This action might not be possible to undo. Are you sure you want to continue?
Submitted in partial fulfillment of the requirements of for the award of the degree of MASTERS OF BUSINESS ADMINISTRATION of BANGALORE UNIVERSITY
Submitted By Mr. RAJESH.V.D Reg. No. 05JJCM6039 Under the guidance of DR. ARUN KUMAR DEAN
KRISTU JAYANTI COLLEGE OF MANAGEMENT AND TECHNOLOGY BANGALORE 2007
I, Rajesh, hereby declared that this project titled “A study on HRIS with reference to compensation and benefits management for Macmillan” submitted by me to the department of Management of Bangalore University in partial fulfillment of requirement of MBA programme is a bonafide work carried by me under the guidance of Dr. Arun Kumar. This has not been submitted earlier to any other university or institution for the award of any degree diploma / certificate or published any time before.
Rajesh V D
CERTIFICATE FROM GUIDE & HEAD OF THE INSTITUTION
Certified that this declaration entitled “Study on HRIS with reference to Compensation and Benefits management for Macmillan India Ltd”, submitted in partial fulfillment for the award of MBA Degree of Bangalore University was carried out by Mr. Rajesh under the guidance of Dr. Arun Kumar. This has not been submitted to any other university or institution for the award of any degree/ diploma/ certificate.
DEAN MBA DEPARTMENT
My project work would have become practical without the help of grace of the “Almighty” and timely advice and creative support rendered by many. I express my affectionate thanks to The Principal, Kristu Jayanti College, and Bangalore for giving me an opportunity to do this training. I am highly indebted to my faculty guide Dr. Arun Kumar department of management studies for inspiring me and for his valuable guidance and assistance provided. I also thank all other staff members of the department for guiding me in my training. I would also thank Mr. Abijith Ganguly (HR Manager) of Macmillan India Ltd, for permitting me to do the practical training in the organization. I express my sincere gratitude and special thanks to all employees for their valuable suggestions and keen interest which are extremely helpful in shaping this project work to success.
EXECUTIVE SUMMARY The project “study on HRIS with reference to compensation and benefits” was conducted at McMillan India Ltd. The project basically dealt with building the compensation and benefits modules as a part of the Human Resource information system, which was being implemented in the organization using an Enterprise Resource planning (ERP) package, SAP – which suited most of the requirements and functions of Macmillan. The project was initiated by putting down all the activities that were currently being done at the organization and the activities, which should be pursued in future. The project involved studying the existing modules of compensation and benefits and trying to improve it with added features for an easy automation. For this to achieve, there was a small research conducted by interviewing employees and clients (who have bought this package or have designed one by their own) by use of a questionnaire designed by me. With the help of the research I got insight into the latest features that are used in the compensation and benefits, which helped me to design the needed modules of compensation and benefits. The modules are designed in such a way that all the activities are in a sequential order. The modules designed consisted of every detail beginning from the compensation philosophy the company should use to the various benefits the company can offer. It involved designing of various forms, which is built with the idea of simplifying the process to the maximum extent, and to make it very clear how each form should be used. The entire modules are looked into form the strategic Human Resource perspective, which stresses on both the qualitative and quantitative issues compensation and benefits process. Quantitative measures were particularly used in a few areas to reduce subjectivity. The project is provides a clear distinction between who is authorized to use which form, so that there is no mixing up of decision making and results by un concerned or 5
unauthorized people. The process is made very clear by specifying the objectives of each activity in the process. In short, the project deals with the entire spectrum of compensation and benefits from start to finish in a sequential order to help the employees use each form (each activity) to the fullest for organizational benefit and to achieve positive results by the end of the process.
LIST OF CONTENTS
Chapter No 1 2 3 4 5 6 7
Topic Introduction Company profile Research design Analysis and interpretation of the data Summary of conclusion and recommendation Bibliography Annexure
Page No 1-4 5-9 10 - 12 13 - 73 74 - 77 78 - 79 80 - 83
LIST OF TABLES Table No Tables Page No 7
1 2 3 4
Levels and responsibilities Job evaluation points Job evaluation results Compensation details
26 28 - 29 39 40 - 41
LIST OF CHARTS
Chart No 1
Charts Internally consistent compensation structure
Page No 25 8
2 3 4 Figure No 1 2 3 4 5 6 7 8 9 10 11 12
Compensation administration process Establishing pay structure Job evaluation results Figures Compensation policies Variable pay Analysis of compensation and benefits Compensation philosophy Job evaluation technique Compensation administration process Salary structure Compensation statistics Variable pay Incentive plan Staff recognition Benefits
27 37 38
62 63 64 65 66 67 68 69 70 71 72 73
The project basically dealt with building the compensation and benefits modules as a part of the Human Resource information system, which was being implemented in the organization using an Enterprise Resource planning (ERP) package, SAP – which suited most of the requirements and functions of Macmillan .The project involved studying the existing modules of compensation and benefits and trying to improve it with added features for an easy automation.
