presented by:Anukampa Shekhawat

‡ Compensation is what employees receive in exchange for their contribution to the organization. .‡ Compensation Management is a systematic approach to provide monetary value to employees in exchange for work performed. ‡ Compensation is the remuneration received by an employee in return for his/her contribution to the organization.

also known as wage and salary administration. . indirect payments in the form of employee benefits and incentives to motivate employees to strive for higher levels of productivity´. provide an incentive to work hard. remuneration management. y Compensation management.y It is an organized practice that involves balancing the work- employee relation by providing monetary and non-monetary benefits to employees. y Cascio has defined compensation as "Compensation includes direct cash payments. y According to Robbins ³Compensation management is a process of determining cost effective pay structure. designed to attract and retain. and structures to ensure that pay levels are perceived as fair´. or reward Management.

usually as a wage or salary.1. vacation pay. Benefits: these are indirect rewards given to an employee or group of employees as a part of organizational membership (health insurance. . stock options). 3. 2. retirement pension. Variable pay: it is the compensation that is linked directly to performance accomplishments (bonuses. incentives. Base pay: it is the basic compensation an employee gets. etc).

Compensation system Direct compensation Indirect compensation Base pay Wage salary Variable pay Incentives bonus Protection programs Medical insurance life insurance pension Pay for time not worked Vacations Holidays Services and perquisites Recreational facilities Car Low cost or free meals .

. y Create a healthy competition among employees. y Provide better quality of life. y Ensure equity. y Reward and encourage peak performance. y Increase or maintain morale/satisfaction. y Provide social status to employees. y Comply With Legal Regulations. y Reduce turnover and encourage company loyalty.y Attract and Retain qualified employees.

y Every employees will give their best to the organization. y Increases self-confidence. y Helps in running an organization effectively and accomplishing its goals. . y Job satisfaction and Motivation.y Improve efficiency and results produced by employees.

y Retain the best talent. y Help management in complying with the various labor acts. y Minimizes the labor turnover. y Help in organization¶s success and prosperity.y Low Absenteeism. y A rational compensation system will minimize the complaints from the employees. .

y a tool used by organizations to foster the values. . culture and the behavior they require.Compensation can be viewed as y a system of rewards that motivate employees to perform. y an instrument that enables organizations to achieve their business objectives.

y Compensation is also one of the fastest changing fields in Human Resources. People look for jobs that not only suit their creativity and talents.y Compensation is a primary motivator for employees. but compensate them²both in terms of salary and other benefits. as companies continue to investigate various ways of rewarding employees for performance. .

Internal factors y Business strategy y Corporate culture and philosophy y Performance appraisal y employee himself or herself y Costs/resource availability External factors y Competition y Labor Market y Cost of Living y Labor Unions y Globalization y Government Legislations .

y Minimum Wages Act.1972 . 1948 y Payment of Wages Act . 1923 y The Payment of Bonus Act . 1936 y Employees Provident Fund Act . 1948 y Employees Pension Scheme. 1965 y Payment of Gratuity Act. 1952 y Employees State Insurance Act. 1955 y The Workmen¶s Compensation Act.

Sign up to vote on this title
UsefulNot useful