Institute of Business Administration

University of Dhaka

H601: Compensation Management

Fall Semester, 2019
Week 1 & 2
Unit Coordinator
Dr. M. Nazmul Amin
ALA Scholar

Experience/Research
Degrees
BSc Ag (Honours)
MS in Agronomy
Master in Public Policy & Management (Monash Business School, Australia)
PhD in Business & Economics (Monash Business School, Australia)
Research areas
Strategic Management
Performance Management
Compensation Management
Human Resource Management
Change Management
Corporate Governance
 Student Consultation
Room: 219;
Email: nazmul.amin@gmail.com
Consultation Time:
Face-to-face (From Week 2)
Monday before or after class
E-mail
Anytime
 Lecture Notes

You MUST bring the print copy in the class

Attending lectures and class discussions is an
absolute MUST
 Lectures, Class Discussions, Presentations & Exam

What does all of this mean?

 ATTENDANCE AT ALL LECTURES AND CLASS

DISCUSSIONS IS A MUST

 WEEKLY READING FOR CLASS DISCUSSIONS IS A

MUST

 BOTH THEORY AND CASE READING IS A MUST

 Lectures, Class Discussions, Presentations & Exam

Exam Questions may be drawn from

class discussion and presentation
questions
And the lectures are important
preparation for the class discussions and
presentations
Assignment hints are given in lectures
 Unit objectives
 Define the purpose and the range of activities associated
with the area of compensation management (CM);
 Develop an understanding of compensation management
in the context of environment including the national and
international legal obligations and globalization;
 Examine the issues related to performance evaluation and
management, and compensation and benefits;
 Develop an understanding of how to select wage surveys,
analyze their usefulness and combine the data to select the
appropriate market rates for a job, as well as how to
conduct a survey for an organization;
 Review labour-management relations and promotion of
safety and health of the employees; and
 Develop a salary administration policy.
 Assessment
Assessment Task Due Date Value
Class Participation
10%
Class Performance [Brainstorming + Pop Quiz + General Discussion etc.]

Class Activities & Performance [group workshop and discussion] 5%

Case Presentation [Teamwork] [Project one]: 3- The written report is due in the 15%
4 students in a group; class on the day of presentation.
Presentation: Part 1 (10%)
Written Report: Part 2 (5%)
Word limit -3500-4000 words (Max.) (without
references and appendices)
Case Development and Presentation 07 October 2019 (Monday in the 15%
[Individual] [Project two]: Research Report lecture class)
[Maximum 7000 words with APA format]
[Executive summary & references are not
included in the word count]
Mid-term Examination Official Examination period 25%
2 hr. closed book exam
Final Examination 2 hours (closed book) Official Examination period 30%
 Assessment Details
Case Presentation [Teamwork] [Project one]
Evaluation Criteria
Structure
Content
Visual aids
Presentation
Referencing
 Assessment details
Case Development and Presentation [Individual]
[Project two]: Research Report
Please select one case from the following cases:
A Pharmaceutical Company (national or
multinational) doing business in Bangladesh.
A Paint and Coatings Company (national or
multinational) doing business in Bangladesh.
A Non-banking Financial Institution (NBFI) doing
business in Bangladesh.
A Platform Business in Bangladesh.
You can also choose a company in Bangladesh but
should confirm the case with me.
 Assessment details
Case Development and Presentation: Research Report
Questions
1. What are the CM problems and issues facing your selected
company/industry? Be sure to provide your Rationale (This
includes a brief introduction to the case analysis).
2. Which do you believe is most important for your company’s
competitive advantage: internal consistency or market
competitiveness? Explain your answer.
3. Based on your observation of the market practices in
Bangladesh, describe some of the approaches adopted by
employers in building a flexible workforce (Use your industry
as an example).
4. What CM challenges will [your chosen company/industry]
face in the 21st century? Explain your reasoning.
The suggested contents for the report are:
Report preliminaries (title page, table of contents
and executive summary)
1. Introduction
2. Body of Report
3. Conclusion
4. State your recommendations (based on
the discussion above).
5. Explain (briefly) the implementation of
your recommendations.
 Plagiarism
Must be your own work
Sources must be acknowledged properly
 Today’s Learning Objectives
Define & discuss
Human resource management
Why study HRM
HRM practices & company performance
Responsibilities of HR departments
Distinctive challenges of managing HRM
HR planning…
HR planning limitations & problems
A brief overview on…
Job Analysis
Recruitment
Testing & Selection
Induction Program
Training & Development
Compensation Management
Defining Human Resource Management
 Define Human Resource Management
HRM… is the process of acquiring, training,
appraising, and compensating employees, and of
attending to their labour relations, health and
safety, and fairness concerns.
… Is concerned with a holistic approach towards
the management of people working in an
organization, who contribute to the achievement
of organizational objectives.
…The policies, practices, and systems that influence
employees’ behaviour, attitudes, and performance.
HRM practices & company performance
Human Resource Management Practices

