcult for I; to nd an international company for +uch a
large comple3, +aid an indu+try e3pert
I; and the :e+t "engal go*ernment .ere to jointly e3plore the po++ibility
of roping in an internationally?reputed multinational company a+ a partner
I; along .ith thi+ international partner .a+ +uppo+ed to carry out a
techno?economic fea+ibility +tudy for the project The +tudy ha+ not yetbeen conducted in the ab+ence of +uch a partner
In September 2CC7, I; had +igned a memorandum of agreement &MoA(
.ith the :e+t "engal go*ernment to de*elop 'aldia a+ a
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Analy+t+ +ay the economic do.nturn i+ not the only rea+on behind putting
+uch plan+ on hold Such deci+ion+ are al+o being inGuenced by the
increa+ing +urplu+ rening capacity in the country India ha+ +urplu+
rening capacity of nearly 56 million tonne+, .hich i+ +et to increa+e
further
IOC !"%+! !(++1ie! a! Ha1)ia C.e(e
3%(n$e!
The cri+i+ being faced by haldia petrochemical+ ltd deepened further .ith
indian oil deciding to +top naphtha +upplie+ after a r+ 21 crore cheque
i++ued by the former bounced on friday thi+ i+ the +econd time that
cheque+ to the oil major i++ued by the r+ 6,CC crore joint *enture
bet.een the .e+t bengal go*ernment, the tata+ and the purnendu
chatterjee group ha*e bounced +ome con+ignment+ are on .ay +o .e
canFt do anything about them but after that .e are +topping +upplie+ till
payment+ are cleared, a top ioc oJcial +aid the oJcial al+o e3pre++ed
unhappine++ o*er the po+t?dated cheque payment +y+tem in the
commercial pact .ith hpl t.o of hplF+ cheque+ i++ued to ioc for r+ 18
crore and r+ 2C9 crore had bounced la+t month +ub+equently, hpl
re*alidated them but reque+ted ioc to delay enca+hment +iting poor +ale+
hpl al+o ha+ a 7C?day breather for payment+ the company doe+nFt ha*e to
pay intere+t for the r+t C day+ hpl ha+ been facing problem+ for
+ometime no., .ith the tata+ +ee)ing an e3it the late+t incident may put
o@ ioc .hich ha+ +ho.n .illingne++ to ta)e up to 27 per cent equity
pro*ided it get+ the management control it al+o en*i+age+ re+tructuring
the e3i+ting equity +hare capital of the company and +ignicant reductionin the +ta)e+ of the e3i+ting promoter+ ioc ha+ al+o been .illing to
contribute fre+h equity +hare capital of r+ 579 crore to acquire a 27 per
cent +ta)e in hpl, propo+ed to be made at par
Para)i+Ha1)ia Cr()e Pi+e1ine "%
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After a delay of more than a year, Indian il ;orporation &I;( i+
no. poi+ed to complete the
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to complete the project in ne3t t.o month+, a +enior company
oJcial +aid
Subsurface pipeline
Mean.hile, I; +ource+ +aid
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integral part of these , projects1 the source said.
The first of the projects was a small 5angalore AT: line pipeline which was
commissioned in $ctober (''). The second was Indian$il8s first 9-> pipeline
from -anipat to ?alandhar Spanning (+< km it was commissioned in
@ovember. The third is the -anipat aldia pipeline.
Indian il To -ain !rom 'aldia?
