COMPENSATION
PRESENTED BY –
GROUP 5
COMPENSATION -
Value of Job
Contribution & Performance
Monetary & Non Monetary Rewards
Objective of Compensation• To acquire qualified competent
personnel
• To retain the present employees
• To secure internal and external equity• • To ensured desired behavior
Fixed
Variable
Deduction
BASIC + HRA +Travelling allowance +Medical Reimbursement+ DA
Fringe Benefits , Perks , Incentives
Provident Fund + Professional Tax
Compensation
WHAT TO PAY ??????JOB EVALUATION
DIVIDING IN GRADES
PAY FOR KNOWLEDGE
SKILL BASED PAY
Broad banding
Factors Aff ecti ng compensati on
Remuneration in comparable industries
Firm’s ability to pay
Productivity Union Pressure
Cost of living
Government Legislation
SOME PEOPLE PERFORM BETTER AND ARE MORE PRODUCTIVE THAN OTHERS
BETTER PERFORMING EMPLOYEES SHOULD RECEIVE MORE COMPENSATION
PART OF COMPENSATION SHOULD BE TIED DIRECTLY TO PERFORMANCE AND RESULTS
SOME JOBS CONTRIBUTE MORE TO ORGANIZATIONAL SUCCESS THAN OTHERS
NEED OF VARIABLE PAY
Individual
GROUP
Oraganizational
9
INDIVIDUAL PERFORMANCE MUST BE IDENTIFIED
INDIVIDUAL COMPETITIVENESS MUST BE DESIRED
INDIVIDUALISM MUST BE STRESSED IN THE ORGANIZATIONAL STRUCTURE
Necessary Conditions For Individual Incentive Plans
Individual Incentives
Types-
Halsey Premium Plan , Rowan Plan , Straight Piece Rate , Differential Piece Rate System , Taylor’s Piece Rate Plan , Merric’s Piece Rate Plan
Conditions for Successful Group/Team Incentives
10
Some other methods for Variable incentives
• Profit Sharing• Gain Sharing• Employee Stock Ownership Plan • Bonus• Awards• Recognition Awards• Gratuity Pay
PAY PHILOSOPHY at BIRLA GROUP
LINK REWARD TO VALUE AND BENEFITS
FLOWING FROM BUSINESS STRATEGY
INTEGRATION WITH BUSINESS STRATEGY
Moderate towards Variable compensation
We believe in long-term Incentive plans
% increments are higher at junior level
Fixed + Variable plan
60 % + 40 % (senior level)
40 % + 60 % (higher level) Pay of variables at last quarter of the year
PLAN INCENTIVES ARE NOT SEEN DESIRABLE
PLAN DOESN’T INCREASE THE BASE PAY
PLAN REWARDS TEAM/GROUP RATHER THAN INDIVIDUAL
CHALLENGES WITH VARIABLE PLAN
KEY to SUCCESS
HARDWORK * PERFORMANCE = REWARD + SUCCESS
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