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Wage & Compensation Administration: Denzong Breweries Pvt Ltd1

Denzo With Mr Wag DEPARTMENT OF MANAGEMENT ng Ananya Kumar Mohanty eRutuparn & Brewer BIRLA INSTITUTE OF TECHNOLOGY Mishra, HR MBA/1075/2010 Com ies MESRA Manager Private pens Limite atio d, n Khurda Adm inist ratio n

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Acknowledgement
I express my sincere gratitude to all those people who have been associated with this assignment and have helped me with it and made it a worthwhile experience. I also extend our thanks to the various people who have shared their opinions and experiences through which I received the required information crucial for our report.

Finally, I express our thanks to all the faculty members who gave me this opportunity to learn the subject in a practical approach and Mr Rutuparn Mishra (HR Manager)who guided me and gave me valuable suggestions regarding the project report.

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Content
1. 2. 3. 4. 5. 6. 7. 8. 9. Executive Summary Introduction of Denzong A brief outline of Companys operation Administration & HR liaison Research type and method Collection of information Conduct of research through questionnaires from samples Research Findings: Major responsibilities of HR Wage & Remuneration Administration 9.1. 9.2. 9.3. 9.4. 9.5. 9.6. 10. 11. 12. 13. Job evaluation Wage and salary structure Major components of remuneration Wage determination and revision Initiatives and interventions Wage and Salary compliance with Govt Rules

Other facilities and benefits provided & their Reimbursement Suggestion and Recommendation Conclusion References

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Executive Summary
This project is an illustration of the compensation and salary administration practiced in Denzong Breweries Pvt Ltd. It contains all the information which was available as well as required for the process of exhibiting a basic frame work of the compensation structure. All the practical and theoretical experience has contributed me to complete this process with ease.

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1. Introduction of Denzong Breweries Pvt Ltd


DENZONG BREWERIES PVT LTD is a private company incorporated under Company ACT 1956 having its factory at plot No. 56, A Food Processing Park IDCO Industrial Area, Khurda, 752005, Odisha. Its head office is located at 302 VIP plaza, Andhere West Mumbai, 400053, Maharastra, India. It has annual capacity of 60000 HL of beer expandable up to 250000 HL of beer. The total Production is only for Odisha but now it expands its market to AP, Jharkhand, WB, and Chhattisgarh. This Company spreads its Area in 15.124 Acres Which has been taken from IDCO Odisha Govt. This is near to the Barunei Hill side and 25 Km far from Bhubaneswar, Capital of Odisha. It is an Unit of Yuksom Breweries Pvt ltd located at Malli Bazar, Sikkim, South 737128 which is a well established manufacturing entity of the global beverage industry. Comprehending the growing needs of quality brewery, we commenced our operations in the year 1985. It manufactures a healthy and refreshing array of Beer comprising HEMAN 9000 ULTRA SUPER STRONG BEER HIT- SUPER STRONG BEER DANSBERG RED- SUPER STRONG BEER DANSBERG 15000- SUPER STRONG BEER JUNGLE KING 12000 REAL STRONG BEER DENZONG 9000 THE STRONG BEER DANSBERG BLUE PREMIUM LAGER BEER 1.1. Quality Conformity When it comes to finest quality and healthy Beer, Yuksom Breweries Ltd. is the name to be relied upon. Quality is the prime concern of our organization, and thus we pay extensive amount of attention while brewing our range of Strong and Mild Beer. To ensure that the consumers are served with premium Beer, we have

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developed a strict quality control process with the assistance of an in-house team of "QUALITY CONTROL TEAM" They make sure that all the processes are executed with utmost care as well as in hygienic environment. We make use of fresh mountain spring-water that straightaway reaches us from the heights of Mount Kanchenjunga. Moreover, we use other supreme grade raw material such as hops, malted barley, sugar, chemicals, etc. The hops are imported from highly renowned Hop farms spread across Germany.

