UNIT 4 Compensation Strategies and Practices

UNIT – 4

Compensation Strategies and

Practices

12–1

12–2

Compensation Systems

Objectives of an Effective Compensation System:

– Legal compliance with all appropriate laws and regulations

– Cost effectiveness for the organization

– Internal, external, and individual equity for employees

– Performance enhancement for the organization

12–3

Nature of Compensation

Types of Rewards

– Intrinsic

• Intangible, psychological and social effects of

compensation

– Extrinsic

• Tangible, monetary and nonmonetary effects of

compensation

12–4

Components of A Compensation Program

Figure 12–1

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Direct Compensation

Compensation Type

Base Pay The basic monetary compensation that an employee receives, usually as a wage or salary.

Wages Payments calculated on the amount of time worked.

Salary Consistent payments made each period regardless of the number of hours worked in the period.

Variable Pay Compensation linked to individual, team, or organizational performance.

Benefit An indirect reward given to an employee or group of employees as a part of organizational membership.

Copyright ©2012 by Cengage Learning. All rights reserved. 9- 6

Pay Surveys

Pay Surveys are surveys of compensation paid to employees by other employers in a particular geographic area, industry, or occupational group.


Wages Versus Salaries

Wages generally refer to hourly compensation paid to operating employees. The basis for wages is time.

Salary is income paid to an individual on the basis of time.

A maturity curve is a schedule specifying the amount of annual increases a person will receive.


Determining What to Pay

Job evaluation is a method for determining the relative value or worth of a job to the organization so that individuals who perform that job can be compensated adequately and appropriately.

Classification system attempts to group sets of jobs together into clusters, which are often called grades.

The point system requires managers to qualify, in objective terms, the value of the various elements of specific jobs.


Pay-for-Knowledge and Skill-Based

Pay

Pay-for-knowledgeinvolves compensating employees for learning specific information.

Skill-based pay rewards employees for acquiring new skills.


Wage and Salary Administration

Wage and salary administration is the ongoing process of managing a wage and salary structure.

All managers must be sensitive to these costs and must be vigilant about managing them properly.


Pay Secrecy

Pay secrecy refers to the extent to which the compensation of any individual in an organization is secret or the extent to which it is formally made available to other individuals.


Pay Compression and Pay Inversion

Pay compression occurs when individuals with substantially different levels of experience and/or performance abilities are being paid wages or salaries that are relatively equal.

Pay inversion occurs when the external market changes so rapidly that the new employees are actually paid more than experienced employees.


Mandated Benefits

Unemployment Insurance is a mandated protection plan that provides a basic substance payment to employees who are between jobs.

Social Security provides limited income to retired individuals.

Workers’ Compensation is insurance that covers individuals who suffer a job-related illness or accident.


Non-mandated Benefits

Private Pension Plans are administered by the organization and provide income to the employees at their retirement.

Defined benefit plans: a private pension plan where the benefit is precisely known based on a simple formula such as years of service.Defined contribution plans: a private pension plan in which the size of the benefit depends on how much money is contributed to the plan.


Additional Benefits

Wellness programsconcentrate on keeping employees from becoming sick rather than simply paying expenses when they do become ill.

Child care programsassist parents with child care expenses.

Cafeteria-style benefitsallow employees to choose the benefits they really want.


Executive Compensation

Most senior executives receive their compensation in 2 forms: 1. base salary

2. a form of incentive pay (usually a bonus which is based on company performance)

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Typical Division of HR Responsibilities:

Compensation

Figure 12–2

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Compensation Approaches

Figure 12–4

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Compensation Quartile Strategies

Figure 12–5

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Decisions About Compensation Levels

Compensation Strategies

Above-Market Paying for higher qualified, more productive workers.

Middle-Market Attempting to balance of employer costs and need to attract and retain employees.

Below-Market Paying all that the firm can afford Taking advantage of the abundant supply of potential employees in a loose labor market.

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Competency-Based Pay

Maintenance ofCompetencies

Limitations(How many?)

PricingCompetencies

Training

Competency-Based Pay SystemsKBP/SBP

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Competency-Based Systems Outcomes

Figure 12–6

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Individual vs. Team Rewards

Distribute variable rewards at the team level

Make system simple and understandable.

Using Team-Based Reward Systems

Use skill-based pay for the base.