Organisational
performance

Introductory Induction
issues of Job Analysis
Employee
Training & Compensation Relations
HRM & Design of Recruiting Selection Development
Performance
Management Management Work Life
and work STM (Career Balance
HR Planning planning)
 HR’s Role in Organization
The job of human resources is NOT primarily to:
 Keep the company out of court
Enforce rules and maintain consistency
Manage administrative processes
Tell people ‘No’.
HR’s job is to:
 Help build and reinforce the company’s values and
culture
Play a leadership role in building capabilities that
ensure the successful execution of business strategy.
 The Trends Shaping HRM
Globalization & Competition trends
Deregulation
Technological Trends
Trends in the Nature of Work [High-tech Jobs,
Service Jobs, Knowledge Work & Human Capital]
Demographic & Workforce trends [An aging
workforce]
Economic Challenges & trends [Dramatic economic
downturn starting in 2007/2008, Slowdown in deregulation and
globalization]
 Competitive challenges & HRM
Going global
Embracing new technology
Managing change
Developing human capital
Responding to the market
Tensions on the trade front [Protectionism;
Ongoing Sino-American “trade war” ]
Fiscal and financial risk [Cyber-attacks and data
integrity concerns cripple large parts of the internet]
 Responsibilities of HR Department
Functions Responsibilities
Analysis & design of work Work analysis; job design; job descriptions

Recruitment & selection Recruiting; job postings; interviewing; testing; coordinating use of temporary
labour
Training & development Orientation; skills; training; career development programs

Performance management Performance measures; preparation & administration of performance

appraisals; discipline
Compensation & benefits Wages & salary administration; incentive pay; insurance; vacation leave
administration; retirement plans; profit sharing; stock plans

Employee relations Attitude surveys; labour relations; employee handbooks; company

publications; labour law compliance; relocation & outplacement services

Personnel policies Policy creation; policy communication; record keeping; HR information

systems
Compliance with laws Policies to ensure lawful behaviour; reporting; posting information; safety
inspections; accessibility accommodations

Support for strategy Human resource planning & forecasting; change management
HR Planning (HRP)
 Human Resource Planning (HRP)
HRP is the process of including forecasting,
developing and controlling by which a firm
ensures that it has the right number of people &
the right kind of people at the right place at the
right time doing work for which they are
economically most useful.
In light of the organization’s objectives, corporate
& business level strategies, HRP is the process of
analyzing an organization’s human resource needs
& developing plans, policies, & systems to satisfy
those needs.
 Characteristics of a HRP
Expression of intentions of top management
Relationship to objectives
Long lasting
Clarity
Participation
Written form
consistency
 Formulating HRP
Gathering information
Labour legislation
Social values & customs
Employees aspirations
 Environment study
 Examination of alternative policies
 Getting approval of proposed policy
 Adopting & launching policy
 Appraising the policy
HRP…limitations & problems
Limitations of forecasting;
Employers’ & employees’ traditional bias &
apathy (indifference/lethargy);
Resistance from employees;
Incidence of absenteeism-A stumbling block
in HR planning;
Illiteracy & paucity (scarcity/lack) of skilled
labour-A serious problem for HR planning;
Expensive & time consuming;
Job analysis
 Job analysis
Job analysis
…is defined as the process of determining by
observation & study, & reporting pertinent
information relating to the nature of a specific job.
It is the determination of the tasks that comprise the
job and of the skills, knowledge, abilities &
responsibilities required of the worker for
successful performance & which differentiate the
job from others.
…the procedure for determining the duties & skill
requirements of a job & the kind of person who
should be hired for it.
 Job analysis…
Job analysis… two primary parts….
Job description….is a simple concisely written record explaining
the contents-duties, responsibilities, & requirements involved
in a particular job
It tells us…
What is to be done?
How is it to be done? &
Why?
Job specification ….is a statement that contains mental,
physical & other demands required of a person to perform the
specific job successfully
 Details of the various qualifications
 Skills, knowledge, abilities, physical characteristics & other
relevant personal characteristics
Recruitment process
 Recruitment

