Componsation

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Componsation

  1. 1. Compensation and Benefits Presented by B N Nagaraj
  2. 2. Compensation <ul><li>What is meant by Compensation </li></ul><ul><li>What are the constituents which goes into Compensation </li></ul><ul><li>How is it determined </li></ul><ul><li>How is it implemented </li></ul>
  3. 3. What is Compensation <ul><li>To compensate in any manner for the service rendered </li></ul><ul><li>It might be in Cash or Kind </li></ul>
  4. 4. Constituents of Compensation <ul><li>In cash might be : </li></ul><ul><li>Salary and Wage </li></ul><ul><li>Bonus </li></ul><ul><li>LTA </li></ul><ul><li>Incentives </li></ul><ul><li>Reimbursements </li></ul><ul><li>Performance pay/ Variable pay </li></ul>
  5. 5. Constituents of Compensation <ul><li>In Kind or Perks </li></ul><ul><li>Welfare Schemes </li></ul><ul><li>Holiday Packages </li></ul><ul><li>Leave and Holidays </li></ul><ul><li>Fringe Benefits which goes along with the Positions </li></ul><ul><li>ESOPs </li></ul>
  6. 6. Constituents of Compensation <ul><li>Examples </li></ul><ul><li>Company Leased Accommodations. </li></ul><ul><li>Company Car </li></ul><ul><li>Free education for Children </li></ul><ul><li>Club Facilities </li></ul><ul><li>Recreation facility </li></ul><ul><li>Working from home </li></ul>
  7. 7. Constituents of Compensation <ul><li>Contd :- </li></ul><ul><li>Good working Atmosphere </li></ul><ul><li>Equal rights </li></ul><ul><li>Rewards (Annual, long service, Best employee etc) </li></ul><ul><li>Annual get together </li></ul><ul><li>Position and Authority </li></ul><ul><li>Insurances </li></ul><ul><li>Training and Development </li></ul><ul><li>Career Growth </li></ul><ul><li>Canteen </li></ul><ul><li>Loans and Advances </li></ul><ul><li>Rehabilitations </li></ul><ul><li>Retirement Benefits </li></ul>
  8. 8. Why do we do all these ? <ul><li>Business is changing </li></ul><ul><li>Business Scenario is changing </li></ul><ul><li>People expectations are changing </li></ul><ul><li>Stiff Competition in Business </li></ul><ul><li>Globalization </li></ul><ul><li>Globally Competitive </li></ul><ul><li>Acquisitions and Mergers </li></ul><ul><li>Talent attraction </li></ul><ul><li>Talent Retention </li></ul><ul><li>Talent Import </li></ul>
  9. 9. Why do we do all these ? <ul><li>Earlier Paternalistic role played by Govt organization </li></ul><ul><li>Changed Scenario to Perform to survive and grow </li></ul>
  10. 10. Best Practices <ul><li>“Best Practices” is not a designation limited to small and exclusive Companies. Often, the most useful ideas come from Companies that are faced with critical problems and are forced to find a solution. A best practice should be able to demonstrate a positive impact on Company financial performance, customer satisfaction and/or employees satisfaction. </li></ul>
  11. 11. Best Practices <ul><li>Improve Company bottom line financial performance </li></ul><ul><li>Enhances customer satisfaction </li></ul><ul><li>Strengthens the relationship between the Company and its employees </li></ul>
  12. 12. How is it determined <ul><li>Legislations by Government </li></ul><ul><li>Compensation surveys </li></ul><ul><li>Crises </li></ul><ul><li>Creativity </li></ul><ul><li>Leaders </li></ul><ul><li>Paying Capacity </li></ul><ul><li>Industry wise / region wise </li></ul><ul><li>Non profit organization </li></ul><ul><li>NGOs </li></ul><ul><li>Trusts </li></ul>
  13. 13. Wages <ul><li>May be classified as : </li></ul><ul><li>Minimum wages </li></ul><ul><li>Living Wages </li></ul><ul><li>Fair wages </li></ul><ul><li>Competitive wages </li></ul><ul><li>Luxury wages </li></ul>
  14. 14. Labour Legislations <ul><li>Minimum Wages Act – 1948 </li></ul><ul><li>Minimum Wages rules – different States </li></ul><ul><li>Minimum Wages for different Industries and different skills. </li></ul><ul><li>Minimum wages for different Zones in the same State </li></ul><ul><li>Social security Acts like PF, ESI, WC Act, MB Act, Gratuity Act. LWF Act etc,. </li></ul>
  15. 15. Labour Legislations <ul><li>Basic </li></ul><ul><li>Dearness Allowance </li></ul><ul><li>HRA </li></ul><ul><li>Conveyance Allowance </li></ul><ul><li>City Compensatory Allowance </li></ul>
  16. 16. Compensation surveys <ul><li>Industry wise comparisons </li></ul><ul><li>Region wise comparisons </li></ul><ul><li>Skill wise comparison </li></ul><ul><li>Law of Demand and Supply </li></ul><ul><li>Paying Capacity of the Organization </li></ul><ul><li>Special perks to retain talented employees </li></ul>
  17. 17. How is it implemented <ul><li>Forced to be implemented by legislations </li></ul><ul><li>Timing </li></ul><ul><li>In some company where Unions are prevailing – by way of negotiations and settlements – either long term or short term </li></ul><ul><li>Based on paying capacity in one phase or in phased manner </li></ul><ul><li>Rewards for exceptional people </li></ul><ul><li>Law of demand and supply </li></ul><ul><li>Crises </li></ul>
  18. 18. Thank you B N Nagaraj

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