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Compensation management system of OMV Group

Vision
As Central Europe's leading oil and gas corporation headquartered in Vienna, we get people on
the move.
Mission
We seek, find and produce oil and gas on four continents. We supply millions of people with
energy, heating, moility as well as products and services that are essential to daily life.
We carry out this task and achieve these o!ectives with values that motivate us to face future
challenges, reinforce our sense of identity and distinguish us from our competitors.
History of OMV
"#V is Austria$s largest oil producing company with important activities in other Central
European countries the company is market leader in the %anue region, supplying &' countries
will more than &(( million inhaitants. )t has egun its e*istence in Austria in &+,- as a state
owned company and has developed into most successful )ndustrial Corporation in Austria and an
international flagship. .oday "#V is economical stronger than ever efore. .he est result in the
history of corporation was achieved in /((, financial year.
With its refineries in Austria, 0ermany, and 1omania, as well as its stake in 0erman 2ayern oil
refineries, "#V achieves the ma!or share in refinery output needed in the entire %anue region.
"#V has een involved in the Austrian gas industry since &+,, when the company took over
3#V 43ow!etische#ineralolverwertung5. )n the late &+,($s a large gas field was found in
6werndrof, Austria, which greatly improved "#V$s usiness capacity. 2y &++7, a total of 8& oil
and gas field has een found in Austria. .he latest one found was in /((, in 3trasshof with a
quantity of 7 illion cuic meters that can e e*tracted.
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9ow days with group sales of E:1 /'.'/ illion and a workforce of /+,((( employees in /(&',
"#V is one of largest listed industrial companies. )n E*ploration and ;roduction, and active in
the two core countries 1omania and Austria and hold alanced international portfolio. .he
company is well known among their competitors and customers for the highest quality on the
market.
OMV IN PAKISTAN
)n ;akistan "#V has een active as an operator and partner since &++(. .he company was
incepted as part of a !oint venture, consisting of "#V ;akistan as the operator, hardy oil< 0as
now 4E9) group5, ;akistan petroleum limited 4;;=5 and "il and 0as %evelopment Company
limited. As a multinational Company, "#V is very conscious of its adherence to its outlined
policies, standards and most importantly, the local laws. "#V has strong commitment to reduce
emission to the environment. .o achieve the same an >Emission 1eduction? pro!ect has een
initiated for @adanwari ;lant.
WHAT IS COMPENSATION MANAGEMENT?
Compensation is payment in the form of hourly wages or annual salary comined with enefits
such as insurance, vacation, stock options, etc. that can positively or negatively affect an
employee's work performance.
An ideal compensation management system will help you significantly oost the performance of
your employees and create a more engaged workforce that$s willing to go the e*tra mile for your
organiAation. 3uch a system should e wellBdefined and uniform and should apply to all levels of
the organiAation as a general system.. ;lus you$ll en!oy clearer visiility into individual
employee performance when it comes time to make critical compensation planning decisions.
With effective compensation management you$ll also en!oy clearer visiility into individual
employee performance when it comes time to make critical compensation planning decisions.
.hese performance appraisals assist in determining compensation and enefits, ut they are also
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instrumental in identifying ways to help individuals improve their current positions and prepare
for future opportunities.
Definition
Compensation is a systematic approach to providing monetary value to employees in e*change
for work performed. Compensation may achieve several purposes assisting in recruitment, !o
performance, and !o satisfaction.
What is COMPNSATION MANAGMNT!!!!!!
Human Resource is the most vital resource for any organization. It is responsible for
each and every decision taken, each and every work done and each and every
result. mployees should be managed properly and motivated by providing best
remuneration and compensation as per the industry standards. !he lucrative
compensation will also serve the need for attracting and retaining the best
employees.
"ompensation is the remuneration received by an employee in return for his#her
contribution to the organization. It is an organized practice that involves balancing
the work$employee relation by providing monetary and non$monetary bene%ts to
employees.
"ompensation is an integral part of human resource management which helps in
motivating the employees and improving organizational e&ectiveness.
Components of Compensation System
"ompensation systems are designed keeping in minds the strategic goals and
business ob'ectives. "ompensation system is designed on the basis of certain
factors after analyzing the 'ob work and responsibilities. "omponents of a
compensation system are as follows(
)