For this to achieve, there was a small research conducted by interviewing vendors (who already have a package designed for compensation and benefits for a readymade use by the companies) and clients (who have bought this package or have designed one by their own) by use of a questionnaire designed by me. With the help of the research I got insight into the latest features that are used in the compensation and benefits, which helped me to design the needed modules of compensation and benefits
It involved designing of various forms, which is built with the idea of simplifying the process to the maximum extent, and to make it very clear how each form should be used. The entire modules are looked into form the strategic Human Resource perspective, which stresses on both the qualitative and quantitative issues compensation and benefits process. Quantitative measures were particularly used in a few areas to reduce subjectivity. A Brief Introduction of The Company Macmillan is one of the largest and best-known publishers in the world. It is characterized by high-quality academic, educational, fiction and non-fiction publishing in many forms: educational course materials, science, technology and medicine, college textbooks, dictionaries, monographs and reference materials. A unique player in India’s education market, Macmillan India enjoys a cutting-edge niche as partner-in-progress in the socio-economic development of the country. It is in this field that Macmillan's flame burns the brightest – publishing educational books and materials for over 100 years.
The company has the distinction of continuity in India’s fragmented educational market – which is also amongst the largest and the fastest growing in the world. India has a million schools however, a large part of the school market is closed to private publishers since the state governments themselves publish books for state board schools. It is hoped that state-level educational publishing will be opened to private publishers in due course. This would be a huge and an exciting opportunity. The Indian publishing community consists 11
Macmillan India has over 2,500 titles in its list and has played a significant role in the growth and success of Indian writing. The company has relationships with over 15,000 schools all over India and with its 22 offices and showrooms, possibly the widest allIndia network.
As a major player in providing typesetting, data coding and conversion and editorial services to publishers globally, Macmillan has been a pioneer in the information technology-enabled service (ITES) space. It started its export-oriented typesetting operations in 1975. Mainly British and European publishers have driven the market so far but now US publishers are looking actively at outsourcing to India. This will have a positive impact on the current export market estimated to be around Rs 8,000 million (US$ 181.82 million) (Source: Industry estimates). Macmillan employs 3,354 staff with about 1,500 in the ITES activity.
Industry Profile Book Publishing is the industry concerned with the production of literature or information – the activity of making information available for public view. In some cases, authors may be their own publishers.
Traditionally, the term publication refers to the distribution of printed works such as books and newspapers. With the advent of digital information systems and the Internet, the scope of publishing has expanded to include websites, blogs, and the like. As a business, publishing includes the development, marketing, production, and distribution of newspapers, magazines, books, literary works, musical works, software and other works dealing with information. Some of the major players are: Macmillan India ltd Oxford press Himalaya publishing house S.chand publications Pearson Education Prentice hall of India pvt ltd RDSA publishers The Indian publishing community consists of over 5,000 publishers but major and organized players are few. The above mentioned are some of them. Mainly British and European publishers have driven the market so far but now US publishers are looking actively at outsourcing to India. This will have a positive impact on the current export market estimated to be around Rs. 8,000 million (US$ 181.82 million) (Source: Industry estimates).
2. COMPANY PROFILE
Daniel and Alexander Macmillan, two brothers from the Scottish Isle of Arran, founded Macmillan in 1843. Daniel was the business brain, while Alexander laid and the literary foundations, publishing such great authors as Charles Kingsley, Tomas Hughes, Lewis Carroll, Alfred Lord Tennyson, Henry James, Tomas Hardy, Rudyard Kipling and H.G.Wells. As the company evolved, the Macmillan family’s vision continued to inspire the publishing of major writers including WB Yeats, Sean O’Casey, John Maynard Keynes, Charles Morgan, Hugh Walpole, Margaret Mitchell, C.P.Snow and Rumer Godden. INERNATIONAL EXPANSION An ambitious expansions programme was initiated in the late 1960s when Harold Macmillan retired from politics after his spell as Prime Minister and Became chairman of the company. Serious academic, educational and literary publishing was followed by significant growth in reference programme and college textbooks as well as educational and scientific journals. New international opportunities were grasped and publishing operations were set up in Japan, Mexico and the emerging markets of Africa and Asia. MACMILLAN TODAY Macmillan is one of the largest and best-known international publishers in the world. High-quality academic characterizes it and scholarly, educational, fiction and non-fiction publishing in many forms: from STM and social science journals to serious non-fiction and literary fiction; academic monographs and reference.
Macmillan operates in over seventy countries. The diversity and relative autonomy of the individual companies within the group ensures a vibrancy and local relevance to its publishing in all markets. A privately owned company (once owned by the Macmillan family it is now wholly owned by the Verlagsgruppe Gorge von Holtzbrinck, a German family group), one of the Macmillan’s strengths is its ability to focus on organic development and investment for the long term. Macmillan prides itself on a willingness to innovate and on employing people with the creative and business sense to develop and implement new ideas. Hence, for example, in current years it has been able to develop ambitious online educational resources-such as the Macmillan English Campus-and to invest in growing list of scientific journals ambitiously, extending the nature philosophy and brand to a number of new ventures. Macmillan is particularly unusual in the publishing world in its commitment to service. It is one of the only large publishing group that serves third party clients and its own companies with services including typesetting and data capture, web design and development in India, print sourcing facilities in the far east, and warehousing and fulfillment in the UK, USA and, Australia. Its clients include many other publishers, from Reed Elsevier through Bloomsbury to yellow pages. Internationally, the group consists of five main operational units: 1. Nature publishing group (NPG): scientific, technical and medical journals and reference. 2. Palgrave Macmillan: academic publishing in humanities, social sciences and business. 3. Pan Macmillan: fiction and non-fiction for adults and children. 4. Macmillan education: English language teaching and general curriculum learning materials for international markets.