1.2.Robust Infrastructure Aimed at providing the world's most nutritive and zestful Beer, we are making optimal utilization of our state-of-the-art infrastructural facility. We are empowered with robustly constructed brewing facility, which sprawls across a large area in the shadow of Mount Kanchenjunga. The facility is installed with latest German brewing technology along with imported plant and machinery. We are also facilitated with advanced water treatment plants that assist us in treatment of mountain spring-water. Superior quality malted barley, hops, etc. are brewed and fermented using German made machinery, which ensures qualitative production of our array of strong beer, mild beer and more. In addition, we are also strengthened by another brewery named RHINO AGENCIES LTD. situated at Amingaon, Assam. 1.3.Competitive Edge With our strong commitment towards quality and innovative business approach, we have been able to gain a competitive edge over other market players. Some of the key factors that set us apart are as follows: Extensive industry expertise Competitively priced product range Competent team of professionals In-house quality testing facilities

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State-of-the-art infrastructural facility Safe and effective packaging solutions Wide market presence Expedite delivery of consignments.

1. A brief outline of Companys operation


Denzong Breweries Pvt Ltd produces Beer having capacity of 1,20,000 MT per annum. 1.1.Product SL No. 1 Produ ct BEER Quantity Per Annum (Hectolitre) 1,20,000 with provision for expansion

1.2.Raw Material SL NO. 1 2 3 Raw Material Malt Rice Flake/Maize Flake Sugar Max Storage Capacity 150 MT 25 MT 15 MT Actual storage (approx) 100 MT 15 MT 10 MT

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Hops Product 1.3.Substances

10 MT

8 MT

SL NO. 1 2 3 4

Substances High Speed Diesel (HSD) Furnace Oil (FO) Ammonia Carbon Dioxide

Max Storage Capacity 30,000 Ltrs 30,000 Ltrs 450 Kg 500 Kg

Actual storage (approx) 10,000 Ltrs 15,000 Ltrs 60 Kg 200 Kg

Type Over Head Tank Over Head Tank Ammonia Receiver Storage Tank

1.4.Beer - The Brewing Process What is beer? - Simply put, beer is fermented; hop flavored, malt sugared, liquid. All beer is brewed from malted grain, hops, yeast and water, although other ingredients such as fruit, wheat and spices are sometimes used. The yeast turns sugars in the malt into alcohol and the hops provide the bitter flavors in beer and the flowery aroma. The flavor of the beer depends on many things, including the types of malt and hops used, other ingredients and the yeast variety. Getting the yeast right is essential as each variety has its own distinctive effect on the beer. 1.5.Brewing Beer - Detailed Version

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To make beer, brewers use water and grain to create a sweetened liquid (called the wort), which they flavor with hops, then ferment with yeast. The basic process may be simple but the execution is highly sophisticated. The stages are malting, milling, mashing, brewing, cooling and fermentation - followed by maturation (racking), filtering (finishing) and packaging.

1.) Malting is the process of readying grain to be used in brewing. Grain is a tall grass with seeds on the top of the stalk. Grain is not good for baking but is good for brewing beer. Grain comes in many strains and varieties that ultimately influence the flavor of the beer. Grain cannot be used to create the wort in its normal state, because the starch in its floury kernel is insoluble. Each step of the malting process unlocks the starches hidden in the grain. Steeping is the first step in malting. Here the grain is steeped (soaked) in a vat of water for about 40 hours. The next step is germination of the grain. To germinate the grain, the grain is spread out on the floor of the germination room for about three to five days where rootlets begin to form. Inside the grain is a substance called starch. If left alone, the grain seed develops enzymes (chemicals) to break down the starch into sugars. The grain plant would use that sugar as energy to grow leaves and once the sugar supply is used up, the sun would take over growing a new grain plant. The germination process produces the enzymes which break down the starches within the grain into shorter lengths. At the end of the germination process, about three days, the starch has become soft and the enzymes have not started converting the starch into sugar yet. The grain is called green malt. The next process is drying or kilning. Once the plumule or rootlets below the husk grow to three quarters the length of the grain, germination is halted by drying the green malt on metal racks in the kiln house at 50 C. The temperature is then raised to 85C for a light malt, or higher for a dark malt. It is important that temperature increases are gradual so that the enzymes in the grain are not damaged. The malt shoots are removed for cattle feed, and the dried malt is stored in silos. Although malted grain is the primary ingredient, unmalted corn, rice or wheat are sometimes added, to produce different beer flavors.

After kilning, the result is finished malt. The differences in the way the grain is malted will affect the flavor, color and aroma of the beer. There are different types of malts: pale malts are dried at a low temperature and can produce a malt that can give the beer a pale golden color and a slightly bready flavor such as a pilsner. Mild ale malts are kilned to a slightly higher temperature and produce a pale malt that gives the beer a deeper color and slightly toasted biscuit flavors in the final beer.