Recruitment is the discovering of potential

applicants for actual or anticipated
organizational vacancies
…is the process of exploring & searching
prospective employees & providing them
stimulus to apply for specific positions (jobs)
in an organization, through varied internal &
external sources
Popular sources of recruiting employees
Two sources… internal & external…
1. Internal search
2. Advertisements
3. Employee referral/recommendations
4. Employment agencies
5. Temporary rental
6. Schools, colleges, & universities
7. Field recruitment trips
8. Professional organizations
9. Casual or unsolicited applicants/walk-ins
10. Recruiting via the internet
11. Competitors as sources of manpower supply
Testing and Selection
 Selection process
….the process through which organizations
make decisions about who will or will not be
allowed to join the organization
….varies organization to organization…..job to
job…
Organization should create a selection process
in support of its job descriptions.
…a job description identifies the knowledge,
skills, abilities, and other characteristics
required for successfully performing a job
Steps in the selection process

Testing &
Screening Checking
reviewing Interviewing Making a
applications references &
work candidates selection
& résumés background
samples
Common methods used for selecting human resources

Applications

Employment tests

Employment interviews
Employee
selection Work sampling
methods Reference checks & recommendations

Assessment centers

Physical examination
Induction to new employees
 Induction to new employees

Induction is the process of receiving &

welcoming employees when they first
join a company & giving them the basic
information they need to settle down
quickly & happily & start work
 The induction arrangements
1. Reception
2. Documentation
3. Company induction-Initial briefing
4. Introduction to the workplace
5. Formal induction courses
6. On-the-job induction training
Training & Development
 Training Defined…
 The process of aiding employees to gain
effectiveness in their present & future work
 An organization’s planned efforts to help
employees acquire job-related knowledge, skills,
abilities, & behaviours, with the goal of applying
these on the job
Training is defined most basically as learning
Training is the act of increasing the knowledge
& skill of an employee for doing a specific job
 Training methods
1. Classroom instruction
2. Audiovisual Training
3. Computer-based training
4. On-the-job training (OJT)
5. Simulations
6. Business games & case studies
7. Behaviour modeling
8. Experiential programs
9. Team training
10. Action learning
 Developing employees for future success
Employee development
The combination of formal education, job
experiences, relationships, & assessment of
personality & abilities to help employees prepare
for the future of their career
It is future oriented
Is not necessarily related to the employee’s
current job
Development is about preparing for change in the
form of new jobs, new responsibilities, or new
requirements
 Training versus Development
Training Development
Focus Current Future

Use of work Low High

experiences
Goal Preparation for Preparation for
current job changes
Participation Required Voluntary
Approaches to Employee Development