5. Publishing services: book and journal order fulfillment, warehousing and distribution, printing and electronic production, web development and information processing. PRESENT OWNERSHIP Verlagsgruppe George von Holtzbrinck GmbH, a large media group created in 1971, owns the Macmillan group. Holtzbrinck owns around 40 companies apart from Macmillan and is headquartered in Stuttgart. Its interests include book, magazine and news paper publishers and new media firms. The group’s portfolio is built upon five key areas: 1. Fiction and non-fiction book publishing. 2. Education science publishing. 3. Business and finance/ national newspapers. 4. Regional newspaper and printing. 5. Electronic media. Industry Profile Book Publishing is the industry concerned with the production of literature or information – the activity of making information available for public view. In some cases, authors may be their own publishers.
Traditionally, the term publication refers to the distribution of printed works such as books and newspapers. With the advent of digital information systems and the Internet, the scope of publishing has expanded to include websites, blogs, and the like. As a business, publishing includes the development, marketing, production, and distribution of newspapers, magazines, books, literary works, musical works, software and other works dealing with information.
Some of the major players are: Macmillan India ltd Oxford press Himalaya publishing house S.chand publications Pearson Education Prentice hall of India pvt ltd RDSA publishers The Indian publishing community consists of over 5,000 publishers but major and organized players are few. The above mentioned are some of them. Mainly British and European publishers have driven the market so far but now US publishers are looking actively at outsourcing to India. This will have a positive impact on the current export market estimated to be around Rs 8,000 million (US$ 181.82 million) (Source: Industry estimates)
3. RESEARCH DESIGN
3. RESEARCH DESIGN
• Hypothesis: Design of human resource information system with reference to compensation and benefits are highly effective in the organization.
Population: The study consists of over 150 employees.
Sample size: Selected sample size for the study would be 50 employees. Selected on a systematic sampling frame work.
Statistical technique: Suitable statistical technique will be used for the Analysis of the data.
Scope of the study: Human Resources Management (HRM) is the attraction, selection, retention, development, and utilization of labor resource in order to achieve both individual and organizational objectives. Human Resources Information Systems (HRIS) is an integration of HRM and Information Systems (IS). HRIS or Human resource Information system helps HR managers perform HR functions in a more effective and systematic way using technology. It is the system used to acquire, store, manipulate, analyze, retrieve, and distribute pertinent information regarding an organization's human resources. A human resource information system (HRIS) is a system used to acquire, store, manipulate, analyze, retrieve, and distribute pertinent information about an organization's human resources.
Limitations of the study: 1. The time period taken for the study is only one month, this is very less time to conduct detailed study about the HRIS 2. The organization should be cooperative enough to do the study. 3. The support from clients and vendors should be cooperative during the survey. Objectives of the study: The principle objectives of the study are to analyze the following aspects such as; • • • • To know about human resource information system. To design a human resource information system with reference to compensation and benefits. To analyze and interpret the data. To find out the recommendations.
4. ANALYSIS AND INTERPRETATION OF DATA
4. ANALYSIS AND INTERPRETATION OF DATA
HUMAN RESOURCE INFORMATION SYSTEM
An HRIS is a management system designed specifically to provide managers with information to make HR decisions. 1. It is a management system and is used specifically to support management decision-making. 2. The need for this kind of information has increased in the last few years, especially in large and/ or diverse companies, where decision-making has been moved to lower levels. 3. Large companies generally have the advantage when it comes to HRIS’s, the cost to develop an HRIS for 200 hundred people is usually close to that for 2000 people, so it is a better investment for large companies, larger companies tend to have systems that have a fair degree of customization. HRIS systems include the employee name and contacts information and all or some of the following: Department, job title, grade, salary, salary history, position history, supervisor, training completed, special qualifications, ethnicity, date of birth, disability, veterans status, visa status, benefits selected etc. HRIS systems include reporting capabilities. Some HRIS track applicants before they become employees. Some HRIS systems are interfaced to pay roll or other financial systems.
1. Personnel. 2. Position control. 3. Position clarification. 4. Affirmative action. 5. Automated increase processing. 6. Flexible and traditional benefits administration. 7. Salary survey. 8. Pool accounting budgeting. 9. Salary base component of the budget preparation facility.
HRIS offers a wide array of workforce management tools. From recruiting, through
compensation, performance and benefits administration, and on to COBRA.
JOB AND SALARY HISTORY- tracks dates, rates, locations, divisions, departments, and
salary grades. Computes and stores compo-ratios, percent-of-range, change amounts, and change percents. Also computes and stores pay period equivalents for a wide range of pay frequencies.
BENEFITS TRAKING - computes full cost for employee, employer, and dependents.