Types of Compensation
"ompensation provided to employees can direct in the form of monetary bene%ts
and#or indirect in the form of non$monetary bene%ts known as perks, time o&, etc.
"ompensation does not include only salary but it is the sum total of all rewards and
allowances provided to the employees in return for their services. If the
compensation o&ered is e&ectively managed, it contributes to high organizational
productivity.
*irect "ompensation
Indirect "ompensation
Need of Compensation Management
 + good compensation package is important to motivate the employees to
increase the organizational productivity.
 ,nless compensation is provided no one will come and work for the
organization. !hus, compensation helps in running an organization e&ectively
and accomplishing its goals.
 -alary is 'ust a part of the compensation system, the employees have other
psychological and self$actualization needs to ful%ll. !hus, compensation
serves the purpose.
 !he most competitive compensation will help the organization to attract and
sustain the best talent. !he compensation package should be as per industry
standards.
.

Strategi" Compensation
3trategic compensation is determining and providing the compensation packages to the
employees that are aligned with the usiness goals and o!ectives. )n today$s competitive
scenario organiAations have to take special measures regarding compensation of the employees
so that the organiAations retain the valuale employees. .he compensation systems have changed
from traditional ones to strategic compensation systems.
Types of Compensation Management
Dire"t Compensation#
%irect compensation refers to monetary enefits offered and provided to employees in return
of the services they provide to the organiAation. .he monetary enefits include asic salary,
house rent allowance, conveyance, leave travel allowance, medical reimursements, special
allowances, onus, ;fC0ratuity, etc. .hey are given at a regular interval at a definite time.
$asi" Sa%ary
3alary is the amount received y the employee in lieu of the work done y himCher for a
certain period say a day, a week, a month, etc. )t is the money an employee receives from
hisCher employer y rendering hisCher services.
House &ent A%%o'an"e
"rganiAations either provide accommodations to its employees who are from different state
or country or they provide house rent allowances to its employees. .his is done to provide
them social security and motivate them to work.
/
Con(eyan"e
"rganiAations provide for ca facilities to their employees. Dew organiAations also provide
vehicles and petrol allowances to their employees to motivate them.
)ea(e Tra(e% A%%o'an"e
.hese allowances are provided to retain the est talent in the organiAation. .he employees
are given allowances to visit any place they wish with their families. .he allowances are
scaled as per the position of employee in the organiAation.
Me*i"a% &eim+ursement
"rganiAations also look after the health conditions of their employees. .he employees are
provided with mediBclaims for them and their family memers. .hese mediBclaims include
healthBinsurances and treatment ills reimursements.
$onus
2onus is paid to the employees during festive seasons to motivate them and provide them the
social security. .he onus amount usually amounts to one month$s salary of the employee.
Spe"ia% A%%o'an"e
3pecial allowance such as overtime, moile allowances, meals, commissions, travel
e*penses, reduced interest loansE insurance, clu memerships, etc are provided to
employees to provide them social security and motivate them which improve the
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organiAational productivity.

INDIRECT COMPENSATION
ndirect compensation refers to nonBmonetary enefits offered and provided to employees in lieu
of the services provided y them to the organiAation. .hey include =eave ;olicy, "vertime
;olicy, Car policy, FospitaliAation, )nsurance, =eave travel Assistance =imits, 1etirement
2enefits, Foliday Fomes.
)ea(e Po%i"y
)t is the right of employee to get adequate numer of leave while working with the organiAation.
.he organiAations provide for paid leaves such as, casual leaves, medical leaves 4sick leave5, and
maternity leaves, statutory pay, etc.
O(ertime Po%i"y
Employees should e provided with the adequate allowances and facilities during their overtime,
if they happened to do so, such as transport facilities, overtime pay, etc.
Hospita%i,ation
the employees should e provided allowances to get their regular checkBups, say at an interval of
one year. Even their dependents should e eligile for the mediBclaims that provide them
emotional and social security.
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Insuran"e
"rganiAations also provide for accidental insurance and life insurance for employees. .his gives
them the emotional security and they feel themselves valued in the organiAation.
)ea(e Tra(e%
.he employees are provided with leaves and travel allowances to go for holiday with their
families. 3ome organiAations arrange for a tour for the employees of the organiAation. .his is
usually done to make the employees stress free.
&etirement $enefits
"rganiAations provide for pension plans and other enefits for their employees which enefits
them after they retire from the organiAation at the prescried age.
Ho%i*ay Homes
"rganiAations provide for holiday homes and guest house for their employees at different
locations. .hese holiday homes are usually located in hill station and other most wanted holiday
spots. .he organiAations make sure that the employees do not face any kind of difficulties during
their stay in the guest house.
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