compensation-management for HRM master students
- 1. Presented By : Dushyant Sinha Sandeep Shah Naman Bhatia zshaan Khanna Pratik Manwar
- 2. □ Human Resource is the most vital resource for any organization. It is responsible for each and every decision taken, each and every work done and each and every result. Employees should be managed properly and motivated by providing best remuneration and compensation as per the industry standards. The good compensation will also serve the need for attracting and retaining the best employees. . Introduction
- 3. □ Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees Compensation
- 4. □ □ When managed correctly, it helps the organization achieve its objectives and obtain, maintain, and retain a productive workforce. □ Compensation is a key factor in attracting and keeping the best employees and ensuring that your organization has the competitive edge in an increasingly competitive world. □ Without adequate compensation, current employees are likely to leave and replacements will be difficult to recruit. □ The outcomes of pay dissatisfaction harm productivity and affect the quality of work life. Contd….
- 5. □ □ Compensation management is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness. □ The Compensation Management component enables you to differentiate between your remuneration strategies and those of your competitors while still allowing flexibility, control and cost effectiveness. □ It provides a toolset for strategic remuneration planning that reflects your organization culture and pay strategies. Compensation Management
- 6. □ □ Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non- monetary benefits known as perks, time off, etc. □ Financial Compensation: Total Financial compensation = Direct + Indirect Compensation □ Direct Financial Compensation - pay received in forms of wages, salaries, bonuses and commissions , fringe benefits Types of compensation
- 7. □ Fringe benefits described as □ Welfare expenses □ Wage supplements □ Perquisites other than wages □ Sub wages □ Social charges Fringe Benefits
- 8. □ □ zndirect Financial Compensation(benefits) - All financial rewards not included in direct compensation. For examples workers compensation, Family & medical leave, Disability Protection, □ Nonfinancial Compensation - Satisfaction person receives from psychological & or physical environment in which person works. For examples, skills variety, experiences, good working conditions, flextime Types of compensation (contd..)
- 9. □ □ A good compensation package is important to motivate the employees to increase the organizational productivity. □ Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals. □ Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose. □ The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards Need of Compensation Management
- 10. □ Objective Of Compensation Management
- 11. □ □ To help the organization achieve strategic success while ensuring internal and external equity. □ znternal equity- ensures that more demanding positions or better qualified people within the organization are paid more. □ External equity - assures that jobs are fairly compensated in comparison with similar jobs in other firms □ Attract qualified personnel □ Retain current employees □ Reward desired behaviour □ Control costs □ Facilitate understanding Contd…
- 12. □ □ Internal Factors: ➢ Employers Compensation strategy ➢ Worth of a Job ➢ Employees Relative Worth ➢ Employers Ability to Pay DETERMINING COMPENSATION
- 13. □ □ External Factors: ➢ Labor Market Conditions ➢ Area Wage Rates ➢ Cost of Living ➢ Collective Bargaining Contd……
- 14. □ □ Wage and Salary Surveys □ Collecting Survey Data □ The Wage Curve □ Pay Grades □ Competency Based Pay The Compensation Structure
- 15. □ □ Payment of Wages Act, 1936 □ Industrial Dispute Act, 1947 □ Minimum Wages Act, 1948 □ Equal remuneration Act, 1976 □ Payment of Bonus Act, 1965 □ Wage Board Governmental Wage Policy of India
- 16. □ □ Wage boards consist of an impartial chairman , two other independent members and two or three representatives workers and employers each □ The recommendations of the board are first submitted to the government for the acceptance □ After acceptance the government requests the parties to implement them. Wage boards
- 17. □ □ To establish good labor relations. □ To decide on appropriate wages □ To decide wages based on individual’s capability □ To develop a pre-determine scheme for payment of wages □ To establish linkages of wages payment with performance □ To provide for incentive payment □ To guarantee minimum wages □ To provide for neutralization of price rise □ To develop a wage structure which can attract talent Objective Of A Good Wage Policy
- 18. □ □ The Issue of Equal Pay for Comparable Worth □ The Issue of Wage Rate Compression □ Living Wage Laws □ The Issue of Low Salary Budgets Compensation Issues