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Many English ales go for this malt profile. Vienna and Munich malts are stewed and lightly kilned which converts some of the starch into more sugar which give the beer an orangey amber color and the classic toffeeish, nutty flavors of Oktoberfest beer and other Bavarian, German specialties. The highest temperatures are used to produce very flavorful and aromatic malts. Caramel and Crystal malts are stewed until all of their starches are converted into sugars then they are kilned until the sugar caramelizes like little Sugar Daddy candies. This longer roasted, sweet, caramel-flavored malt gives the beer a reddish-amber color, rich flavors and a fuller body. Kiln the grain longer and at higher temperatures and the darker and "roastier" the beer will be. (Just like higher roasted coffee beans.) This will give the beer darker color and chocolate, coffee and espresso-like flavors. 2.) The next process is Milling. Milling is the cracking of the grain which the brewer chooses for the particular batch of beer. Milling the grain allows it to absorb the water it will eventually be mixed with in order for the water to extract sugars from the malt. 3.) The next step is Mashing. Mashing is the process of turning the finely-ground malt, the grist, into a sweetened liquid. Mashing converts the starches, which were released during the malting stage, to sugars that can be fermented. The milled grain is dropped into warm water then gradually heated to around 75 C in a large cooking vessel called the mash tun. In this mash tun, the grain and heated water mix creating a cereal mash to dissolve the starch into the water, transforming it into sugar - mainly maltose. Because water is such a vital part of the brewing process, the water itself is a key ingredient. This sugar rich water is then strained through the bottom of the mash and is now called wort. (Pronounced wert.) 4.) Brewing is the next step. The spent grains are filtered out and the wort is ready for boiling which involves many technical and chemical reactions. During this stage, important decisions will be made affecting the flavor, color and aroma of the beer. Certain types of hops are added at different times during the boil for either bitterness or aroma and to help preserve it. The wort is boiled for one to two hours to sterilize and concentrate it, and extract the necessary essence from the hops. 5.) Cooling is the next step. The wort is transferred quickly from the brew kettle through a device to filter out the hops, and then onto a heat exchanger to be cooled. The heat exchanger basically consists of tubing inside of a tub of cold water. It is important to quickly cool the wort to a point where yeast can safely be added, because yeast does not grow in high heat. The hopped wort is saturated with air, essential for the growth of the yeast in the next stage. 6.) Fermentation is the next step. After passing through the heat exchanger, the cooled wort goes to the fermentation tank. The brewer now selects a type of yeast

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and adds it to the fermentation tank. This is where the "real magic" of brewing happens - when the yeast, is a micro-organism, eats the sugar in the wort and turns it into alcohol and carbon dioxide. This process of fermentation takes ten days. The wort finally becomes beer. Each brewery has its own strains of yeast, and it is these that largely determine the character of the beer. In some yeast varieties, the cells rise to the top at the end of fermentation, and are then skimmed off. This is called top fermentation, and ales are brewed in this way. When at the end of fermentation the yeast cells sink to the bottom, the process is known as bottom fermentation, used for lager or pils. Some special Belgian beers, called lambic or gueuze, use a third method where fermentation relies on spontaneous action by airborne yeasts typical of the Zenne valley near Brussels. 7.) Maturation (also called racking) is the next step. The beer has now been brewed, but it can still be improved through maturation. During this phase, the brewer moves, or racks, the beer into a new tank called the conditioning tank. The brewer then waits for the beer to complete its aging process. The taste ripens. The liquid clarifies as yeast and other particles settle. Secondary fermentation saturates the beer with carbon dioxide. 8.) Finishing is the last step in the brewing process. Here the beer is filtered and carbonated. Further filtering gives the beer a sparkling clarity. The beer is moved to a holding tank where it stays until it is bottled, canned or put into kegs. Filling techniques ensure air does not come into contact with the beer, and cannot be trapped within the container.

The final excellence of the beer you drink depends on you. Drink the beer as fresh as possible, serving it at the right temperature, in clean glasses, and properly poured. Good health!

