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Introduction to Strategic  Compensation Management: Part IDr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt)             ...
Compensation• Compensation - money and other benefits  received for providing services• Cascio defined compensation as “Di...
Components of Compensation•   Wage and Salary•   Incentives•   Fringe Benefits•   Perquisites
Wage and Salary• Wage - remuneration to workers,  hourly-rated payment• Salary - remuneration paid to white-  collar emplo...
Incentives• Incentive - any reward of benefit given to   employee over and above the wage or  salary with a view to motiva...
Fringe Benefits• Fringe benefits  - Provident fund, gratuity, pension  - Medical benefits, accident relief,  health and li...
BENEFITS
Perquisites• Perquisites - provided to managerial  personnel either to facilitate their  job performance or to retain them...
COMPENSATION ANDREWARD MANAGEMENT
Compensation & Reward              Management• Beach defined compensation & Reward management as -  “Establishment and imp...
Remuneration & Rewards               Financial                       Non-FinancialDIRECT            INDIRECT         JOB  ...
The Elements of Total           Compensation                  Total               Compensation   Base            Pay      ...
Total Compensation/Reward                    Total                Compensation/                   Reward    Total         ...
Factors Influencing Pay  Market            Organisation  Forces            Policy   Work       Individual   Value     Perf...
Three Pay PoliciesPay Policy   Attract   Retain   Motivate   Control                                            CostsLead ...
Govt. regulation for Compensation in                India•   Minimum Wages Act, 1948•   Payment of Wages Act, 1936•   Adju...
The Compensation Structure                  Job Evaluation                       Wage and SalaryIssues InvolvedIssues Invo...
Concept of Different Wages• MINIMUM WAGE• FAIR WAGE• LIVING WAGE (HIGHEST IN  VALUE)
Concept of Wages• Minimum Wage - For sustenance of  life and preservation of efficiency of  workers and to provide some me...
Concept of Wages• Living Wage – In addition to  providing food, clothing and shelter  for worker and family, education for...
Concept of Wages• Fair Wage -above minimum wage but  below living wage; fair wage to be paid  based on capacity of industr...
Calculation of minimum wages• Worker’s family – 3 members, earnings of  women, children & adolescents disregarded• Minimum...
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Introduction strategic compensation management Part Ii
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Introduction strategic compensation management Part Ii

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Introduction strategic compensation management Part Ii

  1. 1. Introduction to Strategic Compensation Management: Part IDr. G C Mohanta, BE(Mech), MSc(Engg), MBA, PhD(Mgt) Professor
  2. 2. 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”
  3. 3. Components of Compensation• Wage and Salary• Incentives• Fringe Benefits• Perquisites
  4. 4. 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
  5. 5. Incentives• Incentive - any reward of benefit given to employee over and above the wage or salary with a view to motivating 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 individual or group performance
  6. 6. 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
  7. 7. BENEFITS
  8. 8. 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
  9. 9. COMPENSATION ANDREWARD MANAGEMENT
  10. 10. Compensation & Reward Management• Beach defined compensation & Reward management as - “Establishment and implementation of sound policies and practices through job evaluation, surveys of wages & salaries, analysis of relevant organizational problems, development and maintenance of wage structure, establishing rules for administering wages, incentives, profit sharing, wage changes and adjustments, supplementary payments, control of compensation costs and other related items"
  11. 11. Remuneration & Rewards Financial Non-FinancialDIRECT INDIRECT JOB ENVIRONMENT(cash) (benefits) • Interesting • Good policies • Insurance work and practices• Salaries • Holidays • Challenge • Competent• Incentives • Medical and • Responsibility supervision• Bonuses health • Recognition • Congenial • Child care • Advancement co-workers • Employee • Safe and assistance healthy work environment • Fair treatment Components of Employee Remuneration
  12. 12. The Elements of Total Compensation Total Compensation Base Pay Indirect Compensation/Compensation Incentives Benefits
  13. 13. Total Compensation/Reward Total Compensation/ Reward Total Total Non-Financial Financial Compensation/Compensation/ Reward Reward
  14. 14. Factors Influencing Pay Market Organisation Forces Policy Work Individual Value Performance
  15. 15. Three Pay PoliciesPay Policy Attract Retain Motivate Control CostsLead + + ? ?Match = = ? =Lag - ? ? +
  16. 16. Govt. regulation for Compensation in India• Minimum Wages Act, 1948• Payment of Wages Act, 1936• Adjudication of Wage Disputes• Wage boards• Pay Commissions• Payment of Bonus Act, 1965
  17. 17. The Compensation Structure Job Evaluation Wage and SalaryIssues InvolvedIssues Involved Surveys in Setting in Setting Compensation Compensation Pay Grades Structures Structures Rate Ranges
  18. 18. Concept of Different Wages• MINIMUM WAGE• FAIR WAGE• LIVING WAGE (HIGHEST IN VALUE)
  19. 19. Concept of Wages• Minimum Wage - For sustenance of life and preservation of efficiency of workers and to provide some measure of education, medical requirements and amenities. 
  20. 20. Concept of Wages• 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.
  21. 21. Concept of Wages• Fair Wage -above minimum wage but below living wage; fair wage to be paid based on capacity of industry to pay.
  22. 22. 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.
  23. 23. Thank you

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