Interpersonal Formal
relationships education

Job
Assessment
experiences
Compensation Management
 Compensation Management
Compensation Strategy
Job analysis
Job Evaluation
Designing pay levels, mix, and pay structures
Performance management
Pay-for-performance plans
The benefit determination process
Union role in wage and salary administration
Compensation trends in Bangladesh: Public sector,
private sector, & MNE experiences
 Presentation Case: Week 4
Case for presentation: ‘Continental Airlines: One Company’s
Flight to Success’, page 748-750, (Managing Human Resources, 13th
edition, Bohlander & Snell, 2005);
Presentation Questions
1.If you were the manager of a distressed organization, what
specific steps would you take to turn the organization around?
2.What are the primary causes for the sudden change in employee
morale at Continental Airlines?
3.Discuss the competitive challenges of the airline industry in the
21st century.
4.What actions would you take in terms of compensation
management (CM) to ensure that Continental continues its
improved performance over the next decade?
 Presentation Case: Week 5
Case for presentation: ‘Job analysis and hiring
decisions at Ovania Chemical’, page 732-737, (Managing
human resources, 13th edition, Bohlander & Snell, 2005).
Presentation questions
1. How would you go about conducting a job analysis
for a job that does not yet exist?
2. What reasons did the selection committee have for
selecting only those factors that could not be
acquired in a two-year training program?
3. Should the concern for women getting down into
the dirty treatment tanks have been a selection
issue?
 Presentation Case: Week 6
Case for presentation: ‘Denny’s: A Grand Slam Success
Story’, page 730-732, (Managing Human Resources, Bohlander & Snell,
2005);
Presentation Questions
1.What are the key points to Denny’s turnaround with regard
to diversity?
2.What lessons can other companies learn from Denny’s
experience?
3.What is the likely impact of diversity on the company’s
performance? What are your thoughts on the issue?
4.What conditions are important for the success of a viable
performance administration [in a restaurant business-
focusing on diversity]?
 Presentation Case: Week 8
Case for presentation: ‘The Ordinary Heroes of the
Taj’, page 119-123, (Rohit Deshpandé and Anjali
Raina), Harvard Business Review, December 2011.
Presentation Questions
1. Identify and discuss the main business features of
the hospitality industry.
2. Critically evaluate the main reasons for The Taj
Mahal Palace Hotel’s success.
3. What factors may influence a company to design a
viable compensation policy? Use Taj Hotel as your
example.
 Presentation Case: Week 9
Case for presentation: ‘Southwest Airlines in 2014:
Culture, Values, and Operating Practices’, Case 25, page
C340-C375, Thompson & Gamble in Crafting and Executing Strategy: The
Quest for Competitive Advantage, 20th ed. McGraw-Hill/Irwin, 2016.

Presentation questions
1. Identify the main characteristics of the industry in which
Southwest Airlines operates.
2. Critically evaluate Southwest’s people management
practices.
3. What factors may influence a company to design a viable
compensation policy? Discuss with example.
 Presentation Case: Week 10
Case for presentation: ‘Employee empowerment at P&G’, page
99, (Bhattacharyya, D.K., Compensation Management, Oxford
University Press, New Delhi, 2010).
Presentation Question
1.Explain external and internal forces/trends that influence P&G
to do business globally.
2.Identify and discuss the main business features of the industry
[FMCG] [Generate a list of competencies].
3.Discuss how P&G’s initiatives benefit compensation
management practices.
4.Discuss the main management issues that P&G should
consider to develop a competitive compensation
administration.
 Presentation Case: Week 11
Case for presentation: ‘Natural Pharmaceutical Ltd.’, page 793-
795, (Strategic Human Resources, Tanuja Agarwala, Oxford University Press, 2007).
Presentation Questions
1.What initiatives has NPL taken to ensure that company
values are maintained across its operations worldwide? In
what ways do these initiatives help manage the anxieties of
the expatriate manager?
2.Why do you think it is important to customize HR activities
to the culture of the host country?
3. There is a scarcity of managers who have the mix of skills
required for global assignments. How will the development
of core managers for international postings help NPL
manage shortage of global skills?
 Presentation Case: Week 12
Case for presentation: ‘ABC Learning: Collapse of an
Entrepreneurial Venture’, page 1-13 (Cases in Business
and Management, 2nd edition, Alam & Majumdar, 2011).
Presentation Questions
1.Identify and discuss the main business features of
the childcare industry [Generate a list of
competencies].
2.Critically evaluate the main reasons for ABC
Learning’s collapse. What are the lessons learned
from ABC’s mistakes?
3.What compensation policy regime do you
recommend for a viable childcare industry?