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Compensation Management Ppt

Compensation Management Ppt

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Published by: Dushyant Sinha on Apr 28, 2011
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Presented By : Dushyant Sinha Sandeep Shah Naman Bhatia Ishaan Khanna Pratik Manwar

. . Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards. each and every work done and each and every result. The good compensation will also serve the need for attracting and retaining the best employees. It is responsible for each and every decision taken.Introduction Human Resource is the most vital resource for any organization.

It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees .Compensation Compensation is the remuneration received by an employee in return for his/her contribution to the organization.

current employees are likely to leave and replacements will be difficult to recruit. Without adequate compensation.Contd«. When managed correctly. it helps the organization achieve its objectives and obtain. . and retain a productive workforce. maintain. The outcomes of pay dissatisfaction harm productivity and affect the quality of work life. Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world.

Compensation Management Compensation management is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness. control and cost effectiveness. The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility. It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies. .

salaries. time off.Types of compensation Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of nonmonetary benefits known as perks. etc. Financial Compensation: Total Financial compensation = Direct + Indirect Compensation Direct Financial Compensation ² pay received in forms of wages. bonuses and commissions . fringe benefits .

Fringe Benefits Fringe benefits described as Welfare expenses Wage supplements Perquisites other than wages Sub wages Social charges .

All financial rewards not included in direct compensation. Family & medical leave. Disability Protection.Satisfaction person receives from psychological & or physical environment in which person works. flextime . good working conditions. skills variety. For examples. Nonfinancial Compensation .. For examples workers compensation. experiences.Types of compensation (contd.) Indirect Financial Compensation(benefits) .

Salary is just a part of the compensation system.Need of Compensation Management A good compensation package is important to motivate the employees to increase the organizational productivity. The compensation package should be as per industry standards . Thus. Unless compensation is provided no one will come and work for the organization. Thus. compensation helps in running an organization effectively and accomplishing its goals. the employees have other psychological and self-actualization needs to fulfill. compensation serves the purpose. The most competitive compensation will help the organization to attract and sustain the best talent.

Objective Of Compensation Management .

Contd« To help the organization achieve strategic success while ensuring internal and external equity. External equity .ensures that more demanding positions or better qualified people within the organization are paid more. Internal equity.assures that jobs are fairly compensated in comparison with similar jobs in other firms Attract qualified personnel Retain current employees Reward desired behaviour Control costs Facilitate understanding .

DETERMINING COMPENSATION Internal Factors: Employers Compensation strategy Worth of a Job Employees Relative Worth Employers Ability to Pay     .

Contd«« External Factors: Labor Market Conditions Area Wage Rates Cost of Living Collective Bargaining     .

The Compensation Structure Wage and Salary Surveys Collecting Survey Data The Wage Curve Pay Grades Competency Based Pay .

1976 Payment of Bonus Act. 1947 Minimum Wages Act. 1936 Industrial Dispute Act. 1948 Equal remuneration Act. 1965 Wage Board .Governmental Wage Policy of India Payment of Wages Act.

. two other independent members and two or three representatives workers and employers each The recommendations of the board are first submitted to the government for the acceptance After acceptance the government requests the parties to implement them.Wage boards Wage boards consist of an impartial chairman .

To decide on appropriate wages To decide wages based on individual·s capability To develop a pre-determine scheme for payment of wages To establish linkages of wages payment with performance To provide for incentive payment To guarantee minimum wages To provide for neutralization of price rise To develop a wage structure which can attract talent .Objective Of A Good Wage Policy To establish good labor relations.

Compensation Issues The Issue of Equal Pay for Comparable Worth The Issue of Wage Rate Compression Living Wage Laws The Issue of Low Salary Budgets .

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