Use variable pay based on business entity performance

Maintain a high degree of employee involvement

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Fair Labor Standards Act (FSLA) of 1938

Provisions of the Act

Minimum wage requirement sets wage floor

Child labor (under 14 years old) is prohibited

Requires overtime payments for non-exempt employees

Exempts highly-paid computer workers

Requires overtime (1½) pay for hours over 40 hours

Requires compensatory time at overtime (1½) pay rates

12–25

Other Laws Affecting Compensation

Davis-Bacon Act of 1931

– Required payment of “prevailing wage” by firmsengaged in federal construction projects.

Walsh-Healy Public Contracts Act and theService Contracts Act

– Extended the payment of “prevailing wage” toservice contracts

– Required overtime payment for any employee hoursworked over eight hours in one day; applies only toto federal contracts, not the private sector.

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Pay and Gender

Equal Pay Act of 1963

– Requires that men and women be paid the same for performing substantially similar jobs with limited non-gender exceptions (e.g., merit and seniority).

Issue of Pay Equity

– Similarity in pay for all jobs requiring comparable level of knowledge, skills, and abilities, even if actual duties and market rates differ significantly.

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Compensation

Administration

Process

Figure 12–10

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Job Evaluation

Job Evaluation

– The systematic determination of the relative worthof jobs within an organization.

Benchmark Job

– A job found in many organizations and performedby several individuals who have similar duties thatare relatively stable and require similar KSAs.

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Job Evaluation

FactorComparison

Ranking Classification

PointMethod

Job Evaluation Methods

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Job Evaluation Point Chart

Figure 12–11

12–31

Developing Pay Surveys

Select Employers with Comparable Jobs

Determine Jobs to be Surveyed

Decide What Information Is Needed

Conduct Survey

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Pay Structures

Market Line

– The line on a graph showing the relationship between the job value, as determined by job evaluation points, and pay survey rates.

Common Pay Structures

– Hourly and salaried

– Office, plant, technical, professional, managerial

– Clerical, information technology, professional, supervisory, management, and executive

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Pay Rate Issues

Rates Out of Range

– Red-Circled Employees

• An incumbent (current jobholder) who is paid above

the range set for the job.

– Green-Circled Employees

• An incumbent who is paid below the range set for the

job.

Pay Compression

– A situation in which pay differences amongindividuals with different levels of experience andperformance in the organization becomes small.

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Issues Involving Pay Increases

Seniority

– Time spent in an organization or on a particular job.

– Used to determine eligibility for organizationalrewards and benefits.

Maturity Curve

– A curve that depicts the relationship betweenexperience and pay rates.

– Assumption is that as experience increases,proficiency and performance increase.

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Issues Involving Pay Increases

Cost-of-Living Adjustments (COLA)

– A percentage increase in wages that allowsemployees to maintain the same real wages in aperiod of economic inflation.

– Adjustments are tied to changes in an economicmeasure (e.g., the Consumer Price Index).

Lump-Sum Increases (LSI)

– A one-time payment of all or part of a yearly payincrease.

– Lump-sum payments do not increase base wages

Concept of Employee Welfare

Welfare Measures

Types of Employee Welfare Responsibility

The Business Benefits of Employee Welfare Activities

Employee Welfare and Working

Conditions

According to Royal Commission on Labour:

“the term welfare as applied to industrial

workers is one which must be necessarily elastic,

bearing a somewhat different interpretation in

one country from another, according to the

different social customs, the degree of

industrialization and the educational

development of workers”

WORKMEN’S COMPENSATION ACT, 1923

INTRODUCTION

This is one of the early legislations

This is one of Social Security legislations providing for times when a person is not working

This is a fantastic piece of legislation, till then burden of proof for claim of compensation lay with the workman, this Act reversed the position, now the employer is to prove if he denies claim

DEFINITIONS

COMPENSATION- means as provided for by this Act

DEPENDANT-

(i) widow, minor legitimate or adopted son, unmarried legitimate or adopted daughter and widowed mother

(ii) if wholly dependant on the earnings of the workman at the time of death, son or daughter who has attained the age of 18 years and who is infirm

(iii) if wholly or in part dependant on the earnings of the workman at the time of death,

