Southeast University

Southeast Business School

(Final Examination)
Individual

Program : Master of Business Administration

Name : Abhi Kumar Roy
ID NO : 2020210004038
Course Title : Compensation Management
Course Code : HRM697.1
Batch : 37
Submission Date : 12-June-2021

Submitted To

“Brigadier General A.K.M Iqbal, BSP”

Faculty (Adjunct)
Southeast Universtiy
Southeast Business School
 Case-1
Answer to the question no: Case-1.1

The Chief Executive Officer of my office called me to his office room at

10.30 this morning and said that, ‘Look at PS, I expect you to work very hard to
come. I believe that, right now you are mentally ready to work as a PS. Anyway,
we should do a study on Skilled Based Pay Structure. So, prepare a note with
explanations and examples using the following purposes of the Skilled Based
Pay Structure:

a) Supports the Strategy and Objectives.

b) Supports Work Flow.
c) Ensuring the plan is fair to employees.
d) Motivates Behavior toward organization Objective.

Skill based pay structure depends on what kind of skills a person has.
How many certificates he has, How many years of experience he has and How
many or what kind of training certificates he has on his job etc. The purposes of
Skilled Based Pay Structure are illustrated below:

a) Supports the Strategy and Objectives: The objectives and strategies

of companies are usually directly related based on efficiency or skills. Strategic
objectives set boundaries for what the organization should focus on in its efforts.
Creates the top tier of strategic planning framework and focuses on achieving the
vision of success. For example: In order to determine the salary of the
employees of an organization, the work strategy of that employee is observed.
Let’s say, what kind of rate strategy a worker uses to make a sweater quickly.

b) Supports Work Flow: Workflows act as a visual representation of a

step by step process that may sometimes have different outcomes depending on
the scenario. One of the main advantages of a skill based plan is that it facilitates
matching people to a changing work flow. For example: Let's say, A customer
called for support than, customer is asked contact details by automated voice
assistant than, customer waits on hold until agent becomes available than, agent
picks up and asks how they can help than, customer explains their issue than,
agent asks for clarifications and finally agent provides a solution issue to right
person. That’s it.

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 c) Ensuring the Plan is fair to Employees: The possibility of higher
salary for employees depends on their education or learning. By encouraging
employees to take responsibility for their own development, skill based plans can
bring more control over their work lives. Prejudice can play a role in determining
who is first cracked in the training required to be certified at a higher pay skill
level. For example: Rodoshi Plastic Limited Employees whose learning is very
good, their salary is very high. Suppose workers who are learning to produce
plastics have higher salaries.

d) Motivates Behavior toward Organization Objective: Person based

plans improve employee quality and behavioral expectations. It encourages
employees to take more responsibility and for the work process and results less
direction comes from supervisors. For example: Organizing sports to improve
the morale of the employees, creating a positive environment for creating a
positive mindset and arranging trips.

Finally it can be said that, Skilled Based Pay Structure These Four steps
play an important role in the progress of an employee or organization which has a
positive impact on the progress of the economy.

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 Answer to the question no: Case-1.2

a) The following is an open discussion about People flow to work:

Usually people go to certain places of work to work. When there is a good

working environment, people focus on work. All the employees are doing the
same job in the organizations but not all the organizations are giving the same
salary or bonus. The organization is achieving their goals by providing different
salaries to the employees in different situations. In this way the organization is
able to reduce their labor cost. For example: Covid-19 situation “Apollo
Hospital” has provided part time or one time hiring of nurses, ward boys and
doctors from different locations to further their activities. The Doctors from three
different sources: Regular Doctors- Regular doctors are working round the
clock in the hospital. For this, they are provided with separate rooms and various
facilities. Internship Doctors: Internship doctors do not work full time at the
hospital. They serve patients under an experienced physician for their training.
For this, they are given a one-time allowance. Call Doctors: Call doctors bring
them to the hospital if there is a very important pandemic situation. For this, they
are paid extra money. Such doctors are usually not given any bonus and extra
benefits.

Finally it can be said that, People flow to work, it is becoming possible

to achieve the goals of their organization by hiring doctors or staff according to
their needs, starting from hospitals in different situations.
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b) Workflows to the People- On-site, Off-site, Offshore are explained

below:

A way to reduce work flows to the people and a kind of salary level. At
this stage, three steps are followed:

On-Site: At the on-site level employees work under the organization or

permanently hire the organization to produce work. At this stage, the employees
take advantage of various opportunities from the organization. For example:
Bashundhara Group will make masks in their industry in Dhaka. The staff
involved in creating this masks are on-site employees.

Off-Site: At the off-site level, companies hire temporary workers to

reduce their labor costs. Through which the company achieves their goals. For
example: Bashundhara Group pays the workers for making masks in their
Dhaka industry. If the masks are made by hiring temporary workers in an
industry in Rangamati, then they can be made to work with less salary than the
workers in Dhaka and this is off-site.

