Compensation management NKT thane colg ....TYBMS 2013

COMPENSATION MANAGEMENT

PRSENTED BY: T.Y.B.M.S / A

SUMIT KORI – 38JAYESH TEKCHANDANI - 48

AVINASH MOURYA - 49DEEPAK N. GUPTA -50

HEMANT KUMAR HARIJAN - 51

Human Resource is the most vital resource for any

organization. It is responsible for each and every decision taken,

each and every work done and each and every result. Employees should be managed properly and motivated

by providing best remuneration and compensation as per the industry standards.

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

Introduction

Compensation is the remuneration received by an employee in return for his/her contribution to the organization.

It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees

Compensation

When managed correctly, it helps the organization achieve its

objectives and obtain, maintain, and retain a productive workforce.

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

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

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

Cont.….

Compensation management is an integral part of

human resource management which helps in motivating the employees and improving organizational effectiveness.

The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility, control and cost effectiveness.

It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies.

Compensation Management

Compensation provided to employees can direct in the

form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc.

Financial Compensation:Total Financial compensation = Direct + Indirect

Compensation

Direct Financial Compensation – pay received in forms of wages, salaries, bonuses

and commissions , fringe benefits

Types of compensation

Fringe benefits described as Welfare expenses Wage supplements Perquisites other than wages Sub wages Social charges

Fringe Benefits

Indirect Financial Compensation(benefits) All financial rewards not included in direct

compensation. For examples workers compensation, Family & medical leave, Disability Protection,

Nonfinancial Compensation- Satisfaction person receives from psychological & or

physical environment in which person works. For examples, skills variety, experiences, good working conditions, flextime

Types of compensation (contd..)

A good compensation package is important to motivate the

employees to increase the organizational productivity.

Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.

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

The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards

Need of Compensation Management

Objective Of Compensation Management

Compensation

Package

Motivation

NeedSatisfactio

n

Employee

Retention

To help the organization achieve strategic success

while ensuring internal and external equity. Internal equity- ensures that more demanding

positions or better qualified people within the organization are paid more.

External equity - assures that jobs are fairly compensated in comparison with similar jobs in other firms

Attract qualified personnel Retain current employees Reward desired behaviour Facilitate understanding

Cont.…

Internal Factors: Employers Compensation strategy Worth of a Job Employees Relative Worth Employers Ability to Pay

DETERMINING COMPENSATION

External Factors: Labor Market Conditions Area Wage Rates Cost of Living Collective Bargaining

Cont.……

Wage and Salary Surveys Collecting Survey Data The Wage Curve Pay Grades Competency Based Pay

The Compensation Structure

Payment of Wages Act, 1936 Industrial Dispute Act, 1947 Minimum Wages Act, 1948 Equal remuneration Act, 1976 Payment of Bonus Act, 1965 Wage Board

Governmental Wage Policy of India

Wage boards consist of an impartial chairman ,

two other independent members and two or three representatives workers and employers each

The recommendations of the board are first submitted to the government for the acceptance

After acceptance the government requests the parties to implement them.

Wage boards

To establish good labor relations. To decide on appropriate wages To decide wages based on individual’s capability To develop a pre-determine scheme for payment of

wages To establish linkages of wages payment with

performance To provide for incentive payment To guarantee minimum wages To provide for neutralization of price rise To develop a wage structure which can attract talent

Objective Of A Good Wage Policy

The Issue of Equal Pay for Comparable Worth The Issue of Wage Rate Compression Living Wage Laws The Issue of Low Salary Budgets

Compensation Issues

Thank

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