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COMPENSATION MANAGEMENT

Objective .

Definition.
An Integral Part of Human Resource Management.

TYPES OF COMPENSATION
Direct

Indirect
Variable Executive.

TRENDS IN INDIA
Compensation trends in India changed with liberalization in 1991. Government was the biggest job creator Guaranteed pay determined by agreement between employee unions and Government Private sectors made government pay scales as benchmarks

More fringe benefits

CURRENT TRENDS
Factors that influenced compensation post liberalization
Increase in productivity gains Fast growth in real wages Faster GDP growth IT and Outsourcing services Average salary increases over 2005-06 ranged from 10% to 40%

FACTORS DEVISING PAY STRUCTURE


Job evaluation.

What must be paid to attract right people


Affordability of the organization Requirements to meet organizational goals It must have 2 components- base rate and scope for increasing base rate.

THE CONCEPT OF WAGE AND SALARY ADMINISTRATION


Compensation administration.

The principles governing compensation administration.


a)Maintaining equity. b)Maintaining competitiveness. c)Matching employee expectations. e)Devising a most efficient system. g)Maintaining industrial relations and harmony.

THE PURPOSE OF WAGE AND SALARY ADMINISTRATION.


Retaining and motivating employees.

Attracting a talented resources.

Financial management.
Legal requirements.

CONCEPTS OF DIFFERENT WAGES.


Minimum wage (The six norms). Fair wage . Living wage.

BASIC WAGE PLANS


Time wage plan. Piece wage plan. Skill-based wage plan. Competency based pay.

Broad banding.

Types Of Incentive Plans


Halsey Plan
Rowan Plan

Long term Plans

Annual Bonus

Profit Sharing

Barth System

Gain Sharing

Short Term Point Rating Plans system


Progressive Bonus

Employee Stock Option

NON MONETARY INCENTIVE


Recognisation Assigning challenging assignment. Giving additional responsibility. Giving non cash rewards. Awards for exceptional performance and valuable contribution.

GUIDELINES
Linked to employees performance Communicated

Suggestions should be valued


Not affected by external factors Should not add negative value Flexible, challenging and

WAGES POLICY IN INDIA


Minimum Wages Act, 1948.. Payment of Wages Act, 1936.. Payment of gratuity 1972 Industrial Dispute Act, 1947.

Payment of Bonus Act, 1965..