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Study of Compensation Management in HDFC Bank
Study of Compensation Management in HDFC Bank
on
COMPENSATION MANAGEMENT
SUBMITED BY
Jyoti Prasad Harichandan
Reg.No-1206284095
2012-14
CERTIFICATE
Bhubaneswar, Odisha.
Date: _________
STUDENTS DECLARATION
Place
Date.
Reg no-1206284095
ACKNOWLEDGEMENT
Place
Date.
Reg no-1206284095
CONTENTS
Chapter- 1
Objective
Limitation
Scope
Research methodology
Chapter -2
Introduction to compensation management
Company Profile
Chapter - 3
Data Analysis & Interpretation
Chapter 4
Finding
conclusion
Chapter 5
Questionnaires
OBJECTIVE
This project attempts to understand the objectives: To understand in details how to establish pay rates to different level of
employee.
To understand the impact of compensation management on performance
level.
A comparative study of the compensation management strategies followed
in different banks.
LIMITATIONS
Everything has some pros and cons and so certain limitations of this study that we
could observe are as follows:
The area of project work is banking sector so, the data or result may be
approximate as the conclusion is based on the survey method i.e. primary &
secondary source (filling of questionnaire from the employees) may be
hypothetical (imaginary) data.
The organizations which have been studied and surveyed are not providing
us with full information which has hampered the result and conclusion.
Exact data was not been provided.
SCOPE
The scope of this project is to study of the compensation management strategies
in HDFC bank & to evaluate the behaviour & performance of employee on their
work.
RESEARCH DESIGN
INTRODUCTION
A Research Design is the framework or plan for a study which is used as a guide in
collecting and analyzing the data collected. It specifies the methods and procedures
for acquiring the information needed to conduct the research effectively.
RESEARCH METHODOLOGY
TYPE OF DATA COLLECTED
There are two types of data used. They are primary and secondary data. Primary
data is defined as data that is collected from original sources for a specific purpose.
Secondary data is data collected from indirect sources.
PRIMARY SOURCES
Questionnaire consists of a set of questions presented to respondents. Because of
its flexibility, it is by far the most common instrument used to collect primary data.
SECONDARY SOURCES
These include books, the internet, the company website etc,
Particularly for growing companies. Not only have they required persons who are
well qualified but they are also retained in the organization. In the present day
context, managerial turnover is a big problem particularly in high knowledgebase
Organizations.
2. Motivating Personnel: Compensation management aims at motivating personnel
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Direct Compensation
Direct compensation refers to monetary benefits offered and provided to
employees in return of the services they provide to the organization.
Basic Salary
Salary is the amount received by the employee in lieu of the work done by him/her
for a certain period say a day, a week, a month, etc. It is the money an employee
receives from his/her employer by rendering his/her services
Conveyance
Organizations provide for cab facilities to their employees. Few organizations also
provide vehicles and petrol allowances to their employees to motivate them.
Medical Reimbursement
Organizations also look after the health conditions of their employees. The
employees are provided with medi-claims for them and their family members.
These medi-claims include health-insurances and treatment bills reimbursements.
Bonus
Bonus is paid to the employees during festive seasons to motivate them and
provide them the social security. The bonus amount usually amounts to one
months salary of the employee.
Special Allowance
Special allowance such as overtime, mobile allowances, meals, commissions,
travel expenses, reduced interest loans; insurance, club memberships, etc are
provided to employees to provide them social security and motivate them which
improve the organizational productivity.
Indirect Compensation
Benefits contributions may include: Medical Insurance Prescription Drug
Insurance Dental Insurance Group Life Insurance Long-Term Disability Insurance
Accidental Death Benefits
specialized benefits
The purpose of the benefits is to increase the economic security of employees.
