compensation3_249

8/6/2019 compensation3_249

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Copyright 2004 Asia Cryo-Cell Private limited.In technological collaboration with Cryo-Cell International, Florida, USA.

COMPENSATION PACKAGE


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Objec t ives of Compens at ion

L egal Compliance with all appropriate laws andregulations

Cost effectiveness for the organization

Internal, External and Individual equity for employees

Performance enhancement for the organization


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Compens at ion Types

DIRECT INDIRECT

Base Pay

WagesSalaries

Variable Pay

Bonuses

Incentives

S tock Options

Benefits

Medical Insurance P aid time off

Retirement P ensions

Workers Compensation


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D ivision of Compens at ion -Responsibili t y

H R Manager Line Manager

D evelops and

Administers

Compensation system

Conducts job evaluation

and wage surveys

D evelops wage / salary

structures and policies

Attempt to march

performance and rewards

R ecommend pay rates

and increment based on

guidelines from HR unit

Evaluate employee

performance based

compensation purposes


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COMPENSATION STRATEGIES

Compensation P hilosophies

S trategic Compensation Design

Compensation and Organizational Culture Cost Effectiveness and Labour Market Positioning

Competency Based P ay

Broadbanding and Career Development


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Compens at ion P h ilosop h y

ENTITLEMENT PERFORMANCE

Seniority Based No raises for length of service

Across the board raises No raises for longer service poor

performers

Guaranteed movement of scales Market ad justed pay structure

Industry comparisons only Broader Industry comparisons

Santa Claus Bonuses Bonuses tied to performance results


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C ha nging Compens at ion S trat egies

Yes te r rr w

F i s l r V ri l pay a s add-onto sa la r y

Low fi d sa la r y, mo r a riab l pay

onu s s /pe rks f or

exe cuti e s on ly

Va riab le pay eme r ing

t r oughou t or gan iza tion

Variab le pay common

thr oughou t the o r gan iza tionF ixed bene fits,r ewa r d long tenu r e

F lex ible bene fits P ortab le bene fits

ompany-ba sedca r ee r mov ing up

Indu str -ba sed ca r ee r,mov ing a r ound

Skill-ba sed , inte rimemp loymen t

Hie r a rchica lor gan iza tion s

F la tte r team-ba sedor gan iza tion s

e twork virtua lor gan iza tion s

oo kie cutte r payplan s

Tota l compen sa tion(Loo k a t bene fits, too)

Cu stomized , integ r a ted pays st em s; a , bene fits,intang ible s


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Qu art ile S trat egy

Third Quartile Above -Market S trategy Maximum(25% of firms pay above and 75% pay belo )

S econd QuartileMiddle -Market S trategy Medium(50% of firms pay above and 50% pay belo )

First QuartileBelow -Market S trategy Minimum(75% of firms pay above and 25% pay belo )


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O u t comes f r om Compe t ency B a sed Sys t ems

O r iz ti - e l t edOu t es

Emp l ee - e l t edOu t mes

Gr ea te r wo rkf orce flex ib ility Enhan ced emp loyeeunde rst and ing o f r gan isa tiona lbig p ictur e

Incr ea s ed e ff e ctivene ss of

wo rk Team

Gr ea te r emp loyee s e lf -

managemen t capab ilitie s

F ew bo ttlene cks in wo rk flow Imp r oved emp loyee s a tisf a ction

Incr ea s ed wo rke r ou tpu t Gr ea te r emp loyee comm itmen t


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D ESIGNING EFFECTIVE COMPENSATION

PROGRAMJ ob Analysis

(J ob Descriptions, J ob S pecifications )

J ob Evaluation

P ay P olicies P ay S tructures

P erformance Appraisal

Individual P ay

Implementation, Communication, Monitoring

P ay S urveys


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COMPENSATION POLICIES AN D PROCE DU RES

K now what the competition is doing and benchmark your structure to reflect competitive practices for retention andrecruitment purposes.

S alaries should reflect level of responsibility employeesmay have in the organization.

F orm a compensation committee (preferably representedby management and employees ).

Contd...


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COMPENSATION POLICIES AN D

PROCEDU

RES

Create a structure where salaries and any increasesreflect company performance as espoused by thecompensation committee.

Develop and document a general company policy andstrategy for pay increases.

L iaison with the compensation committee for review,ad justments and approval.


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Te a m B a sed Compens at ion

Types of Team Incentives

Same size reward for each team member Different size rewards for each team member

Criteria for Best Team WorkSignificant interdependence exists among the work of

several individuals, and team work and co-operation isabsolutely essential.

Contd..


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Te a m B a sed Compens at ion

Difficulties exist in identifying exactly who isresponsible for different levels of performance.

Management wants to create or reinforce teamwork and co-operation among employees

Rewards are seen as being allocated in a fair and equitable manner.

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