1.What do you mean by Compensation Management? Explain the non-compensation dimensions.

The key elements of compensation for the executive officers are a base salary, an annual bonus paid in cash and a long-term incentive award denominated and usually paid in shares of Company stock. The executive officers are also eligible for certain other benefits and perquisites that are intended to be a part of a competitive compensation package that provides health, welfare, savings and retirement programs comparable to those provided to employees and executives at other companies in our industry. Some elements of compensation are related, meaning that the value of one element affects the value of another element. Increasing base salary increases target bonus opportunities, savings, pension and disability benefits. Increasing bonuses also increases pension and savings plan benefits, but long-term incentive awards are excluded from both of these plans.

The purpose, key characteristics and target pay levels of each element of compensation are in the following table. Description / Characteristics Target Pay

executive talent. the executive's level of based executive's experience accomplishments.Fixed. short-term. Approximately at to-day performance at short-term. and or slightly above median of peer group. by aligning with Combined base paid salary and target efforts in cash. . paid in cash. Annual Bonus Motivate and reward Variable current year results performance.Pay Element Purpose Level Base Salary Compensate for day. bonus approximately at median of peer group (or above or below based across the Company to achieve specific measurable results. Support and attracting retaining responsibility on the skills.

savings provide retirement and retirement income (savings and plans. long-term. Employee Benefits(1) Protect catastrophic against Fixed. indirect Combined value approximately at median of compensation: expenses and loss of health. base target three in stock. with Combined paid salary. aligning achieve measurable results and increase the market price of the Company's Common Stock. and life plans. efforts specific over by to results. long-term disability general industry. . bonus and target long-term incentives approximately at median of peer group (or above or below based on performance). short.and the income disability (health. Long-term Incentives Motivate and reward Variable long-term typically years. life insurance plans) and insurance. performance.on performance).

and to the Company by temporary following executive's providing income an . Post-Termination Provide the basis for Both Compensation rapid transition out of variable the Company that is both fixed and Approximately at elements.pension). retaining short-term. Perquisites Assist and in attracting Fixed. Approximately at or below median of industry. median of peer cash and group. Benefits are provided executives on to the all same basis as other employees. fair to the executive stock-based. indirect. general executive talent at a practical value for the Company.

competition will then lead to a depression of wages back toward the cost of subsistence.involuntary termination than for cause).” of which David Ricardo was one of the main exponents. (other 2. . The theory maintains that wages cluster around the bare subsistence level of workers. also called the “iron law of wages. Discuss the classification of Employee Benefits. A wage rate much above the subsistence level causes an increase in the number of workers. The first of them was the subsistence theory of wages. Wages that are below subsistence reduce the size of the working population. in that case competition will raise wages. What are the factors that influence the choice of a benefit program? Economic Theories about Wages Many theories have been advanced to explain the nature of wages. but only up to the subsistence level again.

which provide the capital from which the wage fund is derived. . and mobility of labor) that characterize the marginal-productivity theory do not hold in our present economic system. The bargaining theory modifies the marginal-productivity theory by taking into consideration other factors (e. free competition between the two. laws and social and political changes) that might affect the determination of wage levels and by acknowledging that certain basic assumptions (equal bargaining power of employer and employee. The surplus value. equal to the amount of extra value added to the total product by one additional worker. will ultimately reduce the amount available for other workers. the value produced by the worker in excess of what is paid in wages is called surplus value.In the surplus-value theory as propounded by Karl Marx. and their reduction would cause a decline in savings. at most. either through legislation or through union pressure.. Any increase in wages would also have to be taken out of profits. constitutes the capitalist's profit. The wage-fund theory is that wages are advanced out of a fixed fund of capital. from which an excess withdrawal.g. exacted from the worker. The marginal-productivity theory maintains that employers will only pay a wage that is.