The term perks is often used colloquially to refer to those benefits of a more
discretionary nature. Often, perks are given to employees who are doing notably
well and/or have seniority. Common perks are company cars, hotel stays, free
refreshments, leisure activities on work time (golf, etc.), stationery, allowances for
lunch, andwhen multiple choices existfirst choice of such things as job
assignments and vacation scheduling They may also be given first chance at job
promotions when vacancies exist.
Employee benefits in the United States might include relocation assistance;
medical, prescription, vision and dental plans; health and dependent care flexible
spending accounts; retirement benefit plans (pension, 401(k), 403(b)); group-term
life and long term care insurance plans; legal assistance plans; adoption assistance;
child care benefits; and possibly other miscellaneous employee discounts (e.g.,
movies and theme park tickets, wellness programs, discounted shopping, hotels
and resorts, and so on).
Alternative Work Schedules - There are many alternatives to a traditional 5 day, 8-hour
work schedule.
COMPANY PROFILE
The Housing Development Finance Corporation Limited (HDFC) was amongst the
first to receive an 'in principle approval from the Reserve Bank of India (RBI) to
set up a bank in the private sector, as part of the RBI's liberalization of the Indian
Banking Industry in 1994. The bank was incorporated in August 1994 in the name
of 'HDFC Bank Limited', with its registered office in Mumbai, India. HDFC Bank
commenced operations as a Scheduled Commercial Bank in January 1995.
With its experience in the financial markets, a strong market reputation, large
shareholder base and unique consumer franchise, HDFC was ideally positioned to
promote a bank in the Indian environment.
quality and service excellence would help us get there. Today, we are proud to say
that we are well on our way towards that goal.
Business Focus
HDFC Bank's mission is to be a World-Class Indian Bank. The objective is to build
sound customer franchises across distinct businesses so as to be the preferred
provider of banking services for target retail and wholesale customer segments, and
to achieve healthy growth in profitability, consistent with the bank's risk appetite.
The bank is committed to maintain the highest level of ethical standards,
professional integrity, corporate governance and regulatory compliance. HDFC
Bank's business philosophy is based on four core values - Operational Excellence,
Customer Focus, Product Leadership and People.
Distribution Network
HDFC Bank is headquartered in Mumbai. The Bank at present has an enviable
network of over 1412 branches spread over 528 cities across India. All branches
are linked on an online real-time basis. Customers in over 500 locations are also
serviced through Telephone Banking. The Bank's expansion plans take into
account the need to have a presence in all major industrial and commercial centers
where its corporate customers are located as well as the need to build a strong retail
customer base for both deposits and loan products. Being a clearing/settlement
bank to various leading stock exchanges, the Bank has branches in the centers
where the NSE/BSE has a strong and active member base.
The Bank also has a network of about over 3295 networked ATMs across these
cities. Moreover, HDFC Bank's ATM network can be accessed by all domestic and
international Visa/MasterCard, Visa Electron/Maestro, Plus/Cirrus and American
Express Credit/Charge cardholders.
Capital Structure
Paid-up capital
Rs.425,38,41,090/-
Bank's equity
19.38%
ADS Depository
17.70 %
27.69 %
Bank shareholders
5,48,774.
Loan Product
Auto Loan
Loan Against
Security
Loan Against
Property
Personal loan
Credit card
2-wheeler
loan
Home loans
Tractor loan
Health Care
Finance
Education
Loan
Gold Loan
Cards
Deposit Product
Saving a/c
Current a/c
Fixed deposit
Safe Deposit
Lockers
Payment
Investment &
Insurance
Mutual Fund
Bonds
Knowledge
Centre
Insurance
General
and
Health Insurance
Access To Bank
Services
Credit Card
Debit Card
Prepaid Card
----------------------------Forex
Services
---------------------------- Product &
Services
Trade
Services
Forex service
Branch
Locater
RBI
Guidelines
Net Safe
Merchant
Prepaid Refill
Bill pay
Direct Pay
Electronic
Funds
Transfer
Online
Payment of
Direct Tax
Net Banking
One View
ATM
Phone Banking
Branch Network
Analysis:
There are two type of compensation are available are direct or indirect
compensation. Direct includes Base Pay,Commissions,Overtime Pay,
Bonuses, Travel/Meal/Housing Allowance and indirect compensation
includes vacation, leaves, retirement, taxes.
