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Compensation Management
 

Compensation Management

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    Compensation Management Compensation Management Presentation Transcript

    • Compensationmanagement
    • Meaning & concepts
      The policies & procedures for managing all forms of financial returns & tangible services & benefits that employees receive as part of an employment relationship.
      Objectives
      • Capable employees are attracted towards the organization.
      • The employees are motivated for better performance.
      • The employees do not leave the employers frequently.
    • Elements of compensation
      • Monthly wage or salary or total pay including basic wage, house rent allowance, D.A, city compensatory allowance.
      • Bonus at the end of the year.
      • Economic benefits such as paid holidays, L.T.C.
      • Contribution towards insurance premium.
      • Transport and medical facilities.
      • Contribution towards retirement benefits such as employee provident fund.
    • Factors determining compensation & pay rates
      DEMAND FOR AND SUPPLY OF LABOUR
      PREVAILING WAGE RATES
      GOVERNMENT
      COST OF LIVING
      ABILITY TO PAY
      LABOR UNIONS
      PRODUCTIVITY OF LABOUR
      Important factors which affect the individual differences n wage rate :
      • Workers capacity
      • Educational qualifications
      • Work experience
      • Hazards involved in works
      • Stability of employment
      • Demand for special skills
      • Profits or surplus earned by the organization
    • JOB EVALUATION
      Job evaluation is the process of determining the worth of one job in relation to that of the other jobs in a company so that a fair and equitable wage and salary system can be established.
    • Concepts of wages
      • Minimum Wages
      • Fair wage
      • Living wage
      Wage Plan
      • Time wage plan
      • Piece wage plan
      • Skill-based pay
      • Competency-based pay
      • Broad banding
    • Pay and Gender
      • Equal Pay Act of 1963
      Requires that men and women be paid the samefor performing substantially similar jobs withlimited non-gender exceptions (e.g., merit & seniority).
      • Issue of Pay Equity
      Similarity in pay for all jobs requiring comparable level of knowledge, skills, and abilities, even if actual duties and market rates differ significantly.
    • Competency-Based Pay
      Limitations(How many?)
      PricingCompetencies
      Competency-Based Pay SystemsKBP/SBP
      Maintenance ofCompetencies
      Training
    • Competency-Based Systems Outcomes
    • Rewards
    • Incentives
      An incentive is any factor (financial or non-financial) that enables or motivates a particular course of action, or counts as a reason for preferring one choice to the alternatives.
      Short Term Plans
      • Halsey Premium Plan
      Total Wages = (Taken Time X Standard Rate) + Bonus
      where Bonus =(Time Saved*Standard Rate ) 50%
      • Rowan Plan
      Total Wages = (Time Taken * Standard Rate) + Bonus
      where Bonus=(Time Taken*Time Saved * Std. Rate )/Std. Time
      • Barth System
      Total Wages = √Standard Time x time taken x hourly rate
    • Cont…
      Long Term Plans
      • Service Incentives
      • rewards employees for years of service with the company.
      • Profit Sharing Plans
      • certain percentage of profits is distributed
      • Stock Options
      • employees are given the option of purchasing the company’s stock
      • Performance Bonus Plans
      • reward employees based on each employee's annual performance review.
    • Incentives at different levels
    • Non-monetary incentives
      Non-monetary incentives are used to reward participants for excellent behavior through opportunities.
    • Payment of bonus act,1965
      Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.
      PAYMENT OF GRATUITY,1972
      The Payment of Gratuity Act 1972 is a social security enactment.
      Gratuity shall be paid to an employee on the termination of his employment after she/he has rendered continuous service of not less than 5 years i.e. on superannuation, retirement, resignation, death or disablement due to accident or disease