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UThe ne. pipeline .ill be the lifeline for I;, a+ 'aldia and "arauni
renerie+ are incurring huge lo++e+ becau+e of the additional co+t of
tran+porting crude through 'aldia port .here larger *e++el+ cannot
call in,V Mr Ramachandran +aid
I; .ill +et up a +ingle?buoy mooring &S"M( facility o@ the
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GU@ARAT
Introduction To Gujarat !e"nery
More than 26 year+ ago, the -o*ernment of -ujarat concei*ed of the
formation of a petrochemical company, that ha+ today metamorpho+ed
into a large?+cale R+ BCC crore energy organi0ation, e3celling in a .ide
gamut of hydrocarbon acti*itie+ $ot.ith+tanding it+ limited role and the
lo. )ey infra+tructure, the organi0ation dre. in+piration from the e3citing
opportunitie+ that the hydrocarbon +ector o@ered in the .a)e of
liberali0ation of Indian economy It gradually began to e3pand it+ *i+ion,
.idened the +cope of it+ acti*itie+ and rechri+tened it+elf a+ -ujarat State
-S
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In)ian Oi1 C%r+%ra"i%n L") in N%r". Ea!"Re-i%n
=G(a.a"i Re#ner'>
PRO/ILE O/ GUWAHATI RE/INER8=ASSAM>
The -u.ahati Renery in $orth Ea+t India ?? the r+t
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on.ard to Siliguri in :e+t "engal in 2CC 'ydrotreater
#nit for impro*ing the quality of die+el ha+ been
commi++ioned in 2CC2 In 2CC, the renery in+talled an
In)max Uni", a no*el technology de*eloped by Indian
oil+ R/% ;entre for upgrading hea*y end+ into
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2
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/(n$"i%n! % SHRM They ha*e to loo) after employee relation+
.hich include+ loo)ing after facilitie+ li)e medical facilitie+, .age+,
incenti*e+ that are being pro*ided to the employee+ or not They
mainly direct their %eputy Manager+ to loo) after the+e a+pect+S'RM i+ al+o in charge of loo)ing after the contract labor related
i++ue+ They do thi+ by gi*ing appro*al to the entry and e3it of
contract labor during the contract period after the initial *erication
i+ done by employee relation+ oJcer
The S'RM al+o ha+ to loo) after *ariou+ legal acti*itie+ li)e land and
e+tate matter+ a+ and .hen ari+e S'RM loo)+ after the time oJce
matter+ li)e entry and e3it of employee+ and al+o a *ery important
function that i+ .age admini+tration
/(n$"i%n! % De+("' Mana-er! They perform the function+ of
appro*ing land and e+tate matter+, and then de*elopment of
+urrounding community, loo)+ into the matter+ of certain
educational underta)ing+ nanced by -u.ahati renery, for.ard+
the reque+t+ for loan+ and ad*ance+ by employee+ to the nance
department They +crutini0e the report+ of +enior admini+trati*e
oJcial+ regarding *ariou+ matter+ They al+o monitor employee
performance+ and identify ca+e+ .here training i+ required The
maintenance of admini+trati*e building li)e loo)ing after .ater
lter+, chair+, computer+, table+ etc i+ al+o one of the function+ of
deputy manager
/(n$"i%n! % Seni%r A)mini!"ra"i&e %$er =SAO> They loo)
into the matter+ of land, carry out time to time in+pection of the
land+ acquired by Renery, they loo) into the matter+ of community
de*elopment, genuinene++ of their requirement+ and fund
allocation, they perform the function of +taJng employee+ by
placing them in tho+e job+ in accordance to their +)ill +et They loo)
86
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after the .age admini+tration and they are re+pon+ible for
formulating the .age+ to be allocated They al+o ha*e to loo) after
medical benet+, promotion, probation and recruitment and
performance apprai+al+
/(n$"i%n! % Em+1%'ee Re1a"i%n! O$er =ERO> They )eep
trac) of contract labourer+ right from their entry pa++e+ to their
day+ of .or), payment and pro*ident fund+ They perform the
function of appro*ing loan and ad*ance+ and for.arding them to the
nance dept They al+o ha*e to )eep a trac) of uniform and +afety
+hoe+ +upplied to employee+ .or)ing in the plant ;anteen and
pantry i+ al+o ta)en care of by the employee relation+ oJcer
%E
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JJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJJ
JJJJJJJJJJJJ
ST#$$I%G
o Manpo.er planning
o %etermine the organi0ational +tructure and optimi0e
manpo.er to e@ecti*ely meet ;ompany+ objecti*e
o Oob de+cription
o Recruitment
o
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o Induction and apprentice training
o Training / de*elopment of employee+
I%()ST!I# !E#TIO%S
o
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DATA INTERPRETATION AND ANAL8SIS
>< Fo$ "o' man! !ea$s "a-e !o% *een 'o$.n( n t"s o$(an3aton
Analy+i+ It .a+ analy+ed that ma3imum of the employee+
year+ of +er*ice i+ in bet.een 1C year+ to 2C year+
@< W"at s !o%$ ($a+e n t"s o$(an3aton
a< A ; < ;*< 8 ; < ; )< C ; < ;+< 6 ; < ;e< E ; ; < ;*< @; < ;)< D ; < ; +< = ; < ;e< ;