Concept of Compensation, Exploring & Defining Compensation Context (Strategic Compensation, Total Compensation, Extrinsic Compensation, Intrinsic Compensation, Components of Compensation, Factors Influencing Compensation, Wage and Salary, Incentives, Fringe Benefits, Perquisites, Govt. Regulations for Compensation in India, Minimum Wage, Fair Wage, Living Wage, Calculation of Minimum Wages)
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Concept of compensation, exploring & defining compensation context
1. Concept of Compensation, Exploring
& Defining Compensation Context
Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)
Professor
Al-Qurmoshi Institute of Business Management
Hyderabad
4. Compensation
Compensation - money and other benefits received
for providing services
Cascio defined compensation as “Direct cash
payments, indirect payments (employee benefits) and
incentives to motivate employees to strive for higher
levels of productivity”
5. Strategic Compensation
Strategic compensation is determining & providing
compensation packages to employees, those are
aligned with the business goals and objectives
Organizations have to take special measures regarding
compensation to retain the valuable employees
11. Wage and Salary
Wage - remuneration to workers, hourly-rated
payment
Salary - remuneration paid to white-collar employees
& managerial personnel
Wages and salary - paid on the basis of fixed time
period, not associated with productivity of an
employee
12. Incentives
Incentive - Any reward or benefit given to an employee
over and above the wage or salary with a view to motivate
him to excel in his work
Incentives include both monetary as well as non-
monetary rewards
A scheme of incentive is a plan to motivate an individual
or a group performers
14. Fringe Benefits
Fringe benefits
- Provident fund, gratuity, pension
- Medical benefits, accident relief, health and life
insurance
- Facilitation in performance of job, like uniforms,
Canteens & recreation
15. Perquisites
Perquisites - provided to managerial personnel either
to facilitate their job performance or to retain them in
the organization
Perquisites include company car, club membership,
free residential accommodation, paid holiday trips and
stock options
20. Concept of Different Wages
Minimum Wage
Fair Wage
Living Wage (Highest in Value)
21. Concept of Minimum Wage
Minimum Wage - For sustenance of life and
preservation of efficiency of workers and to provide
some measure of education, medical requirements
and amenities.
22. Concept of Living Wage
Living Wage – In addition to providing food,
clothing and shelter for worker and family,
education for children, protection against ill-
health, essential social needs and insurance against
misfortunes and old age.
23. Concept of Fair Wage
Fair Wage -above minimum wage but below living
wage; fair wage to be paid based on capacity of
industry to pay.
24. Calculation of Minimum Wages
Worker’s family – 3 members, earnings of women,
children & adolescents disregarded
Minimum food requirements - 2,700 calories/adult.
Clothing requirements - 18 yards per annum/person.
Housing - minimum rent charged by Govt for houses
under subsidized housing scheme
Fuel, lighting and other miscellaneous items - 20 %
total minimum wage.