(a) widower

(b) parent other than widowed mother et al

EMPLOYER

PARTIAL DISABLEMENT- means

where the disablement is of temporary nature, such disablement as reduces the earning capacity of a workman in the employment he was engaged at the time of accident resulting in the disablement, and

where the disablement is of permanent nature, such disablement as reduces the earning capacity in every employment which he was capable of undertaking at that time provided that every injury specified in Part II of Schedule I is deemed to result in permanent partial disablement

TOTAL DISABLEMENT- means

such disablement, whether of a temporary or permanent nature, as incapacitates a workman for all work which he was capable of performing at the time of accident resulting in such disablement

provided that permanent total disablement is to be deemed to result from every injury in Part I of Schedule I or combination of injuries specified in Part II where the aggregate percentage of loss of earning capacity amounts to one hundred percent or more

WORKMAN- means any person who is

(i) railway servant not permanently employed in any office and not employed in any capacity as is specified in Schedule II

(ii) crew of a ship, aircraft, motor vehicle, a person recruited for work abroad by a company and employed in capacity specified in Schedule II and it is registered in India, or

(iii) employed in any capacity specified in Schedule II

N.B. if workman has died, his dependant(s)

WORKMEN’S COMPENSATION

Section 3(1)- Employers liability for compensation

If personal injury is caused to a workman by accident arising out of and in the course of employment, his employer shall be liable to pay compensation in accordance with the provisions of this Chapter

Provided the employer shall not be so liable

(a) if injury does not result in total or partial disablement for a period not exceeding three days

(b) if injury, not resulting in death or permanent total disablement, caused by accident directly attributable to

(i) workman having been at that time under the influence of drink or drugs, or

(ii) wilful disobedience of the workman to order expressly given or rule expressly framed for securing safety of workmen

(iii) wilful removal or disregard by the workman of safety guard provided to him

(2) If a workman employed in any employment specified in Part A of Schedule III contracts any disease specified therein as occupational disease peculiar to that employment, or

whilst in service of an employer for a continuous period of not less than six months under him in any employment specified in Part B of Schedule III, or

whilst in service of one or more employers for a continuous period as Central Government may specify in any employment specified in Part C of Schedule III

contracts any disease specified therein as occupational disease peculiar to that employment,

the contracting of the disease is to be deemed to be an injury by accident, unless contrary is proved, arisen out of and in the course of employment

provided that if it is proved that the workman contracted the occupational disease in any employment in Part C within the specified period and the disease has arisen out of and in the course of employment

provided further that if it is proved that the workman having served in any employment in Part B or part C for a continuous period specified therein contracted the occupational disease after the cessation of service and the disease has arisen out of and in the course of employment

the contracting of the disease is to be deemed to be an injury by accident within the meaning of this section

(2A) If workman employed in any employment specified in Part C under more than one employer, all the employers are to be liable to pay compensation in such proportion as the Commissioner may deem just

(3) Central Government may add to Schedule

(4) Except as provided in (2), (2A) and (3) above no compensation is payable unless disease is directly attributable to a specific injury

(5) No compensation is payable under this Act if workman has gone to Civil Court and no suit is maintainable in any court of law if he has claimed compensation before a Commissioner or if he and his employer have agreed for compensation under this Act

Section 4- Amount of compensation

(a) where death results- 50% of monthly wages x relevant factor or Rs 80000 whichever is more

(b) where permanent total disablement results- 60% of monthly wages x relevant factor or Rs 90000 whichever is more

- For relevant factor Sch 4 is to be referred

- If monthly wages > Rs 4000, Rs 4000

(c) where permanent partial disablement results- if injury specified in Part II of Sch I compensation for permanent total disablement x % loss of earning capacity

- if injury not specified in Sch I compensation for permanent total disablement x % loss of earning capacity as assessed by qualified medical practitioner

- Aggregate of compensation not to exceed compensation for permanent total disablement

- loss of earning capacity is to be correctly assessed

(d) Where temporary disablement results from injury- half monthly payment of sum equivalent to twenty five per cent of monthly wages, to be paid in accordance to Section (2) i.e.

