Compensation Managemnt

8/2/2019 Compensation Managemnt

http://slidepdf.com/reader/full/compensation-managemnt 1/11

COMPENSATION MANAGEMENT



Introduction

Human Resource is the most vital resource for anyorganization.

It is responsible for each and every decision taken,each and every work done and each and everyresult.

Employees should be managed properly and

motivated by providing best remuneration andcompensation as per the industry standards.

The good compensation will also serve the need forattracting and retaining the best employees. .



Compensation

Compensation is the remuneration received by anemployee in return for his/her contribution to theorganization.

It is an organized practice that involves balancingthe work-employee relation by providing monetary

and non-monetary benefits to employees



Contd….

When managed correctly, it helps the organization achieveits objectives and obtain, maintain, and retain a productiveworkforce.

Compensation is a key factor in attracting and keeping thebest employees and ensuring that your organization hasthe competitive edge in an increasingly competitive world.

Without adequate compensation, current employees arelikely to leave and replacements will be difficult to recruit.

The outcomes of pay dissatisfaction harm productivity andaffect the quality of work life.



Compensation Management

Compensation management is an integral part ofhuman resource management which helps inmotivating the employees and improvingorganizational effectiveness.

The Compensation Management componentenables you to differentiate between yourremuneration strategies and those of your competitors

while still allowing flexibility, control and costeffectiveness.

It provides a toolset for strategic remuneration

planning that reflects your organization culture andpay strategies.



Need of Compensation Management

A good compensation package is important to motivate theemployees to increase the organizational productivity.

Unless compensation is provided no one will come andwork for the organization. Thus, compensation helps in

running an organization effectively and accomplishing itsgoals.

Salary is just a part of the compensation system, theemployees have other psychological and self-actualizationneeds to fulfill. Thus, compensation serves the purpose.

The most competitive compensation will help theorganization to attract and sustain the best talent. Thecompensation package should be as per industrystandards



Objective Of Compensation Management



Contd… To help the organization achieve strategic success

while ensuring internal and external equity.

Internal equity- ensures that more demandingpositions or better qualified people within theorganization are paid more.

External equity - assures that jobs are fairlycompensated in comparison with similar jobs in otherfirms

Attract qualified personnel

Retain current employees

Reward desired behaviour

Control costs

Facilitate understanding



DETERMINING COMPENSATION

Internal Factors:

Employers Compensation strategy

Worth of a Job

Employees Relative WorthEmployers Ability to Pay



Contd……

External Factors:

Labor Market Conditions

Area Wage Rates

Cost of Living



Governmental Wage Policy of India

Payment of Wages Act, 1936

Industrial Dispute Act, 1947

Minimum Wages Act, 1948

Equal remuneration Act, 1976 Payment of Bonus Act, 1965

Wage Board

Compensation Managemnt

Documents

Transcript of Compensation Managemnt