Support simultaneous prior, current, and open enrollment. Reconciles carrier statements and provide accurate benefits report.
PERFORMANCE REVIEW - automatically schedules future reviews. Multiple “next
reviews” are allowed for disciplinary and regular reviews. Batch processing speeds data entry. Batch processing supports rapid entry of course by employee of course. Thus HRIS contains every field of Human Resource. This helps the organization in many different ways as read from above and much more.
COMPESATION AND BENEFIT Compensation is defined as a return given for the work being done. Compensation can be given in various ways. Most people think money is the only way of giving compensation. Compensation can be both monetary and non monetary. Handling compensation in any organization is the most important job. This is a very crucial process and has to be done in a very systematic manner.
A. COMPENSATION PRINCIPLES AND GOALS The principles on which the compensation system is based are: 1. Pay system aligned with the vision of the organization. 2. Pay system aligned with the organization’s strategic plan. 3. Maintenance of competitive posture. 4. Simplicity. 5. Pay aligned with contributions. 6. Encouragement of creative non-monetary reward system. 7. Fiscally responsible decentralized salary administration. 8. Open, communicated system. 9. Clear procedures.
10. Recognition of the value of the people. The procedure in which the compensation and benefits should be handled is designed in a systematic way in the later parts.
B. BENEFITS AND VARIABLE PAY Variable pay affected by factor like 1. Availability of sufficient financial resource. 2. Consistency with the organization culture.
3. Linkage with organizational objectives.
4. Clear separation from variable pay.
5. Clear communication.
6. Current updated plans.
7. Measurable performance.
Individual incentives are based on 1. Identification of individual performance 2. Independent work
3. Individual competitiveness desired.
4. Individualism stressed in organizational culture.
Bonuses are given based on the individual’s performance and company policies. Incentives are in various forms like: 1. Non-cash awards 2. Recognition
4. Executive compensation
5. Rewards of motivation etc.
An employee who is injured during the course of employment, or suffers from workrelated mental disabilities, as well as occupational diseases, is eligible for workers compensation benefits. These benefits include weekly compensation benefits. These benefits include weekly compensation for lost income during the period the employee cannot work.
RETIREMENT SECURITY BENEFITS
1. Disability retirement benefits 2. Health care for retirees
3. Pension plans
HEALTH CARE BENEFITS
This will include medical and dental
1. Leave benefits 2. Vacations and holidays
3. Recreation programme
C. ANALYSIS AND DESIGN OF COMPENSATION AND BENEFITS The objective of this project is to study the existing compensation and benefits module at Macmillan and improving on it so as to atomize it in the proper manner. For this objective to be achieved I had done a lot of exploratory research by browsing the Internet, reading books, getting to know the in and out of compensation and benefits. This involved studying every feature of the module. I had done a research by preparing the questionnaire and interviewing the concerned person to get the various inputs in a compensation management and benefits modules. The features covered various points like 1. Compensation philosophy. 2. Compensation policies. 3. Their grading system. 4. Job evaluation method. 5. Broad banding. 6. Salary structure. 7. Individual compensation statistics. 8. Variable pay. 9. ESOPs. 10. Various kinds of benefits. 11. Pay policies.
DESIGN OF COMPENSATION AND BENEFITS MODULE
COMPENSATION PRINCIPLES AND GOALS
The principles on which the compensation system is based are: 1. Pay system aligned with the vision of the organization. 2. Pay system aligned with the organization’s strategic plan. 3. Maintenance of competitive posture. 4. Simplicity. 5. Pay aligned with contribution. 6. Encouragement of creative non-monetary reward system. 7. Fiscally responsible decentralized salary administration. 8. Open, communication system. 9. Clear procedures. 10. Recognition of the value of people.
A. COMPENSATION PHILOSAPHY Macmillan’s compensation program provides salary and benefits that are competitive with the external labor market in order to attract, retain and motivate a diverse, talented and effective staff. The pay program recognizes each staff member’s value and contributions by tying increases in compensation to job performance, and particularly by rewarding individuals who meet high performance standards, and differentiating between superior performers and others. COMPENSATION APPORCH Macmillan follows a traditional approach, which offers certain advantages in specific competitive situations. This very rational and logical approach, which identifies task and responsibilities, which is then used to decide the jobs, that is valuable. Value of each job is then used to establish a pay range that reflects a person’s profession as he/she grows and presumably gets better at the job.
INTERNALLY CONSISTENT COMPENSATION STRUCTURE
Level 5 Level 4 Level 3 Level 2 Level 1
S a l a r y
Degree of Responsibility
Chart No. 1
LEVELS Level 1 Office boys Level 2 Assistants and supervisors Level 3 Officers and executives Level 4 Managers and assistant managers Level 5 Senior management
RESPONSIBILITIES Operational: Filing, greeting guests, answering telephones. Operational: Planning and setting agendas, proper supervision. Operational: Team management, decision making. Operational: Decision making for projects, delegation, leadership. Strategic: Setting of policies and procedures, allocation of funds.
Table No. 1
Note: Level 1 is the jobs with the least responsibilities and level 5 is the one with maximum responsibilities.