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1.6.Detailed Flow chart of process Bottle Filter BBT Filler Pasteurizer Packing Uni-tank Kettle Empty Spent Lauter Bottle Mess Grain Cast Mill Malt SILO YeastCease Sugar Wash HopsReceiving WaterKettle Raw Water Treatment Whrifool

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2. Administration & HR liaison

2.1.Man Power/Work force The different types of workers include the following classes. WMC, SIC, ATL, CTL & RTL. Most of these are staying adjacent to the factory. The Working schedule for the factory employees are as follows SL No. 1 2 3 Shift A B C Period 6.00 - 14.00 14.00 - 22.00 22.00 - 06.00 Avg Employment 19 19 18

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G ( General)

09.00 - 17.30 (Lunch : 13.30 - 14.15) Total

56 (56+85) 141

Depending on the requirement, the employees are called in different shifts and few employees are called on duty on national festival, holidays and off days. 2.2.Workers Involvement There will be one safety committee. It shall have equal representation from management and workers. They will have following functions The safety committee shall meet at least once in a month It will discuss all the accidents occurred from the last meeting and suggest the precaution to be taken It will advise the management on planning, organizing, implementing the measures for effective control of unsafe working condition, unsafe method for environment improvement It will advise on purchase, procurement and issue of paper and personal protective equipments It will carry house-keeping inspection at least once in a quarter and submit the report to the management. It will arrange the safety training of the workers in collaboration with departmental heads. It will help in Health check-up Program, National safety day celebration & other safety promotional activities. It will carry inspection for fire-fighting arrangement and equipments at least once in 6 months. It will organize in association with dept heads various safety competition, audio visual show, mock drill etc from time to time.

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1. Research Topic
A detailed study of wage and compensation structure of Denzong Breweries Pvt Ltd. 1.1.Research

Type: Descriptive Research

The study which is conducted is a detailed study of the wage and salary structure of Denzong Breweries Pvt Ltd tries to explore the different affecting factors and components of it. This would throw light on the salary structure from different angles and derive useful conclusion from it. 1.2.Feature It describes the characteristics of certain groups Determine the relationship between two or more variables It is rigid in nature E.g.-making projection of a certain thing Answer the who, what, when, where, and how of the subject 1.1.Category

1.2.Cross-sectional studies It concerned with a sample of elements from given population. Data to be collected through field studies and surveys 1.1.Longitudinal studies It measures the same variables with re-interview from time to time by panel.

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It reflects changes in the buying behavior of a group. More accurate than data collected through surveys Less expensive

1. Collection of Information
The information is collected from the primary source of the Companys personnel manager and other supporting vis--vis evidential handouts and record sheets. Personnel manager was himself present throughout the survey. Different executives and workers were also interviewed at the time of survey. Though it was a sample survey so information from the whole population was estimated by going through several staffs those were available as per convenience. Other sources of information were Salary sheet Deduction records Leave and other facilities (canteen, Medi care, welfare, insurance record sheet) Performance appraisal Motivational appraisal Company policies complying salary, promotion, increment, grade pay, allowances and revision thereof.

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1. Conduct of research through questionnaires from samples


The composition of the population is as follows

1.1.Questionnaires
Questionnaires were interviewed both from executives and non-executives with in the factory premise. Samples were chosen on convenient basis, which were available at the time of survey. Questions were modified and refined after getting approved from HR Manager and employees in the view of applicability and appropriability. The list of questionnaires is attached at the end of the Report.

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2. Research findings: Major responsibilities of HR


The major HR responsibilities are derived from the questionnaires used in survey and repetitive interaction with HR Manager of the factory.

3. Wage & Remuneration Administration


One of the major concerns of personnel administration is how to determine monetary compensation of employees i.e. how do we determine a fair pay for a fair job done? This is very important to the employer because wages and salaries often constitute the greatest single cost of running business or public functions. Monetary compensation is also important to the employee because their pay is often their solemeans of economic survival. The concern of salary administration has been on how to develop an adequate and practical theory of wages that would help in determining how much pay a man should receive. A good system of salary administration tries to find adequate solutions to the following questions: what is suitable or proper pay for doing a particular job? Should pay be affected by the abilities and quality of the employee? Should it be affected by such factors as geographical location of the job; the size of the employees family, the cost of living, the ability of the employer to pay and the attitude to the employee? For example, when company or government department determine that a particular class of workers should receive N1, 800 per month for performing the duties of a particular jobs, how do we know that N1, 800 is the correct amount and not N4, 200 or even N500 a lesser amount? Aspects of Salary Administration There are four closely related aspects of wage administration:

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1. Wage and salary surveys - Are designed to determine the general pay level in the community and industry, thus the findings will give the company a base for setting its own rates; 2. Job evaluation 3. Merit rating and 4. Incentives Rest aspects is discussed in detail in further chapters

3.1. Job evaluation It establishes the relationships between wages and various jobs within the organization. Together, wage surveys and job evaluation set the "base" of minimum rates for each job.

