lec-1 reward strategies
TRANSCRIPT
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Reward Strategies
Presented By:
Devdatt.Tiwari
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REWARD STRATEGIES
Elements
Compensation / remenurationplace in reward strategy
Compensation structure
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Introduction
Individual goals
Efforts
Performance
Organization goals
Rewards
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Types of Rewards (Benefits)
INTRINSIC ( fromjob itself)
EXTRINSIC (fromManagement)
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Extrinsic factors
FinancialPerformancebased
Piece work
Incentive
Commission
Performancebonus
Merit pay
Financial -Membershipbased
Basic pay
D.A
HRA
Protectionprogram
Pay for timenot worked
Non-Financial Preferred
officefurnishing
Flexible time
Preferredleave
Own secretary
Impressive jobtitle
Conveyance
Medical care
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Structure of Rewards
Balancing intrinsic & extrinsic rewards is the key!!!
Wage
Salary
Earning
Nominal wage Take home salary
Minimum wage
Living wage
Fair wage Incentive wage
Wage rate
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Objectives of Wage/SalaryAdministration
Attraction
Retention
Equity
Desired behavior
To keep cost in line
Image
Collective bargaining
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Significant goals driving pay &reward changes
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Mechanism of wage & salaryadministration Wage theories ( Bargaining theory &
Contribution of Behavioral science) Job evaluation Factors affecting wage/salary
- competition- Ability to pay- Cost of living
- Productivity- Union- Govt. legislations
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Wage fixation institute in India
Wage board
Pay commission
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Bonus
Bonus (Important provisions)
- 60% of surplus
- Bonus = Pay+DA
- Rs.1600/- ceiling now Rs.2500/-
- Fraud, theft by employees
- Set off
- Set on
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Managerial compensation
Mumbai = Ceiling Rs.62,700/-
Mumbai = Salary 45% of salary,
Cooking gas/Power 10% of salary,
Pensionary benefits 25% of salary
Medical expenses 3 months salary
Above is ceiling for Managers/ Directors
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Fringe benefits
Defn:
- Benefits on & above the regularwages.
- These are those monetary & non-monetary benefits given to employeesduring & post employment period
which are connected with employmentbut not to the employees contributionto the organization.
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Need / Objective of Fringebenefits
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Types of Fringe benefits
As per Dale Yoder, he has classified it into 4 heads For employment security For health protection For old age & retirement
Personnel identification, stimulationIn Indian context: Payment for time not worked Employee security
Safety & health Welfare & recreational facilities Old age / Retirement Non-financial benefits
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Stock Options (GoldenHandcuffs)
BENEFITS :-
1. Motivational
2. Ownership sharing
3. Productivity increase Profit increase
4. Employee benefit plan
5. Partnership role leads to stock price rise6. Success share
7. It is a productivity incentive
8. It is a popular & effective way to pay for the performance ofemployees & managers
9. Eg:
10. It is a retaining tool
11. Long term incentive
12. Attraction tool
13. Corporate culture
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Types Of Stock plan
Stock price appreciation plan & rights
Stock purchase
Phantom stock Restricted stock / Cash plans
Performance based plans
ESOP
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Employee stock ownershipplans
Meaning
Advantages :1. During retirement2. Capital appreciation
3. Incentive based4. Reduction in taxes
Disadvantages:
1. Liquidity2. Performance of stock3. Accountability of fiduciaries4. Dilution
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Thank you