COMPENSATION MANAGEMENT Points to be discussed in the Lecture Sessions: Definition and objectives of Job Evaluation Process and techniques of Job Evaluation. Advantages and Limitations of Job Evaluation. Concept of Wage and Salary Administration. National Wage Policy. Concepts of Rewards. Types of Incentives plans. Employee benefits.
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COMPENSATION MANAGEMENT
Points to be discussed in the Lecture Sessions:
Definition and objectives of Job Evaluation
Process and techniques of Job Evaluation.
Advantages and Limitations of Job Evaluation.
Concept of Wage and Salary Administration.
National Wage Policy.
Concepts of Rewards.
Types of Incentives plans.
Employee benefits.
JOB EVALUATION is the systematic process of analyzing and evaluating jobs to determine the relative worth of each job in an organization.
…..Basis for compensation management.
…..Job Evaluation is the rating of jobs to determine their position in the job hierarchy.
•Determine the positions and place of a job.
•Manage internal and external consistency in the compensations.
•Ensure employee satisfaction with respect to the compensation.
•Basis for classification of new or changed jobs.
The objectives of JE :
JOB EVALUATION
Process of Job Evaluation.
Preparation of a job Evaluation Plan.
Job Analysis
Job Description and Job Specification
Selection of Job Dimensions.
Classification of jobs.
Implementation of the evaluation.
Maintenance.
Techniques of Job Evaluation.
Non Quantitative techniques.
RankingRelative ranking
Paired Comparison.
Single Factor Ranking.
Job Classification or Grading
1. Analyzing Organizational Culture.
2. determining job dimensions.
3. Defining Job grades.
4. Classifying jobs with the grade definitions.
5. Using inputs from employees, unions etc .
6. Freezing the grades and assigning monetary value to the key grades.
Quantitative Techniques.
Point Rating Method.
Identifying a number of Compensable Factors and determining the degree to
which of these factors is present in the job.
Factor Comparison Method.
Decision Band Method.
Job Factor Job A Job B Job C Job D Job E Correct rate Correct rate Correct rate correct rate correct rate
1.Skill 10 8 7.50 5 11
2. Effort 5 3 4 4 6
3. Responsibility 3 1 1 1 4
4. Working Conditions.
CONCEPT OF WAGE AND SALARY ADMINISTRATION.
The Wage and Salary Administration maintains equity and competitiveness in the wage market, reinforcing positive employee behavior, eliminating wage discrepancies, maintaining good relations .
PURPOSE:
Attracting talented resources.
Retaining and motivating employees.
Financial Management
Legal requirements.
Concepts of different wages.
• Minimum wage
•Fair wage
•Living wage.
Basic Wage Plans.
• Time Wage Plan.
•Piece wage plan
•Skill based pay
•Competency based pay.
•Broad banding.
Variable Compensation Program.
The worker Level-----------Piece rate and time rate systems.
The Managerial Level-----Monetary and non monetary rewards for achievements of results.
The Group Level-----------Incentives for group performance.
Executive Compensation.
Steps to design an effective executive compensation plan.
i. Review the existing executive compensation plan.
ii. Analyze the organizational Objectives.
iii. Retention Scheme.
iv. Consideration on funding and other factors.
v. The final plan
vi. Information about the compensation plan to the stakeholders.
Wage Differential:
…….Differences in wages paid for same or similar work because of various reasons .
• Individual level.
•Organizational Level.
•Occupational Level.
•Industry Level.
•Regional Level.
How Wage fixation takes place?? Who decides??
Collective Bargaining or negotiation.
Government Authorities( Pay Commission and Wage Board).
Concept of Reward.
Extrinsic Reward
Intrinsic Reward.
Financial Rewards.
Nonfinancial Rewards.
Performance based rewards
Membership based rewards.
Non Monetary Incentives
Recognition.
A challenging assignment.
Additional responsibility.
Free gifts and free vacations.
Awards.
: Long Term Plans.a. Annual Bonus.
b. Profit Sharing: Distribution plan, Deferred plan,