Offshore: At the offshore level employees are recruited from different

places or countries according to the needs of the organization. Through this the
organization achieves their goal by paying less. For example: Bashundhara
Group set up a mask industry outside the country in Canada, and recruited
workers from Nigeria, West Timor and Myanmar, offering much lower salaries,
and this is offshore.

Finally it can be said that, On-site, off-site and offshore organizations

reduce their labor costs by recruiting workers according to their needs or wants.
Now-a-days most companies follow these steps to make a profit.

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 Case-2
Answer to the question no: Case-2

a) Maslow's Need Hierarchy Theory is explained with the following

examples:

Maslow's Need Hierarchy theory of demand is a psychological theory of

Abraham Maslow. In 1943, Maslow published his research paper, Psychological
Review, entitled The Theory of Human Motivation. This theory is explained
below:
Self-Actualization

Esteem

Social

Safety

Physiological

(Maslow’s Hierarchy Theory)

Physiological: We can also call biological needs physiological needs. At
the heart of this idea is the physical need that people have to meet in order to
survive. It is the basic human need. Biological needs have been considered as
internal motivations according to Maslow's ladder theory of needs. For example:
Food, water, air, sleep and clothing etc.

Safety: When a person's biological needs are relatively satisfied, he or she

needs security. The idea of security plays a dominant and leading role in his
conduct. This demand is most seen in children. Because, they are need to be safe.
If a person does not feel safe in an environment, they will seek safety before
going to a higher level of survival. For example: Personal security, mental
security, financial security and satisfaction etc.
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Social: After meeting biological and security needs, the third level of
human need is interpersonal and involves feelings of love and oneness.
According to Maslow, no matter how big or small these rings are, people want to
feel a sense of recognition and acceptance within these social rings. For
example: Family, friendship and intimacy.

Esteem: Most people need a kind of uninterrupted and stable respect in

order to get respect. This means that he will receive this honor on the basis of a
real ability or achievement. Maslow mentions two types of honor requirements.
Low and high kind of respected. For example: Self esteem, confidence and
achievement.

Self-Actualization: What a man can be, he must be. This quote is the
essence of the need for self-realization or self-establishment. This level of
demand requires that a person realize his full potential. Maslow tells him to
aspire to what a person can achieve, to be all that a person can be. For example:
Acquisition of partners, adoption of guardianship, use and development of talents
and skills to follow the goal.

b) I think there is a comparative classification difference between me and a

cleaner from this company. Here is my answer with the relevant explanation:
In fact, I receive a salary of Tk. 80,000 per month. I am very satisfied. I have a
cleaner and services just like I do with the company's office services. The
cleaner does a variety of office work. Such as: keeping the files in order and
providing various services according to the needs of the officers. In the same
way, I also provide services from different jobs of a company. The only
difference is that a cleaner works at the lower level and I work at the middle
level of the office. I want to be respected in society. I can reach to the self
actualization level. In the next stage, the cleaner the only get salary Tk. 15,000
all benefits. Within his limited salary he can hardly satisfy his physiological
needs such as food, water and house etc. he will always remain in strategic
condition to meet up there kind of basic needs. As a result, he cannot higher
stage Maslow’s Hierarchy of needs. His position in the lower level of the
Maslow’s hierarchy of needs. Finally it can be said that there will higher
distance the Cleaner and me in the Maslow’s Hierarchy of needs.

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c) The following is a hand-drawn diagram of the classification and explains
the position of me and the cleaner in that figure:

In this theory a cleaner is in the physiological stage. This is the basic

need of a cleaner. It is a basic human need. A lot of people are born
automatically. Biological needs have been considered as internal motivations
according to Maslow's Hierarchy theory of needs. According to Maslow's theory,
humans are forced to meet these biological needs.

On the other hand, I am an HR Director in the Esteem stage of Maslow

Hierarchy Theory. Most people need a kind of uninterrupted and stable respect in
order to get respect. Which at this stage, I have come to accept. This stage
requires respect from others, which may include dignity, recognition, fame,
prestige, and attention. The higher version of honor is the need for self respect,
which may include strength, efficiency, authority, self-confidence, liberation and
freedom.

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 Case-3
Answer to the question no: Case-3.1

So far we have been giving profit shares to Leather Engineer Grade-3

(LE-3), who are the backbone of this company. We are willing to introduce merit
pay or lump-sum bonuses for all LE-3s instead of giving profit shares. Merit pay
will be profitable for the company only in case of financial involvement.
Because, if the merit pay is good, the employees of the company do not show
the attitude of changing jobs in any other company. It provides bonuses for
employees who perform tasks effectively according to easily measurable criteria.
Merit pay can be used to keep in touch with the employees and also to know the
status of the employees of the company. Above all, the company's employees can
be retained.