B.COMPENSATION ADMINISTRATION PROCESS
Internally Consistent pay Structure
Job Analysis (Job description, Job Specification)
Implementation, Communication, Monitoring.
Chart No. 2 C. JOB EVALUATION TECHNIQUE
This can be done by point method. This is one of the most widely used methods. 1. Break down jobs in to various compensable factors and place weights or points. 2. A compensable factor identifies a job value commonly present throughout a group of jobs.
JOB EVALUATION POINT TABLE
Factor 1) Know- how Functional Expertise Managerial Skills Human Relations
2)problem solving Environment Challenges 3)Accountability Freedom to act Impact of the end Result Magnitude
Table No. 2
COMPENSABLE FACTOR OF THE JOB EVALUATION
KNOW – HOW
Functional Expertise: The amount of practical, specialized, or technical
Managerial Skills: The ability to make any activities and functions work
well together. Have more responsibilities than the superiors. Decision making for various projects. 3. Human Relations: Requirement for skill in motivating people.
Environment: The degree of freedom with which the thinking process is
used to achieve job objectives without the guidance of standards, direction from others. 2. Challenge: The type of mental activity involved; the complexity abstractness or originality of thought required.
Freedom to Act: Relative presence of personal or procedural control and
guidance; determined by answering the question, how much freedom the jobholder to act independently? 2. Impact of Result: Impact of the job in terms of money, a determination of
weather the job has a primary effect on end or results have instead a sharing, contributory, or remote effect. 3. Magnitude: A measure of the sales, budget, rupee value of purchases of
value added, or any other significant figure in terms of money related to the job.
JOB EVALUATION QUESTIONNAIRE Name of employee/id: Department/Location: Job title :
Purpose and objectives Please give a brief statement of the purpose of your current job and agreed objectives for the year (if appropriate)
Main objectives List in outline only and indicate the approximate percentage of time spent on each activity or frequency (e.g. daily, weekly, monthly, etc).
Knowledge and skills a) What are the minimum formal qualifications required to do this job?
b) With those qualifications, how much relevant work experience is required to perform the job activity?
c) Give examples of the skills, knowledge and /or expertise you consider are required to perform the job effectively.
Problem solving (fact finding, analysis, initiative, originality, creativity) Give examples of the range of problems and issues you have had to deal with in the last 12 months. What procedures or other guidance is available to assist you? Indicate the frequency with which these problems arise.
Decisions a) Own decisions
b) Advising others( outside your area of work i.e. people not managed by yourself)
Impact of decisions What contribution would you say your job makes to the effective running of the organization?
What are the potential consequences of error? Please give examples.
Additional information (optional) Please add any additional information points you wish to make (not covered elsewhere)
Signature of the employee
signature of HR
PROCESS OF JOB EVALUATION
1. Compassable factors are chosen (explanation in the preceding page) 2. Scales reflecting each different degree within each factor are defined.
Examples: Know-how 1st degree: just knowing the basic skills of doing the job given. 2nd degree: knowing the job in little more depth with additional skills. 3rd degree: knowing everything about the job and handling it perfectly.
3. Now assign points to degrees. 4. Relative importance of each factor must be decided on and it is allotted the maximum number of points. 5. Once the highest degree of each factor is given a point allocation reflecting its importance, the lower degrees are assigned proportionately lesser point values.
Macmillan can do a pay survey, which gives information of them compensation rates for workers performing similar jobs in other organizations. Many surveys are available online.
ESTABLISHING PAY STRUCTURE
Job Evaluation Results
Identify Different pay structures
Revise Pay Grades and Ranges as needed
Establish Pay Grades
Compute pay Ranges
Compute Current pay to pay ranges
Chart No. 3
JOB EVALUATION RESULTS
Once the job evaluation points are determined we can develop a market line by plotting the points against the pay survey rates. With this graph we can find out the distribution of wages across the industry.
Market line E D Salary C B Min A Pt 1 Chart No.4 Pt 2 Pt 3 Pt 4 Pt 5 Pt 6 Pt7
Job evaluation points
Levels Level 1 Level 2
Point Range Below Pt 1 Pt 1 - Pt 3
Level 3 Level 4 Level 5 Table No.3
Pt 3 - Pt 5 Pt 5 - Pt 7 Pt 7 above
PROCESS OF JOB EVALUATION
1. Define the pay line linking it to job evaluation points. 2. Draw a graph with salary on horizontal axis and job evaluation points on vertical axis. 3. The points on the line will represent the midpoints of the salary. 4. Each range of points has a maximum, minimum and midpoint. 5. The spread around the midpoint may vary 6. The percentage spread is frequently greater for higher-level positions. 7. The top performing employees will be in the maximum range.
D. SALARY STUCTURE Name of employee /Id: Department name / Location: Compensation details (All figures in INR) Date:
BASIC DEARNESS ALLOWANCE HRA CONVEYANCE COST OF LIVING ALLOWANCE SPECIAL ALLOWANCE ATTENDANCE PAY SHIFT ALLOWACE SUB TOTAL STATUTORY BONUS: 20% OF BASIC VARIABLE PAY SUB TOTAL TOTAL LESS: PROVIDENT FUND GRATUITY INCOME TAX FESTIVAL TAX INSUARENCE MISCELLANEOUS DEDUCTIONS SUB TOTAL GROSS CASH COMPENSATION Table No. 4
No. of Working Days in a month: No. of Days Present: No. of days Absent:
1. Note: All the benefits are as per company’s policies, which are subject to change from time to time. 2. Variable pay is not a part of your guaranteed compensation and will be paid based on criteria determined by the company from time to time.