Half monthly payment is to be payable on the sixteenth day

(i) from date of disablement where disablement lasts for a period of twenty eight days or more, or

(ii) after the expiry of waiting period of three days,

from date of disablement where disablement lasts for a period of less than twenty eight days; and thereafter half monthly during the disablement or during a period of five years whichever period is shorter

provided from lump sum or half monthly payments, payment and allowance received during period of disablement prior to receiving lump sum or first half monthly payment is to be deducted, and half monthly payment is not to exceed difference of half of monthly payment before accident and half of monthly payment after accident

(3) On ceasing of disablement before the date half monthly payment falls due, proportional payment is to be paid for that half month

(4) If injury results in death, employer is to, in addition to compensation, deposit with the Commissioner Rupees two thousand five hundred towards the expenditure of the funeral of the workman

Section 4A(1)- Compensation is to be paid as soon as it is due

(2) Employer is to be bound to make payment based on the extent of liability he accepts depositing it with Commissioner or making it to workman

(3) Where employer is in default in paying compensation within one month from date due the Commissioner is

(i) direct the employer to pay in addition to arrears simple interest at rate of 12% p.a. and

(ii) penalty not exceeding 50%

Section 5- Monthly wages

(a) If workman was in service for past 12 months - 1/12th of total wages

(b) If workman was in service for less than a month – average monthly wages of workman doing same work under the same employer

(c) Average daily wages x 30

Section 6(1)- Review- Half monthly payment, either under agreement or order, may be reviewed by Commissioner, on application by employer or workman accompanied by certificate by qualified medical practitioner that there has been change in the condition of workman or subject to rules if not accompanied by certificate

(2) Half monthly payment, on review, may be continued, increased, decreased or ended or if accident has been found to have resulted in permanent disablement, be converted to lump sum less amount already received

Section 7- Commutation of half monthly payment may, by agreement or if half monthly payments have been continued for not less than six months on application by either party to the Commissioner, be redeemed by lump sum agreed by them

Section 8- Distribution of compensation-Compensation for injury resulting in death and compensation payable to a woman or a person under a legal disability is necessarily to be deposited with the Commissioner

Section 9- Compensation not to be assigned, attached or charged

Section 10(1)- Notice and claim- No claim for compensation is to be entertained by the Commissioner unless notice of accident is given in manner provided within two years of accident or death

Two years is to be counted from the first day as follows

- If accident is contracting of occupational disease, the first day of continuous absence of the workman because of it

- In the event of partial disablement, the first day he gives notice

- Want of, defect or irregularity in giving notice does not bar the claim

Section 10A- Power to require from the employer statements regarding fatal accidents – The Commissioner is to require statement from the employer within thirty days

Section 10B- Report of fatal accidents and serious bodily injuries - within seven days

Section 11- Medical examination - If notice of accident has been given and employer has arranged free medical examination within three days, workman is to submit for it. Workman receiving half monthly payment, if required is to submit. If workman refuses, his right to compensation is suspended

Section 12- The Principal Employer is to pay compensation in contract

Section 14A- Compensation is to be first charge on assets transferred by employer

Section 16- Returns as to compensation

Section 19(1)- Reference to Commissioners-Questions of liability, whether a person is workman, amount and duration of compensation, nature and extent of disablement are to be decided by commissioner

(2) No Civil court has jurisdiction on these matters

Section 20- Appointment of Commissioners

Section 21- Venue of proceedings and transfer- Any matter under this Act is to be done by and before the Commissioner for the area in which

(a) accident took place resulting in injury, or

(b) workman or dependant resides, or

(c) employer has registered office

provided no matter is to be processed before any other Commissioner without giving notice to Commissioner of the area in which accident took place

(1A) If Commissioner, other than Commissioner with whom money has been deposited, proceeds with the matter he is to call for transfer of records and moneys

(2) Commissioner, for more convenience in dealing, may transfer matter to any other commissioner provided parties agree

Section 22(1)- Form of application

Claim of compensation is to be made before Commissioner

(2) No application, other than made by dependant(s), is to be made before Commissioner unless and until question has arisen between parties in connection therewith which they have been unable to settle by agreement

(3) Application is to be accompanied by fee and is to contain, in addition to particulars prescribed

(a) Concise statement of circumstances, relief and order applicant claims

(b) Date of service of notice, and if not served, the reasons

(c) Names and addresses of the parties

(d) Except in the case application is of dependant, concise statement of matters on which agreement has and those on which agreement has not been come to

(3) If applicant is illiterate or unable to furnish required information in writing, application, if he desires, is to be prepared under direction of Commissioner

