compensation management
TRANSCRIPT
COMPENSATION
PRESENTED BY:RAFATH BEGUMPM/2014/409
NIPER -HYD
CONTENTS INTRODUCTION
OBJECTIVE
COMPENSATION MANAGEMENT
ELEMENTS IN COMPENSATION
FACTORS AFFECTING COMPENSATION
COMPONENTS OF COMPENSATION
IMPORTANCE
CONCLUSION04/18/2023 2HRM
INTRODUCTION
Compensation may be defined “as money
received in performance of work and many kinds
of benefits that an organization provides to
employees”.
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OBJECTIVES
To recruit and retain qualified employees.
To increase or maintain morale.
To determine basic wage and salary.
To reward for job performance
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COMPENSATION MANAGEMENT
Compensation systems are designed keeping in mind the strategic goals and business objectives.
Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities.
JOB ANALYSIS
PAY STRUCTUR
ES
SALARY SURVEYS
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ELEMENTS IN COMPENSATION
JOB EVALUATION
WAGE & SALARY
BONUS & INCENTIVES
PAYROLLS
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JOB EVALUATION It is the process of determining the worth of one job in
relation to that of other in a company so that a fair and equitable wage and salary system can be established.
METHODS
RANKING
POINT METHOD
CLASSIFICATION
FACTOR COMPARISION
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CONCEPT OF WAGE Minimum wage Fair wage Living wage
Wage plan Time wage plan Piece wage plan Skill based pay Competency based pay
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INCENTIVES
Is any factor(financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives.
Short term plans:
Halsey premium plan:
Total wage=(time taken x standard rate)+bonus
Where bonus=(time saved x std rate)50%
Rowan plan:
Total wage=(time taken x std rate)+bonus
Where bonus=(time taken x time saved x std rate)/std time.
Barth system:
Total wages=√std time x time taken x hourly rate04/18/2023 9HRM
Long term incentives
Service incentives: Rewards employees with years of service with the
company.
Profit sharing plans: Certain percentage of profits is distributed.
Stock options: Employee’s are given the option of purchasing the
company’s stock
Performance bonus plans: Rewards employees based on each employee’s
annual performance review.04/18/2023 10HRM
PAYROLLS Refers to the administration of employees, salaries,
wages, bonus, net pay, deductions etc.
It consists of the employee ID,employee name, date of joining, daily attendance record, basic salary, allowances, overtime, bonus, commissions, incentives, pay for holidays, vacations and sickness, value of meals and lodging etc.
There are some deductions such as PF, taxes, loan instalments or advances taken by employees.
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FACTORS AFFECTING COMPENSATION
Demand and supply of labour
Cost of living Society Labour unions
Compensation policy The org. ability to pay Job analysis and
description Employee
EXTERNAL INTERNAL
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COMPENSATION COMPONENT
COMPENSATION
MONETARY NON MONETARY
INDIRECTDIRECT
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DIRECT COMPENSATION
Base pay
Bonus
Incentives
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BASE PAY : Fixed amount of money paid to an employee by an employer in return for work performed.
BONUS: A sum of money added to a person's wages as a reward for good performance.
INCENTIVES: Inducement or supplemental reward that serves as a motivational device for a desired action or behaviour
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INDIRECT COMPENSATION
Insurance(health , eye..)
Leaves (sick, holiday/personal)
Clothes Company parties Phones/Laptops Retirement programs
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NON MONETARY Enhance dignity and satisfaction from work performed.
Promote social relationship with co-workers.
Allocate sufficient resources to perform work assignments.
Offer supportive leadership and management.
Enhance physiological health, intellectual growth.
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IMPORTANCE OF COMPENSATION MANAGEMENT
Sound compensation/reward system brings peace in the relationship between employee and employer.
It creates a healthy competition among them and encourages employees to work hard and efficiently.
The system provides growth and advancement opportunities to the deserving employees.
The organisation is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to other job.
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CONCLUSION
We can say that good compensation can increase the productivity of an organization because it provides various rewards, bonus, schemes etc. and its compulsory for every organization.
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REFERENCES http://www.slideshare.net/dwnload/comp
ensation-mgt?related=2 http://www.slideshare.net/805984/compe
nsation-management-16470965?related=3
http://www.slideshare.net/saswatbarpanda/compensation-management-17721628
Human Resource Management by Gary Dessler and Biju Varkkey .
Human Resource Management in Practice by Srinivas R. Kandula.
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