Suppose you are a HR Manager and you are asked to develop an effective Incentive Scheme for your organization. f a c t o r s s u c h a s management union requirements. One way to dothis is through better job design . no one best way to design a job. economic conditions employeen u m b e r s a n d a v a i l a b i l i t y t r a d e o f f s i n e v i t a b l y o c c u r 3.11 Australians today expect more from their jobs. Human Resource Managers must promote employee productivity byfinding ways to unlock the potential that exists in the overwhelming majority of employees. Today significant numbers of Australians are dissatisfiedwith the quality of their working lives. Thereis however. Because job numerous regulations. What are the pre-requisites you will consider while developing an Effective Incentive Scheme? . philosophy. Alas the gap between what employees want from their jobsand what they actually get appears to be widening.as both productivity and quality of work life are tied to job design. The different approaches to job design can emphasise design either e f f i c i e n c y is influenced by government and or employee satisfaction.

This of course varies depending on the . employeeturnover. and unionisation. the attributes of theworker. company representatives take each job and figure out how much it is worth to the business. There are three major approaches to job evaluation a company can use. Effective job design thus presents a major challenge for the HR manager. the cost of re-design 4. It evaluates the position. 1. a well sabotage. These evaluations are extremely important to companies because they provide the basis for pay rates. In absenteeism. Regardless poorly designed jobs result in lower productivity. Define Pay Structure. contrast. not the performance of employees.T h i s m e a n s t h a t s o m e j o b s w i l l b e m o r e o r l e s s efficient or satisfying than others. Job design is also affected by the nature of the task. What are its objectives? Explain the major decisions involved in designing and setting competitive pay structures Job evaluation is the process of figuring out how much a job is worth to create a job structure for a business. designed resignations job promotesthe achievement of the organisation's objectives by structuring work in a way that integrates managementrequirements for efficiency and employee needs for satisfaction. The Ranking Approach o In the ranking approach.

For example. jobs with similar requirements are kept together. This method is expensive but is probably the most scientific. The Point Approach o With the point approach. it usually gets a higher ranking and pay assignment. The Classification Approach o The classification approach puts jobs into classes or groups. technical support might be more important to an online retailer than an on-site retailer. Company agents go through each job and identify which components apply to each position. Each component has a specific point value assigned. In this method. If a job is connected to many functions. .company's objectives and methods of operation. one component might be physical effort or the amount of supervision the job requires. Using this method requires businesspeople to ascertain how each job is connected to each business function. For example. The benefit of this method is that employees can understand that their pay rate is not completely subjective and is comparable to the pay rates received by others within the company. For example. The more points a job gets. the more valuable it usually is to a company and the higher pay rate it typically gets. the positions of treasurer and accountant would be in one class because they both require working with economic data. company agents list components with which to evaluate each job.

Multiple Approaches o Often. The advantage of doing this is that it gives a company a better sense of whether the job structure it has created is accurate. by contrast. For example. it removes subjectivity. in a large company. There thus is not really a "best" approach. because there are dozens of individual positions. companies complete more than one evaluation using different approaches.Why There are Different Approaches o Companies use different approaches to job evaluation and creating job structures largely because every company is different and has its own needs. the simplicity of the ranking method might be problematic. because all approaches can be used in conjunction with each other. . could find the ranking method is suitable because there are not that many positions to define. A small company.

5. your package so far is Rs. 800 per month. Explain the process of designing a successful Reward Strategy? Components of Cost to Company (CTC) Salary           Basic Dearness Allowance (DA) Incentives or bonuses Conveyance allowance House Rent Allowance (HRA) Medical allowance Leave Travel Allowance or Concession (LTA / LTC) Vehicle Allowance Telephone / Mobile Phone Allowance Special Allowance Let’s understand this using a simple example. So. 10. and you get HRA of Rs.000 per month.63. . 15. 3. DA is Rs.000 per month. Say your basic is Rs. 4.600 per year. you get conveyance allowance of Rs.500 per month.

Variable pay is awarded in a variety of formats including profit sharing. quality. bonuses. or some other metric deemed important. cash. profitability. deferred compensation. . The employee who is awarded variable compensation has gone above and beyond his or her job description to contribute to organization success. holiday bonus. safety. team work. Variable pay is used generally to recognize and reward employee contribution toward company productivity. and goods and services such as a company-paid trip or a Thanksgiving turkey.6. Write a short note on the following: a)Wage Policy Plan in India b)Voluntary Retirement Scheme(VRS) Variable pay is employee compensation that changes as compared to salary which is paid in equal proportions throughout the year.