E. COMPENSATION STATISTICS
(For individual employee) Employee Name: Employee Id: Dept/ location:
Hours worked per week
Months worked per year Weeks worked per year Hours worked per year Hourly rate Annual salary Number of pays per year Salary per pay
Compensation as a % of total turnover Total compensation * 100 Total turn over
Compensation as a % of cash inflow Total compensation * 100 Total cash inflow
F. VARIABLE PAY Macmillan has variable pay incentives in order to 1. Link individual performance to business goals. 2. Reward superior performance.
Variable pay are affected by factors like 1. Availability of sufficient financial resources. 2. Consistency with the organization culture. 3. Linkage with organizational objectives.
4. Clear separation from variable pay. 5. Clear communication. 6. Current, updated plans. 7. Measurable performance.
Individual incentives are based on 1. Identification of individual performance. 2. Independent work. 3. Individual competitiveness desired. 4. Individualism stressed in organizational culture.
G. PROPOSED INCENTIVES
Cash and non cash awards: These can be in the form of both cash and non cash awards. This would be given according to their performance. This can be referred from the module of performance management system. Non cash awards can be gift certificates, travel awards etc. Recognition awards: This recognizes individual employees for their performance or services. It includes awards like the “best employee of the year”, “best employee of the month”. ESOP: This allows employee the right to purchase a fixed number of shares of the company stock at a specified price for a limited period of time. The stock markets
price exceeds the exercise price; employees can exercises the option and sell the stock at a profit. Executive compensation: This includes supplemental benefits, long term incentives, annual bonuses, executive salaries. Their benefits may take several forms including traditional retirement, health insurance, vacation and others.
2. CASH AND NONCASH REWARDS FOR THE MOTIVATION
Pre-tax thrift-saving programs: this is to help the employee to know ways of minimizing his or her tax by investing properly. Recreational programs: this would include parties on various occasions, personal development programs etc. Gift vouchers: this includes sodex ho passes and gift coupons for stores with which the company has made a tie up with. Sponsoring for further education: elaboration investment made on star performer and solid citizens to increase potential. Personal financial planning: this includes tax planning, budgeting etc. Loans: this includes housing loan, personal loans, car loan. Tuition refund: reimbursement of money of the employee has invested in further studies for the benefit of his job.
Profit sharing: this is a like bonus where the employees get a little percent of the profit earned. Company car: employees can make use of the company car when necessary. Flex time: allowing the employees to work whenever they are comfortable. Extra vacation: apart from the normal vacation periods, this allows employee to take a little extra time as a reward of this performance. Child care: taking care of the children of the employees when they are working.
H. STAFF RECOGNITION AND INCENTIVE AWARD
Certificate of cash award
Congratulation Mr/Ms award of Rs in the field of Keep it up…. Best wishes.
you have won cash for your very good performance for the year 2006-07.
Managing Director/HR/Department head
Note: This payment will be processed on the employee’s next pay schedule subsequent to the receipt of this document by the concerned department. The award will be subjected to all taxes.
STAFF RECOGNITION AND INCENTIVE AWARD
Certificate of non cash award
you have won an Award for your very good performance in the
Field of Keep it up… Best wishes
for the year 2006-07.
Managing Director/HR/Department head
Certificate of recognition
Congratulation Mr/Ms Have been awarded the title of Your very good performance in the field of For the year 2006-07.
Keep it up…. Best wishes.
Managing Director/HR/Department head
BENEFITS This is a form of indirect compensation. Benefits can be of many types. Each of them is explained below.
Worker’s compensation This provides benefits to people who are injured on the job. Report of accident/injury Note: This form has to be duly signed by the employee and has to be submitted to the concerned department. To be filled in after the recovery of the employee. Injured employee: Department:
Employee ID: Date of injury: Give details of injury/accident Time:
Were there any witnesses to the accident? If yes please provide name, address and phone number.
Did injured employee see doctor? If yes furnish details.
What type of treatment was received?
Has injured employee lost time from work? If yes when did lost time begin?
Has employee returned to work? If yes, when did he return?