The following is a comparative comparison of merit pay versus lump-

sum bonus of an LE-3 for a period of eight years:

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 Answer to the question no: Case-3.2

a) The following is the Unit of Production per Time Period and the Time
Period per Unit of Production:
Unit of Production per Time Period: The unit of production method is a
method of calculating the depreciation of an asset over time. This is effective
when the value of a property is more closely related to the number of units it
produces than to the years of its use. For example: A garment worker can sew
10 shirts per hour. If you sew 10 shirts you will get Tk. 1,000 just like if you sew
20 shirts you will get Tk. 2,000.

Time Period per Unit of Production: The time period per unit of
production is used to determine how long it takes to make a product. This method
works through standard hour plan. For example: It can take up to 30,000 hours
to build a ship. Then how many workers will be able to build the ship in this time
if they work together. This is the time period per unit of production.

b) The following is an entrepreneur list highlighting two advantages over

Straight Peace Work rate and two disadvantages over Merrick Peace Work
rate:

Two advantages over Straight Peace Work rate:

1. Workers are paid according to their merits because distinction is made
between efficient and inefficient workers. An efficient worker can earn
more wages.
2. Inefficient workers are motivated to become efficient and earn more wages
by producing more.

Two disadvantages Merrick Peace Work rate:

1. The quality of the output will suffer because workers will try to produce
more to earn more wages. Strict supervision and inspection is necessary to
ensure the quality of the goods produced.
2. Workers have the fear of losing wages if they are not able to work due to
some reason.
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Case-4
Answer to the question no: Case-4.1

a) If I do not practice the performance appraisal method in my

organization, here is a summary of any problems I may have with the
compensation decision:

1. Firstly, If the Performance Appraisal procedure is not followed, the skills

and experience of the employees will not be known and the compensation
decision will not be taken properly.
2. If this method is not followed, it will not be possible to determine the
performance and judgments of the employees. Which is causes problems
when making a compensation decision.
3. Thirdly, If the officers and employees do not determine the compensation
properly, the tendency to move to another organization increases.
4. If performance appraisal is not followed, it will not be possible to
determine who is doing well or who is not.
5. Finally, it can be said that if compensation decision is not taken properly
the employees remain unhappy and there is a steady flow in the progress of
the organization.

b) The following are two advantages and disadvantages of ‘Peer’ as Rater in

360 degree performance Appraisal:

Two advantages of "Peer" as a rater in 360 degree performance Appraisal:

1. Creates awareness of strengths and weaknesses. Through which it is
known that weakness can be reduced by doing what works where.
2. Through this improves productivity and work relationships. Through
which a good relationship is formed with the staff and officers.

Two disadvantages of "peer" as a rater in 360 degree performance

Appraisal:
1. Through this the process of taking time increases. Due to which the
speed of work decreases.
2. There is a lack of trust among people who conduct 360 degree
performance appraisal.
 10

Answer to the question no: Case-4.2

Mr. Shibli, the Chief Executive Officer of my company, told me that our
factory in Dubai would open next month. Currently, our best HR Director is Mr.
Asad of Manikgonj factory. We decided to keep him in Dubai. But, other
company is trying to catch him. Our directors are well paid here in Bangladesh
but it is not enough to survive with wife and children in an expensive city in
Dubai. We are now paying Tk. 3,20,000, per month. I had an informal
conversation with him in the morning and found out that his monthly expenses in
Bangladesh are as follows: Taxes: Tk. 25,000, Housing: Tk. 80.000, Children
Education: Tk. 40,000, Goods and Services: Tk. 50,000, Sending to his poor
relatives: Tk. 35,000, Sending to his father: Tk. 40,000, Reserve: Tk. 50,000.
The following is an assessment of the above information and
calculates how much monthly compensation should be paid to Mr. Assad in
Dubai. The balance sheet method used to determine this is:
 11

The proportions set for each of the components in the set to reflect
consumption patterns in the country for a person at that salary level with that
particular family pattern. They are not actual expenditures. These norms are
based on surveys conducted by consulting firms. Using the norms is supposed to
avoid negotiating with each individual although substantial negotiation still
occurs.
Let us assume that the norms suggest that a typical HR Director with a
spouse and children, earnings Tk. 3,20,000 in the Bangladesh, will spend Tk.
25,000 per month on taxes, Tk. 80,000 on Housing, Tk. 40,000 Children
Education, Tk. 50,000 Goods and Services, Tk. 35,000 Sending to this poor
Relatives, Tk. 40,000 sending to his father and Tk. 50,000 reserve per month.
The next building block is the equivalent costs in the host country where the
assignment is located. Similar housing costs Tk. 40,000 in the host country, the
expatriate is expected to pay the same Tk. 80,000 paid in the Dubai and the
company pays the employee the difference. An extra Tk. 40,000 per month. They
extra children education Tk. 10,000 and goods and service Tk. 10,000. In the
illustration, the taxes, housing, children education, goods and services, sending to
his poor relatives, sending to his father and reserve components are all greater in
the host country than in the home country. The expatriate bears the same level of
costs as at home. The employer is responsible for the additional costs.

--------------------------------THE END-----------------------------
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