Section 22A(1)- Power of Commissioner to require further deposit in cases of fatal accident- Commissioner may by notice stating his reasons call upon employer to show cause why he should not make deposit

(2) If employer fails to show cause to his satisfaction he may make award determining total amount payable requiring him to deposit

Sections 23-31 Powers and procedures of Commissioners- Commissioner is to have all powers of Civil Court following its prcedures

Sections 32-35- Rules

Minimum Wages Act 1948

History of Minimum Wages

ILO Convention no26 in1928

Recommended Machinery for Fixation of minimum wages

•The Standing Labour Committee

Of Tripartite organization(ILC)Discussed in1943

•On 13.04.1946 Dr. Ambedkar introduced minimum wages bill.

•On 15.03.1948 the Minimum Wages

Act, 1948 passed.

OBJECTIVES To prevent the exploitation of Workers by

the Employers

(By fixing the statutory obligation

on the employer to pay the minimum wages).

To bring the social justice.

To enable the working class to have a

minimum standard of life.

Contd…

To fix/revise the minimum rate of wages for

the scheduled employments.

To add any new employment to the

schedule.

Fixing of minimum rates of wages

The appropriate Government shall, in the manner hereinafter provided,-

(a) fix the minimum rates of wages payable to employees employed in an employment specified in

(b) The appropriate Government may, in respect of employees employed in an employment specified in Part II of the Schedule, instead of fixing minimum rates of wages under this clause for the whole State, fix such rates for a part of the State or for any specified class or classes of such employment in the whole State

Review at such intervals as it may think fit, such intervals not exceeding five years, the minimum rates of wages so fixed and revise the minimum rates, if necessary

For any reason the appropriate Government has not reviewed the minimum rates of wages fixed by it in respect of any scheduled employment within any interval of five years, nothing contained in this clause shall be deemed to prevent it from reviewing the minimum rates after the expiry of the said period of five years and revising them, if necessary, and until they are so revised the minimum rates in force immediately before the expiry of the said period of five years shall continue in force.

The appropriate Government may fix, -

(a) a minimum rate of wages for time work (hereinafter referred to as "a minimum time rate");

(a) a minimum rate of wages for piece work (hereinafter referred to as "a minimum piece rate");

(c) a minimum rate of remuneration to apply in the case of employees employed on piece work for the purpose of securing to such employees a minimum rate of wages on a time work basis (hereinafter referred to as "a guaranteed time rate");

(d) a minimum rate (whether a time rate or a piece rate) to apply in substitution for the minimum rate which would otherwise be applicable, in respect of overtime work done by employees (hereinafter referred to as "overtime rate").

In fixing or revising minimum rates of wages under this section, -

(a) different minimum rates of wages may be fixed for-

(i) different scheduled employments;(ii) different classes of work in the same scheduled employment;(iii) adults, adolescents, children and apprentices;(iv) different localities;

(b) minimum rates of wages may be fixed by any one or more of the following wage periods, namely:-

(i) by the hour, (ii) by the day,(iii) by the month, or(iv) by such other larger wage period as may be prescribed; and

where such rates are fixed by the day or by the month ' the manner of calculating wages for a month or for a day, as the case may be, may be indicated:]

Procedure for fixing and revising minimum

wages

(1) In fixing minimum rates of wages in respect of any scheduled employment for the first time under this Act or in revising minimum rates of wages so fixed, the appropriate Government shall either-

(a) appoint as many committees and sub-committees as it considers necessary to hold enquiries and advise it in respect of such fixation or revision, as the case may be, or

(b) by notification in the Official Gazette, publish its proposals for the information of persons likely to be affected thereby and specify a date, not less than two months from the date of the notification, on which the proposals will be taken into consideration.

After considering the advice of the committee or committees appointed or as the case may be, all representations received by it before the date 'Specified in the notification ,the appropriate Government shall, by notification in the Official Gazette, fix, or, as the case may be, revise the minimum rates of wages in respect of each schedule employment, and unless such notification otherwise provides, it shall come into force on the expiry of three months from the date of its issue

Advisory Board

For the purpose of co-ordinating the work of [committees and sub committees appointed] and advising the appropriate Government generally in the matter of fixing and revising minimum rates of wages, the appropriate Government shall appoint an Advisory Board.