Name of the supervisor: Signature of the supervisor
Date: Employee signature
I. RETIREMENT BENEFITS
RETIREMENT SECURITY BENEFITS
This would include 1. Disability retirement benefits 2. Health care for retirees 3. Pension plans
HEALTH CARE BENEFITS
This would include 1. Medical and dental
This would includes 1. Leave benefits 2. Vacation and holidays 3. Recreation programs
DISABILITY RETIREMENT BENEFITS
1. Indicate your pension fund: 2. Employee name/ Id: 3. Date of birth: 4. Marital status: 5. Address: *single *married
6. Home phone:
7. Work phone: 8. E-mail address:
Disability retirement information 9. Retirement date: 10. Type of disability retirement: *ordinary disability *accidental disability Application must be filed within five years of date of accident. 11. Date of accident: 12. Has a claim been field for workers compensation? *yes *no
13. I declare that I am incapacitate for further service as a
Due to the following reasons:
14. Only for accidental disability Describe the accident(s) and list any witness to it.
15. Salary information – (ordinary disability only) Were your last three years of service also the years during which you earned the highest salaries? *yes *no
(If no, list the three fiscal years (July – June) in which you earned the highest salaries. Year 1 Year 2 Year 3
16. Spouse name: (If you are naming a domestic partner, submit a photocopy of your certificate of domestic partnership along with this application)
17. Spouse address:
18. Choose a beneficiary option Maximum Other option
(Maximum: all the retirement benefits will go to the concerned person and not to any beneficiary and after his/her death, no more retirement benefits would be given to anyone) (Other option: give a name of a beneficiary who would receive the benefit)
19. Name of beneficiary: (only if the other option is chosen)
20. Relationship: 21. Birth date:
Signature of the employee
Signature of the HR
RETIREMENT HEALTH CARE BENEFITS
Name of the employee/Id: Location / department: Date of birth: Marital status: Single Address: Married
Year of retirement:
Do you already have the health insurance? Yes No
If No I wish to be covered under: Name of the primary Physician: I do not wish to be coved under any of the medical plans for the following reasons: (See instructions on declining or waiving coverage) I have coverage under my spouse – spouse’s public employer
I have coverage with another employer- list employer
Other (Give Reason)
3 B. Level of coverage (check one) *Single *Member & Spouse *Family *Parent/ Child(ren)
Dependent Information Name: Relationship:
Signature of employee manager
VACATION/ LEAVE BENEFITS
signature of HR
Name of the employee/ Id: Location/ Department: Date of Birth: Leave Designation: *Family and Medical leave *work related injury/ illness *Neither Paid Leave Vacation
Vacation in place of sick leave Maternity leave Compensatory time Sick leave *Illness/ injury *Medical appointment
Signature of Employee Unpaid Leave *Medical *Personal
Signature of HR head
Unpaid time off: (10 or fewer consecutive working days) Beginning and ending dates Unpaid leave of absence: (more than 10 consecutive working days) Beginning and ending dates Last date worked Last date in active pay status
Additional information: (reason for absence, etc.)
Necessary documents should be provided in case of sick leaves for more than 3 days. I understand that approval of this request is contingent upon the availability of adequate leave balances. Falsification of this application for leave or of the supporting documentation is grounds for disciplinary action, up to and including dismissal.
Employee signature: DATA ANALYSIS AND INTERPRETATION
There was a small survey conducted on the basis of compensation and benefit modules which I have been developed for the company. The main objective of the survey is to get the feed back from the employees on the developed modules.
Opinion of the employees YES 90%
Opinion of the employees NO 10%
100 80 60 40 20 0 YES NO YES NO YES NO
Drawn from the sample we can come to the decision that 90% of the employees are satisfied and 10% of the employees are not satisfied with compensation policies.
Opinion of the employees YES 87%
Opinion of the employees NO 13%
90 80 70 60 50 40 30 20 10 0 YES NO YES NO
Drawn from the sample we can come to the decision that 87% of the employees are satisfied and 13% of the employees are not satisfied with variable pay techniques.
ANALYSIS OF COMPENSATION AND BENEFIT
Opinion of the employees YES 95%
Opinion of the employees NO 5%
Drawn from the sample we can come to the decision that 95% of the employees are satisfied and 5% of the employees are not satisfied with analysis of compensation and benefits.
Opinion of the employees YES 80%
Opinion of the employees NO 2O%
80 60 40 20 0 YES NO YES NO
Drawn from the sample we can come to the decision that 80% of the employees are satisfied and 20% of the employees are not satisfied with compensation philosophy.
JOB EVALUATION TCHNIQUE
Opinion of the employees YES 83%
Opinion of the employees NO 17%
100 80 60 40 20 0 YES NO YES NO YES NO
Drawn from the sample we can come to the decision that 83% of the employees are satisfied and 17% of the employees are not satisfied with job evaluation technique.
COMPENSATION ADMINISTRATION PROCESS
Opinion of the employees YES 83%
Opinion of the employees NO 17%
Drawn from the sample we can come to the decision that 83% of the employees are satisfied and 17% of the employees are not satisfied with compensation administration process.
Opinion of the employees YES 81%
Opinion of the employees NO 19%
90 80 70 60 50 40 30 20 10 0 YES NO
Drawn from the sample we can come to the decision that 81% of the employees are satisfied and 19% of the employees are not satisfied with salary structure.
Opinion of the employees YES 80%
Opinion of the employees NO 20%
100 NO 50 YES 0 YES NO
Drawn from the sample we can come to the decision that 80% of the employees are satisfied and 20% of the employees are not satisfied with compensation statistics.
Opinion of the employees YES 77%
Opinion of the employees NO 23%
80 60 40 20 0 NO YES
Drawn from the sample we can come to the decision that 77% of the employees are satisfied and 23% of the employees are not satisfied with variable pay.
