Professional Documents
Culture Documents
Content
Introduction Objectives Principles Essential components of salary system Factors affecting Methods of wage system Challenges Phases of Comp. system Process of plan Evolution of pay systems Benefits Summary reference
Define Compensation
is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction.
Compensation Facts
Cash and non-cash rewards employees receive in exchange for their work Effective compensation management
Employees more likely to be satisfied and motivated to contribute
Objectives of Comp.Management
establish objective and equitable pay systems design cost-effective benefits packages that help attract and retain high-quality employees. help employees to effectively utilize their benefits, such as by providing information on retirement planning.
Objectives of Compensation
Administrative efficiency
Acquire personnel
Retain employees
Legal compliance
Effective Compensation
Ensure equity
Control costs
Reward behaviour
General Factors 1. Demand for and Supply of labour 2. Ability to pay of the Organization 3. Labour Unions 4. Cost of Living 5. Prevailing wage rates 6. Job Requirements 7. Productivity 8. State Regulation
Individual Factors 1. Employees Age and work Experience 2. Educational Qualification 3. Promotion possibilities 4.Hazards involved in the job 5. Stability of Employment 6.Demand for the product 7.Industrys role in the economy 8.Potentials of an employee
Methods of Wage Payment 1. Time Wage system 2. Piece Wage system 3.Balance or Dent wage system
Compensation Challenges
Prevailing wage rates
Government constraints
Compensation Challenges
Union power
Productivity
Motivating development
Relating to performance
Setting goals
Pay Structures Useful for standardizing compensation practices. Most pay structures include several grades with each grade containing a minimum salary/wage and either step increments or grade range. Step increments are common with union positions where the pay for each job is pre-determined through collective bargaining. Salary Surveys Collections of salary and market data. May include average salaries, inflation indicators, cost of living indicators, salary budget averages. Companies may purchase results of surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing the results of salary surveys conducted by other vendors, note that surveys may be conducted within a specific industry or across industries as well as within one geographical region or across different geographical regions. Know which industry or geographic location the salary results pertain to before comparing the results to your company. Policies and Regulations
Phases of C.M
Phase I Job Analysis
Reference
Human resource management K.Aswattppa, 5th edition, McGraw hill company, pages 285-309. Job satisfaction, www.owlnet.rice.edu/.../psyc_231_ch09_job%20satisfaction.ppt Job evaluation,www.businessfaculty.utoledo.edu/ddwyer/HURM4650/.../jobeval.ppt Total compensation management, training costs and rewarding employees, Aberdeen group, April 2008. http://www.scribd.com/doc/3820720/WAGE-AND-SALARYADMINISTRATION-IN-INDIA http://www.hr-guide.com/data/G400.htm http://www.hr-guide.com/compensation.htm
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