Central Advisory Board

(1) For the purpose of advising the Central and State Governments in the matters of the fixation and revision of minimum rates of wages and other matters under this Act and for co-ordinating the work of the Advisory Boards, the Central Government shall appoint a Central Advisory Board.

(2) The Central Advisory Board shall consist of persons to be nominated by the Central Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be appointed the Chairman of the Board by the Central Government.

Composition of committees, etc

Each of the committees, sub-committees and the Advisory Board shall consist of persons to be nominated by the appropriate Government representing employers and employees in the scheduled employments, who shall be equal in number, and independent persons not exceeding one-third of its total number of members; one of such independent persons shall be appointed the Chairman by the appropriate Government.

Inspectors

(1) The appropriate Government may, by notification in the Official Gazette, appoint such persons as it thinks fit to be Inspector for the purposes of this Act, and define the local limits within which they shall exercise their functions.

(2) Subject to any rules made in this behalf, an Inspector may, within the local limits for which he is appointed –

(a) enter, at all reasonable hours, with such assistants (if any), being persons in the service of the Government or any local or other public authority, as he thinks fit, any premises or place where employees are employed or work is given out to out-workers in any scheduled employment in respect of which minimum rates of wages have been fixed under this Act, for the purpose of examining any register, record of wages or notices required to be kept or exhibited by or under this Act or rules made there under, and require the production thereof for inspection;

(b) examine any person whom he finds in any such premises or place and who, he has reasonable cause to believe, is an employee employed therein or an employee t6 whom work is given out therein;

(c) require any person giving out-work and any out-workers, to give any information, which is in his power to give, with respect to the names and addresses of the persons to, for and from whom the work is given out or received, and with respect to the payments to be made for the work;

(d) seize or take copies of such register, record of wages or notices or portions thereof as he may consider relevant in respect of an offence under this Act which he has reason to believe has been committed by an employer; and

(e) exercise such other powers as may be prescribed.

(3) Every Inspector shall be deemed to be a public servant with

in the meaning of the Indian Penal Code

(4)Any person required to produce any document or thing or to give any information by an inspector shall be deemed to be legally bound to do so under the section of Indian Penal Code.

Claims

(1) The appropriate Government may, by notification in the Official Gazette, appoint any Commissioner for Workmen's Compensation or any officer of the Central Government exercising functions as a Labour Commissioner for any region, or any officer of the State Government not below the rank of Labour Commissioner or any] other officer with experience as a Judge of a Civil Court or as a stipend any Magistrate to be the Authority to hear and decide for any specified area all claims arising out of payment of less than the minimum rates of wages to employees employed or paid in that area.

(2) Where an employee has any claim by himself, or any legal practitioner or any official of a registered trade union authorized in writing to act on his behalf, or any Inspector, or any person acting with the permission of the Authority appointed as mentioned above

(i) in the case of a claim arising out of payment of less than the minimum rates of wages, the payment to the employee of the amount by which the minimum wages payable to him exceed the amount actually paid, together with the payment of such compensation as the Authority may think fit, not exceeding ten times the amount of such excess;

(ii) in any other case, the payment of the amount due to the employee, together with the payment of such compensation as the Authority may think fit, not exceeding ten rupees and the Authority may direct payment of such compensation in cases where the excess or the amount due is paid by the employer to the employee before the disposal of the application.

(5)Any amount directed to be paid under this section may be recovered

(a) if the Authority is a Magistrate, by the Authority as if it were a fine imposed by the Authority as a Magistrate, or

(b) if the Authority is not a Magistrate, by any Magistrate to whom the Authority makes application in this behalf, as if it were a fine imposed by such Magistrate.

(6) Every direction of the Authority under this section shall be final.

Penalties for certain offences

Any employer who-

(a) pays to any employee less than the minimum rates of wages fixed for that employee's class of work, or less than the amount due to him under the provisions of this Act, or

(b) contravenes any rule or order regards to this act, shall be punishable with 'Imprisonment for a term which may extend to six months, or with fine which may extend to five hundred rupees, or with both: Provided that in imposing any fine for an offence under this section, the Court shall take into consideration the amount of any compensation already awarded against the accused in any proceedings taken under this Section.

UNIT 4 Compensation Strategies and Practices

Documents

Transcript of UNIT 4 Compensation Strategies and Practices