A STUDY ON

“CURRENT TREND IN COMPENSATION MANAGEMENT”

By

J.BHARGAVI

(140610672090)
Project Submitted in partial fulfillment for the award of the degree of

MASTERS OF BUSINESS ADMINISTRATION

By

Osmania University, Hyderabad-500007

BHAVAN’S VIVEKANANDA COLLEGE OF SCIENCE HUMANITIES AND

COMMERCE

SAINIKPURI, SECUNDRABAD-94

(AFFLIATED TO OSMANIAUNIVERSITY)

2010- 2012
 DECLARATION

I, J.Bhargavi hereby declare that this project report entitled

“CURRENT TREND IN COMPENSATION MANAGEMENT”

submitted by me to the Department of Business Management, O.U.,

Hyderabad, is a bonafide work undertaken by me and it is not been

submitted to any other university or institution for the award of any

degree in Masters Of Business Administration (MBA)..

Date: (J. BHARGAVI)

 CERTIFICATION

This is to certify that the Project Report title the study on CURRENT TREND IN

COMPENSATION MANAGEMENT, submitted in partial fulfillment for the award of

MBA Programme of Department of Business Management, O.U. Hyderabad, was carried

out by J. BHARGAVI under my guidance. This has not been submitted to any other

University or Institution for the award of any degree/diploma/certificate.

Name and address of the Guide Signature of the Guide

 ACKNOWLEDGEMENT

On the completion of my project work, I would like to offer my

deepest gratitude to all those notable people without whose help and

guidance. I would not have been able to present this project work.

I like to express my sincere thanks and gratitude to Mr.Dr. N. S.

Chakravarthy, internal guide for acting as my mentor by providing

useful insights and without whose guidance this project wouldn’t have

taken shape.

I would also wish to thank Dr.Y.ASHOK, Principal;

Dr.Chakravarthy,Head of Department; Mr. Anand reddy, Course

Director; Mr. Venu madhav, Lecturer and faculty of department of

management studies-BhavansVivekananda College for equipping me

with required managerial and analytical skill and imbibing in me the

organizational values.

J. Bhargavi
CONTENTS PAGE NO:

Chapter 1: INTRODUCTION 1-6

1.1 NeedFor The Study

1.2 Scope Of The Study

1.3 Objectives of the Study

1.4 Limitations Of The Study

1.5 Methodology Of The Study

Chapter 2: THEORETICAL ASPECT OF TREND 7-20

IN COMPENSATION MANAGEMENT

2.1 Compensation Management

2.2 Compensation, its factors and its Evolution

2.3 General components of Compensation system in India

2.4 Journal review

Chapter 3: SYSTEM PROFILE 21-43

3.1Employment in India

3.2 Regulatory framework of compensation in India

 3.3 Executive compensation in India

Chapter 4: DATA ANALYSIS & INTERPRETATION 44-73

Chapter 5: FINDINGS, CONCLUSION & SUGGESTIONS 74 - 76

BIBLIOGRAPHY 77-79

APPENDIX 80-84
 LIST OF TABLES
Serial No Table Page No

3.1 Expected Employment Increase in Different Sectors 26

3.3.1 Percentage of Executives in Range 40

Percentage of Executives in Annual Salary Range by Operating

3.3.2 Budget Size 41

3.3.3 Socio-Economic Status 42

  3.3.4 Executive age  42

 3.3.5  Executive gender 42

3.3.6   Executive range 43

  3.3.7  Country of origin 43

 3.3.8  Highest Education level 43

4.1 Pay system 44

4.2 Components of base salary 45

4.3 Ratio of fixed and variable pay 47

4.4 Salary excluding bonus 48

4.5 Non cash benefits 49

4.6.1 Rating of Housing benefit 50

4.6.2 Rating of Medical facillities 51

4.6.3 Rating of Retirement benefit 52

4.6.4 Rating of Day care benefit 53

4.6.5 Rating of Educational Reimbursement benefit 54

4.6.6 Rating of Sick leaves 55

 4.6.7 Rating of Cell phones benefit 56

4.6.8 Rating of Laptop benefit 57

4.6.9 Rating ofSocial security benefit 58

4.6.10 Rating of Insurance benefit 59

4.6.11 Rating of Private use of office vehicles 60

4.6.12 Rating of Food benefit 61

4.6.13 Rating of Loan benefit 62

4.6.14 Rating of Uniform benefit 63

4.6.15 Rating of Festival bonus 64

4.6.16 Rating ofVacation pay 65

4.6.17 Rating of Travelling expenses 66

4.6.18 Rating of Other benefit 67

4.7 Percentage of general increase in compensation 68

4.8 Performance appraisal 69

4.9 Rewarding employees 70

4.10 Salary and Productivity 71

4.11 Compensation in attracting and retaining employees 72

4.12 Sufficiency of compensation 73

 LIST OF CHARTS

Serial
No Charts and Figures Page No

2.2.1 Evolution of modern compensation system 10

2.2.2 Maslow’s need hierarchy 11

2.3.1 General components of compensation 12

2.3.2 Indirect compensation 13

2.3.3 Incentive pay and Deffered pay 14

4.1 Pay system 44

4.2 Components of base salary 46

4.3 Ratio of fixed and variable pay 47

4.4 Salary excluding bonus 48

4.5 Non cash benefits 49

4.6.1 Rating of Housing benefit 50

4.6.2 Rating of Medical facillities 51

4.6.3 Rating of Retirement benefit 52

4.6.4 Rating of Day care benefit 53

4.6.5 Rating of Educational Reimbursement benefit 54

4.6.6 Rating of Sick leaves 55

4.6.7 Rating of Cell phones benefit 56

4.6.8 Rating of Laptop benefit 57

4.6.9 Rating ofSocial security benefit 58

4.6.10 Rating of Insurance benefit 59

4.6.11 Rating of Private use of office vehicles 60

4.6.12 Rating of Food benefit 61

4.6.13 Rating of Loan benefit 62

4.6.14 Rating of Uniform benefit 63

4.6.15 Rating of Festival bonus 64

4.6.16 Rating ofVacation pay 65

4.6.17 Rating of Travelling expenses 66

4.6.18 Rating of Other benefit 67

4.7 Percentage of general increase in compensation 68

4.8 Performance appraisal 69

4.9 Rewarding employees 70

4.10 Salary and Productivity 71

4.11 Compensation in attracting and retaining employees 72

4.12 Sufficiency of compensation 73

 Abstract

The study was done to find out need and importance of Compensation and also the

employee satisfaction with the current compensation trends.

Also to determine the compensation which offers the best value to the employees and their

family and their understanding and awareness of the current trend of compensation, and

the changes in the pay system the desire to be made.

After the study was completed, it was found out that benefits like retirement and savings,

medical insurance and life insurance and services like sick leave funeral leave,

transportation to and from work are given importance by the employees

 CHAPTER 1

INTRODUCTION
 CHAPTER 2

THEORETICAL ASPECT OF

TRENDS IN COMPENSATION

MANAGEMENT
 CHAPTER 3

SYSTEMS PROFILE
 CHAPTER 4

DATA ANALYSIS &

INTERPRETATION
 CHAPTER 5

FINDINGS & SUGGESTIONS

BIBLIOGRAPHY
APPENDIX