What???Compensation of employees is the total remuneration, incash or in kind, payable by an enterprise to an employee inreturn for work done during the accounting period.Compensation has two main components:(a) Wages and salaries payable in cash or in kind. (directand Indirect payments)(b) The value of the social contributions payable byemployers: Like- Insurance, Group Insurance, ProvidentFund, Gratuity, Accident relief, ESI and other fringe benefits(sodexho)(b1) Job Context are the mostly non-monetary benefitsmade available to any employee by employer. This too shallpaly a pat in employee motivation & morale. (Challenges,responsibilities, recognition, CDP’s)
ECONOMY / ENVIRONMENT/ MARKET Compensation/Remuneration Non- Financial Financial Job Context Fringe Perquisites Benefits Club ChallengesMonthly membershi Responsibility Incentives PF/Hourly p Growth Bonus Gratuity Wages Stock Prospects Ex-gratia InsuranceSalaries options Work Accident Relief Company Condition Car DIRECT INDIRECT
Factors affecting pay rates Legal Considerations External Business Strategy & Policies Labour Salary Markets Job Compression Economy Evaluation Globaliza & PMS tion Union Influence EmployeeInternal Cost of Living
Legal considerations as per ILO Davis Bacon (1931) Equal Pay (1963) Walsh – Healey Employee Retirement Public Contract Income Security Act Act (1936) (ERISA) Title VII Civil Employee Age DiscriminationRights Act (1964) Compensation Employment Act Fair Labour Standards Act Americans with (1938) Disabilities Act Family and Social Security ActMedical Leave Act (1935) Workers Compensation Act
Job Evaluation • Job evaluation – a systematic way of determining the value/worth of a job in relation to other jobs in an organisation. • It tries to make a systematic comparison between jobs to assess their relative worth for the purpose of establishing a rational pay structure.
Job Analysis & Job Evaluation• Job analysis is a systematic way of gathering information about a job.• Every job evaluation method requires at least some basic job analysis• Job evaluation begins with job analysis and ends at that point where the worth of a job is ascertained for achieving pay equity between jobs. Factor Ranking Comparison Job Evaluation Point Method Job Classification
Components of Pay structure Basic Salary Commissions/Incentives Bonus Dearness allowance Child Education Allowance (taxed) City Compensatory Allowance Conveyance Allowance House Rent Allowance Leave Travel Allowance (taxed) Lunch Allowance Medical reimbursement (taxed) Newspaper allowance (taxed) Special Allowance Gift voucher Club membership (save tax)