Analysis:
The manager handle the compenstation management department in their
organization.
b) Commissions
c) Travelling/meal/housing allowance
d) Any other
Sales
20%
Base Pay
Commissions
Travelling/meal/housing allowance
Any other
80%
Analysis:
This graph shows that company provide compensation to their employees on the
basis of base pay & Travelling/meal/housing allowance.80% of employee prefer
Travelling/meal/housing allowance & only 20% of employee prefer base pay.
b) Rewarding
c) Motivation
d) Holiday packages
33%
67%
Rewarding
Motivation
Holiday packages
Monetary
Analysis:
From the chart above we find that, 67% of employee prefers monetary benefits &
only 33% of employee are happy & satisfied with non monetary benefits like
rewards. In this company neither the employee are motivated nor are they satisfied
with holiday package as compensation.
b) No
20%
Yes
No
80%
Analysis:
From the chart given above we can clearly see that 80% of employees are satisfied
with the compensation they receives & only 20% of employees are dissatisfied
with the compensation they receives.
7. What do you think that HDFC is providing better compensation package to the
employees.
a) Yes
b) No
YES
80%
Analysis:
20%
NO
employee
% of employees are satisfied with the compensation they get and %
of employee are dissatisfied with the compensation provided by the company.
a) Yes
b) No
100%
YES
Analysis:
NO
Yes, there are different types of compensation for different type of services like
direct and indirect compensation provided to the employee of the organization for
increasing their motivation and retention of employees.
a) Yes
b) No
Sales
20%
YES
NO
80%
Analysis:
From the chart given above we can clearly see that the cash is still king there
because everyone is satisfied with the monetary motivation and not by non
monetary motivation. Here we can see that 90% of employees are satisfied
with monetary value rather than
10. Is Compensation based more on group performance and less on individual
contribution.
a) Yes
b) No
10%
YES
NO
90%
Analysis:
b) No
10%
YES
NO
90%
Analysis:
a) Yes
b) No
Sales
YES
Analysis:
NO
a) Yes
b) No
c) cant say
12
10
0
0.8
Analysis:
1.2
1.4
1.6
1.8
2.2
b) No
9
8
7
6
5
Sales
4
3
2
1
0
YES
NO
Analysis:
Yes, the employees are free to give ideas and suggestions to the higher
management. By this new and different ideas are bring out of the box and this help
in taking better decision which may be beneficial for the organization. It also
boosts the confidence level of employees and their ideas are entertained so they get
motivated also.
FINDINGS
The compensation management policy is good in HDFC bank.
The employee of the organization is satisfactory to the employees.
The employees are motivated because of the environment of the organization.
The products of HDFC bank have good credibility in the region.
CONCLUSION
HDFC is first life insurance Company in India. It has businesses spread out across
the globe. The company faces a large amount of competition. The Compensation
Committee reviews the overall compensation structure and policies of the Bank
with a view to attract, retain and motivate employees, consider grant of stock
options to employees, reviewing compensation levels of the bank's employees.
The project was very satisfying experience for me, not only practically and
academically. It also helped me in enriched my knowledge also.
The Bank's compensation policy is to provide a fair and consistent basis for
motivating and rewarding employees appropriately according to their job / role
size, performance, contribution, skill and competence.
QUESTIONNAIRE
b)Commissions
c)Travel/Meal/Housing Allowance
d)Any other
b) Rewarding
c) Motivation
d) Holiday packages
b) No
7. What do you think that HDFC is providing better compensation package to the
employees?
a) Yes
b) No
b) No
b) No
b) No
b) No
a) Yes
b) No
c) cant say
b) No