Transcript
COMPENSATION
What???
Compensation of employees is the total remuneration, in
cash or in kind, payable by an enterprise to an employee in
return for work done during the accounting period.
Compensation has two main components:
(a) Wages and salaries payable in cash or in kind. (direct
and Indirect payments)
(b) The value of the social contributions payable by
employers: Like- Insurance, Group Insurance, Provident
Fund, Gratuity, Accident relief, ESI and other fringe benefits
(sodexho)
(b1) Job Context are the mostly non-monetary benefits
made available to any employee by employer. This too shall
paly a pat in employee motivation & morale. (Challenges,
responsibilities, recognition, CDP’s)
Compensation/Remuneration
Financial Non-
Financial
Monthly
/Hourly
Wages
Salaries
Incentives
Bonus
Ex-gratia
Fringe
Benefits
PF
Gratuity
Insurance
Accident
Relief
Perquisites
Club
membershi
p
Stock
options
Company
Car
Job Context
Challenges
Responsibility
Growth
Prospects
Work
Condition
DIRECT INDIRECT
ECONOMY / ENVIRONMENT/ MARKET
Factors affecting pay rates
Business
Strategy &
Policies
Job
Evaluation
& PMS
Union
Influence
Employee
Legal
Considerations
Labour
MarketsEconomy
Globaliza
tion
Cost of Living
External
Internal
Salary
Compression
Legal considerations as per ILO
Employee
Compensation
Davis Bacon
(1931)
Walsh – Healey
Public Contract
Act (1936)
Title VII Civil
Rights Act (1964)
Fair Labour
Standards Act
(1938)
Family and
Medical Leave Act
Social Security Act
(1935)
Americans with
Disabilities Act
Age Discrimination
Employment Act
Employee Retirement
Income Security Act
(ERISA)
Equal Pay (1963)
Workers
Compensation Act
Theories of Remuneration
Theories of Remuneration
Theories of Remuneration
Theories of Remuneration
Perception of Pay
Strategic Compensation
This looks
beyond the
usual pay and
employment
cost , the
main objective
being –
motivating
people/employ
ee to perform
better
Strategic Comp Factors
External
Determinants
Internal
Determinants
Talent Availability
Demand & Supply
Internal Equity
Roles & Skills
Balanced Pay Mix
Cash & Benefits
Rewards
Industry Trend
Pay ranges
Overall Growth
Global Scnario
Strategic Comp Process
Job Evaluation
• Job evaluation – a
systematic way of
determining the
value/worth of a
job in relation to
other jobs in an
organisation.
• It tries to make a
systematic
comparison
between jobs to
assess their relative
worth for the
purpose of
establishing a
rational pay
structure.
Job Analysis & Job Evaluation
• Job analysis is a systematic way of gathering information
about a job.
• Every job evaluation method requires at least some basic job
analysis
• Job evaluation begins with job analysis and ends at that
point where the worth of a job is ascertained for achieving
pay equity between jobs.
Job
Evaluation
Point
Method
Factor
Comparison
Job
Classification
Ranking
Components of Pay structure
Basic Salary
Commissions/Incentives
Bonus
Dearness allowance
Child Education Allowance (taxed)
City Compensatory Allowance
Conveyance Allowance
House Rent Allowance
Leave Travel Allowance (taxed)
Lunch Allowance
Medical reimbursement (taxed)
Newspaper allowance (taxed)
Special Allowance
Gift voucher
Club membership (save tax)
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