Opinion of the employees YES 86%
Opinion of the employees NO 14%
Drawn from the sample we can come to the decision that 86% of the employees are satisfied and 14% of the employees are not satisfied with incentive plan.
Opinion of the employees YES 80%
Opinion of the employees NO 20%
160 140 120 100 80 60 40 20 0 YES NO
Drawn from the sample we can come to the decision that 80% of the employees are satisfied and 14% of the employees are not satisfied with staff recognition.
Opinion of the employees YES 92%
Opinion of the employees NO 8%
100 80 60 40 20 0 YES NO YES NO
Drawn from the sample we can come to the decision that 92% of the employees are satisfied and 8% of the employees are not satisfied with retirement benefits.
5. SUMMARY OF FINDINGS, RECOMMENDATION AND CONCLUSION
5. SUMMARY OF FINDINGS RECOMMENDATION AND CONCLUSION
Macmillan follows a conservative policy having not much variable pay
There is no lead, lag and match policy; there is a system of payment policy
in place. 3. 4. 5. 6. 7. 8. 9. 10. 11. It is confidential. Only the authorized personnel can have access to it. No change can be made in the policy other than authorized authority. There are established pay grades and pay ranges. Each employee has a basic pay, which is paid monthly. The basic pay depends on the level of job evaluation. There is approximately a 20% bonus, which is given every year. Excellent performance and loyalty are rewarded accordingly. There are both monetary and non-monetary benefits, which are given. The retirement benefit plan is in place. RECOMMENDTIONS 1. To have a successful incentive compensation plan, an employer should establish the plan with ongoing communication, manage the performance to ensure that the skill needed for organizational success are being applied, evaluate performance so that reviews are informative and link the assessment to financial rewards in a consistent manner. 2. Pay for performance, or incentive compensation, is more effective with an accurate and relevant evaluation process.
3. Compensation management and performance should always be tied closely together and be aligned with company goals. 4. Any compensation changes should be communicated properly to employees so that they know how they will be affected and are less likely to spread rumors around the office. 5. Effective compensation management relies on the company’s existing philosophy and the context for change. 6. Enterprise compensation management (ECM) technology is designed to simplify human capital planning, management and compensation decision-making. Although its initial cost is high, the return on investment (ROI) in strategic and financial results justifies the expenses. 7. To make a business case for an ECM solution, one should identity an executive sponsor, pin point existing compensation inefficiencies, quantify hard dollar productivity and strategic benefits, and identify and prioritize the functional requirements and timelines for development.
For years, the purpose of the performance review has been to allocate annual salary increases. While this process has generally been handled manually, it also has seen a great deal of controversy and change. Compensation is truly the biggest driver of certain types of behavior and works differently for various job groups. Incentive compensation is a great tool to drive sales and specific performance targets, whereas base compensation is a great tool for driving overall employee satisfaction and improving performance. What has been missing in all links from compensation to performance is measurement of yearover-year increases in performance and the impact that compensation has on performance. Organizations that take an interactive view of the performance management
process and ensure that compensation is just one of many outcomes, which might also include promotion, new opportunities for learning and development, and other forms of recognition, understand the importance of integrating performance and HRIS to measure total compensation and rewards. Organizations that still rely on a manual, semiautomated process as a once-a-year, meet-the-requirement tool will soon realize that the war for talent and staffing shortages will make it necessary to approach pay-forperformance as an integrated process. Although almost all HR managers understand the importance of HRIS, the general perception is that the organization can do without its implantation. Hence only large companies have started using HRIS to complement its HR activities. But HRIS would be very critical for organizations in the near future. This is because of a number of reasons.
• • • • •
Large amount of data and information to be processed. Project based work environment. Employee empowerment. Increase of knowledge workers & associated information. Learning organization
The company’s existing database. Various books of compensation and benefits. Magazines, journals etc. Human Resource management books. www.macmillanindia.com
QUESTIONNAIRE I am Rajesh V.D student of Kristu Jayanti College doing the survey on HRIS with reference to compensation and Benefit management, to fill full the parietal requirement of Master in Business Administration for Bangalore University. To find out the employees different opinion about compensation and benefit modules questionnaire will be developed on the basis of which I have been developed compensation and benefit modules in the organization. It will greatly influence on the further development on this, also out come of this important to draw proper recommendation and conclusions.
Questionnaire on compensation and benefits
Name of the employee: Designation: No of years of experience:
1. Is module on compensation policy is satisfactory? Yes No
2. Is development of module on variable pay is satisfactory?
3. Is the analysis of compensation and benefits is satisfactory? Yes No
4. Weather the compensation philosophy is satisfactory to the employees? Yes No
5. Percentage of employees those who satisfactory and un satisfy with job evaluation technique?
6. Is compensation administration is satisfactory to the employees? Yes No
7. Weather the salary structure is satisfactory to the employees? Yes No
8. Opinion about the compensation statistics. Yes 9. Is variable pay is satisfactory? Yes No No
10. Opinion of he employees about incentive plan module. Yes No
11. Is module on staff recognition is satisfactory? Yes No
12. Weather module on benefits satisfies the employees?