3.2. Wage & Salary Structure A well established salary structure is well composed of monetary benefits as well as with fixed and variable compensation and rewards which will be satisfying, lucrative and motivating for the employees vis--vis affordable and rewarding to the employers. But along with this it must comply all laws pertaining. The basic salary structure of the Denzong Breweries Pvt Ltd follows

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Various Job Grades


There are various classes designed on the basis of job and nature of work. Compensation is decided in relation to this hierarchy.

3.3.Major Components of Remuneration

Numbers Shown in the brackets are the employees who are getting these benefits respectively. Out of the total 141 employees 85 are workers who are getting Hourly wage and rest 56 are official staffs are getting Monthly Salary. 85 workers are getting minimum wage 56 official staffs are getting living wage (Rather wage is a term which is applicable in case of functional workers) 1.1.Wage Determination & Revision Wage is determined in the collaborative participation of the HR Manager & Factory Manager. The process of determination ensures a 20 25 % increase in the existing salary every year

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1.2.Initiatives & Interventions Every Organization tries to bring to exception in its working process which will bring the change in the day-to-day working schedule which keeps the zeal alive among the workers and make them relieved from their hectic working routine. In the same way Denzong Breweries Pvt Ltd has also tried to bring some changes in this busy & monotonous work program by putting forth some exceptional initiatives.

Denzong Breweries Pvt Ltd Believes that greater trust could be generated among employees and management only by making the operation and reward procedure clear and transparent. So it has a clear procedure for performance appraisal which is discussed for respective employees in the open general meeting. It has also the policy to disclose the salary given to every grade of employees.

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1.3.Wage and Salary compliance with Govt Rules Denzong Breweries Pvt Ltd fulfills all the legal requirements demanded by different Acts these are

Salary is paid to employees on 1st of every month through check and on the same day at 2nd half the record is transferred to Account books. Payment to contractual employees is made with-in 7th of the same month. Salary/payroll administration is maintained by an application called UDYOG TANKHA Apprentices are kept on the probation of 6 months, if performance is not up to the expectation then extra 6 months i.e. total 1 yr probation period is kept.

2. Other facilities and benefits provided & their Reimbursement


There are several other facilities and benefits provided on fixed or on variable basis to employees to encourage them to work effectively and letting them aware about the concern-ness of the Denzong Breweries Pvt Ltd for them.

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A hand out of Motivational Appraisal is given in the next page.

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3. Suggestion & Recommendation


Every organization has Wage policy dealing with remuneration of work rendered by employees in any organization. Wages are that compensation given to employees done for work in return. Wages are given to the worker(blue color) who are the shop floor employees and salaries are given to executive cadre (white color) according to Public Policy, a good wage and compensation policy should look into the following:

It is also suggested that the least possible difference in the compensation is possible, that much indifference in decision and participation is seen among workers. It is much essential to establish an equal and equitable salary structure.

3.1.COMPENSATION & EQUITY Compensation affects the behaviour of people. Employing organization desires two things: 1. Attract & keep personnel in the organization. 2. Motivate them to higher level of compensation. Equity is concerned with felt justice according to natural law or right when an employee receives compensation from the employer, perceptions of equity are affected by two factors: -

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1. The ratio of compensation to ones inputs of effort, education, training, endurance of adverse working condition. 2. The compensation of their ratio with the perceived ratios of significant, other people with whom direct contact is made. Equity only exists when a person perceives that the ratio of outcomes to inputs is in equilibrium with respect of self and in relation to others.

4. Conclusion
Because of the importance that the compensation holds for their life style and self-esteem, individuals are very concerned that they be paid a fair and competitive age.

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Organizations are concerned with pay not only because of its importance as a cost of doing business, but also because of it motivates important decision about employees taking a job, leaving a job and nevertheless performance on the job.

12. Reference

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Wage as reward and compensation of social responsibility: Charlie Cook University of West Alabama www.codexpert.com www.citehr.com Manpower Planning and Administration: Course Developer/ Writer Mr Shehu Adamu Department of Public Administration and Business Studies, Niger State Polytechnic, Bida Campus Niger State