CRITERIA IN COMPENSATIONLaw of supply & demandPrevailing wagesAbility to payGovernmental factorStandard & cost of livingProductivityBargaining powerJob requirements
DIVERGENT POLICIES HELPTo pay minimum wagesTo pay more than prevailing wagesTo pay higher wagesTo pay competitive wages
COMPENSATION SCENARIO IN IT SECTOR-POLICIES The growth rate of recruitment is 14.5% The average increase in the salary in 2006 was 16% Salary offered based on education,experience,position & skill
AVERAGE SALARY OFFERED IN IT SECTOR BASED ON EXPERIENCE 10+Years 7-10 5-7 2-5 0-2 0 55 5 110 15 Salary(in 5 0
TOP TEN HIGHEST SALARY PRAYERS IN INDIAN IT SECTOR• HCL Infosystems Limited• Hexaware Technologies• RMSI Private Limited• Cadence Design Systems• Tata Consultancy Services• Aztecsoft Limited• Nucleus Software• Induslogic• Kanbay International Inc• Cybage Software Private Limited
COMPENSATION POLICIES IN INSURANCE SECTOR Policies cover the following Accidental Insurance Medical Insurance Medi claims Family health Insurance Diabetes Insurance etc Policies involve Basic salaries Perks Allowances Accomodation etc
AVERAGE SALARY OFFERED IN INDIAN INSURANCE SECTOR BASED ON EXPERIENCE 12+ 4-9Years 1-3 0-1 Salary(in lakhs) 0 2 4 6 8
TOP PLAYERS OF THE INSURANCE SECTOR• Life Insurance Corporation• New York Life• Prudential• Met Life• Birla Insurance• Kotak Mahindra• ICICI• HDFC
COMPENSATION POLICY AT ENTRY LEVEL-INSURANCE SECTORLICICICI PrudentialNew York LifeInsurance Met Life Insurance In lakhs Birla Insurance 0 2.5 0.5 1 1.5 2 3
COMPENSATION POLICY IN IT ENABLED SERVICES Policy is designed to attract young talents Policy considers high attriition rate High average salary Compensation is target based Compensation don’t cover job security. Average salary offered by top players at entry level is from 1.5 to 3 lakhs For top management lucrative monetary & non monetary benefits are offered.
IT ENABLED INDUSTRIES WITH BEST COMPENSATION POLICY Microsoft Oracle IBM HCL Infosys Satyam Sify Wipro LG Samsung
COMPENSATION POLICIES IN TELECOMMUNICATION SECTOR Policies cover the following Annual bonus House rent allowance Mobile allowance Transportations Paid vacations Travel leaves etc Average salary at entry level ranges from 0.5 to 2.5 lakhs Average salary at managerial level ranges from 5 to 40 lakhs,based on experience.
TELECOMMUNICATION SECTOR WITH BEST COMPENSATION POLICY Tata Teleservices Reliance Communications Bharti Airtel Ericcson Motorola
PHILOSOPHY OF COMPENSATION PRODUCTIVITY PHILOSOPHY PURCHASING POWER PHILOSOPHY
PRODUCTIVITY PHILOSOPHY- ASSUMPTIONS Use of updated tools,techniques & machineries Optimum production Minimising the unit cost of production Lower price of goods Expanded market Increased income from sales Profit sharing with employees Utilising profit to regenerate process
PURCHASING POWER PHILOSOPHY-ASSUMPTIONS Good compensation to workers Increased purchasing power of the large work force. Effective demands for goods & services Stimulation of future production.
GROWTH OF SERVICE INDUSTRY Tourism sector is growing at the rate of 8% Good compensation encourage tourists pouring into holiday spots. Average income of people have improved a lot It helped to attain national prosperity People expect quality service & they are ready to pay for it
EXAMPLEo Distribution of Compensation is as follows Roadways-19% Railways-19% Airlines-27%
NON IMPLEMENTATION OF PHILOSOPHY- CONSEQUENCES OF PAY DISSATISFACTION Strike Desire for Grievances Absenteeism more pay Search for a higher paying jobs TurnoverPay dissatisfaction Lower Absenteeism Attractivene Job ss of job dissatisfactionPsychologicalwithdrawal Poor mental Health health
COMPENSATION & PERFORMANCE MODEL Feedback Employee sets Performance is Expectations Employee considers rewarded & goals Equity in compensation Employee sets new goals & expectations Based on performance
MINIMUM WAGEIt is provided for maintenance of life plus for preservation of the efficiency of worker
MINIMUM WAGE PAID TOWorkers working in• Agricultural sector• Cement working establishments• Bakery,Dairy products• Chemicals• Construction activities• Transport Corporation• Ice factories,cold storages• Laundry sevice• Textile Industry• All shops & other establishments
MINIMUM WAGE IN INDIA Applicable to labourers & workers The Minimum Wage Act,1948 prevents labour exploitation. It varies from state to state. Change in wage rate-(per day) Rs 35 in 1996 Rs 40 in 1998 Rs 45 in1999 Rs 66 in 2004 Rs 80 in 2007
OCCUPATIONALDIFFERENTIAL Wages are fixed based on different occupations & various degrees of skill.
FUNCTIONS Inducing workers to undertake more demanding jobs Encouraging people to develop skills Performing social function
INTER-FIRM DIFFERENTIALSIt reflects the relative wage level of workers indifferent plants in the same area & occupation
INTER FIRM DIFFERENTIAL-THE MAIN CAUSES Difference in the quality of labour employed by firms Imperfections in labour market Difference in technological advance Financial capacity of the firm Size of the firm
INTER-AREA OR REGIONALDIFFERENTIALSIt occurs when workers in the same idustry orsame occupational group,but living in different geographical areas are paid different wages.
REGIONAL DIFFERENTIAL-THE MAIN CAUSES Different rate of payment Difference in cost of living Availability of manpower
INTER-INDUSTRYDIFFERENTIALSIt occurs when workers in the same industryor in the same area but in different industries are paid different wages
INTER-INDUSTRY DIFFERENTIAL- THE MAIN CAUSES Extent of unionization Capacity to pay Labour capital ratio Stage of development Supply-demand of needed skill
PERSONAL DIFFERENTIAL It refers different payment made to differentindividual working in the same plant or same occupation
PERSONAL DIFFERENTIAL-THE MAIN CAUSES Merit Individual output Experience
JOB EVALUATION & WAGEPhase 1 SURVEYIdentify & study jobs Job analysisPhase 2 Job evaluationInternal equityJob ranking Job grading Factor comparison Point systemPhase 3 Wage surveyExternal equity Employer ProfessionalDepartment Self conducted associations associationsOf labour surveysPhase 4 Pricing jobsMatching Internal & external worthJob evaluation worth Match Labour market worth