This document provides an overview of various compensation and benefits topics covered in weeks 5 and 6 of an MBA course. It discusses benefits like dental, medical, and vision insurance, as well as life insurance, paid time off, sick leave, extended leave, mental health coverage, and retirement savings options. It also covers topics like merit pay, incentive pay, deferred pay, competency-based pay, skill-based pay, team-based rewards, gainsharing, profit-sharing, and cash payments/allowances. Recreational facilities that some companies provide for employees are also mentioned.

1. II JAI SRIGURUDEV II
Sri Adichunchanagiri Shikshana Trust
SJB INSTITUTE OF TECHNOLOGY
BGS Health & Education City
Dr. Vishnuvardhana Road, Kengeri, Bengaluru - 560 060.
Department of MBA
Compensation Management and Reward System
20MBAHR306
Prepared by
Dr. Harshitha S
Assistant Professor
MBA Department
SJBIT

2. Topics Covered in Week 5
Module 3
Benefits including: dental, insurance, medical, vacation, leaves,
retirement, taxes;
Merit pay; Incentive Pay; Deferred Pay; Pay for time; Recreational
facilities.
Case Study
Module 4
Competency-Based Pay, Skill-Based Pay
Team-Based Rewards, Gainsharing, Profit-Sharing Profit-Related
Pay and Beyond Other Cash Payments and Allowances

3. Dental insurance
Many employers provide dental coverage as part of their overall
employee medical benefits, but sometimes dental insurance is a
separate benefit. Depending on your workplace, you will either have
a complete benefits package where medical and dental are grouped
together, or you will have two separate insurance policies for both
your medical and dental plans.
Additionally, dental plans generally cover routine dental exams,
cleanings and X-rays and dental procedures like root canals, fillings
and oral surgery.

4. Medical coverage
The most common employee benefit that employers offer is
medical or health coverage. Typically, employee medical
insurance covers things like doctors' appointments, regular
checkups, emergency room visits, basic medical procedures
and many types of surgical procedures.

5. Vision insurance
Vision insurance is usually a separate insurance plan offered along
with employee health benefits. Eye exams, prescription lenses,
ocular procedures and routine checkups for eye health are typical
procedures that a vision plan covers.
Life insurance policies
Many employers provide life insurance plans as part of an employee
benefits package. Often, these life insurance policies are group-term
life insurance, which means the insurer provides the employer with
a master contract that extends life insurance coverage to all staff
members and is in effect for a certain time period.
Usually, the life insurance term lasts for as long as the employee
works for their employer. Other life insurance plans may be
available depending on the employer, but group-term plans typically
cost less than individual insurance policies.

6. Paid time off
In addition to health benefits, most employers offer paid time off,
when employees can schedule personal days off of work.
Typically, the amount of PTO increases by a set number of hours,
which employees accrue each pay period. The number of hours
accrued each period can vary between employers and is often
determined by the length of time an employee has worked for
their employer.

7. Paid vacation time
Generally, vacation time accrual is an employee benefit that may
be offered in place of PTO. Employees who have vacation
allowances accrue a certain number of hours each pay period,
similar to paid time off allowances. The biggest difference
between a PTO plan and paid vacation time is that PTO can be
used for any kind of time off from work, whereas vacation
allowance is only for employees to take a vacation or break away
from work.

8. Paid sick leave
In addition to PTO or a paid vacation allowance, many
employers offer sick leave. Employees accrue a set
number of hours each pay period, the same as PTO or paid
vacation days, but sick days are usually a separate
allowance combined with paid vacation. Additionally,
employers who provide paid sick leave will generally
include paid vacation days in the package, and this
combination of employee perks takes the place of PTO.

9. Extended leave
Extended leave is different from paid sick leave accrual, and it
accounts for long periods away from work for medical reasons.
Oftentimes, employers offer extended leave benefits that pay
employees' salaries for time off over 15 consecutive days.
Employers may require employees to provide notice of their
extended absence along with documentation of any medical
procedures undergone during their time away.

10. Mental health coverage
Some employee health plans also include mental and emotional
health coverage. Depending on the insurance plan, appointments
with mental health practitioners, behavioral and cognitive therapy
services, grief, divorce and family counseling and prescription
coverage for medications for mental disorders can be covered in your
health benefits.
Retirement planning
Retirement options are available through most employers and often
differ, depending on the company. Several common retirement
options employers offer include 401(k) and IRA plans, 403(b)
retirement plans (especially if you're employed with a nonprofit),
simplified employee pension (SEP) plans and more.

11. Retirement savings
Retirement savings options are another staple of nearly every
employee benefits program. Over the last couple of years, 401(k)
plans have overtaken pension plans as the most popular
retirement planning option.
Why do employers prefer offering 401(k) over a pension?
•A 401(k) is less expensive than other qualified retirement plans
•Employers are not required to contribute to 401(k) plans
•401(k) plans give the employee more control over fund
contributions than a pension
Whether you choose to offer your employees a pension or a
401(k) retirement account, most employees expect an option for
their retirement savings to be included in their employee
benefits.

12. Merit pay is the type of compensation a company uses to
reward higher-performing employees with ongoing
additional pay. Merit pay is sometimes called incentive pay
or pay-for-performance, and it involves giving employees
base pay increases or bonuses based on their performance.
Advantages
• Attracting top talent:
• Clarifying expectations:
• Identifying employee rankings:
• Making company objectives clear:
• Increasing productivity and efficiency:
• Generating healthy competition:

13. Disadvantages
• Subjectivity of application:
• Perceived favoritism:
• Use of resources better spent elsewhere:
• Morale implications:
• Unfounded expectations:
• Unhealthy competition:

14. Incentive Pay
The objective of incentive compensation is to incentivise individual
and/or collective performance, and to recognise and reward this
performance.
Incentive pay refers to giving employees bonuses or other forms of
compensation in exchange for going above and beyond their normal
duties. It is used as a way to incentivize employees to continue doing
excellent work. A cash bonus toward the end of the year for the
holidays is a common form of this benefit, and some employees are
capable of earning a commission by making sales, which would also
fall under incentive pay. Employers can also reward workers for
superior performance by offering casual incentives. This refers to
giving workers non-monetary items such as gifts or paying for an
employee’s lunch.

15. Deferred compensation is a part of an employee's salary,
which is set aside for later payment. Taxes on the profit are
postponed in most situations before it is paid out. Deferred
compensation forms include insurance schemes,
contingency plans, and stock option plans.
Examples of deferred compensation include pensions,
retirement plans, and employee stock options. The primary
benefit of most deferred compensation is the deferral of tax
to the date(s) at which the employee receives the income.

16. Companies today have earmarked some sections of their
offices to allow for their employees to relax. These
recreational areas generally contain Television sets with
modern gaming consoles, foosball tables, vending machines,
carom boards, massage chairs, or simply some couches with
mobile-chargers.
Lunchtime walking club..
Yoga or tai chi. ...
Cook-off. ...
Improve workshop. ...
Board game tournament. ...
Volunteer together. ...
Escape room. ...
Karaoke night.

17. CASE STUDY

18. Module 4
Competency-based pay is a pay structure that compensates employees based
on their skill set, knowledge, and experience rather than their job title or
position. A competency-based pay plan encourages employees to reach the
pay rate that they want by taking charge of improving their skills and work.
Individual self-motivation
Company-wide motivation
Increased transparency
Reduced turnover
Greater pay subjectivity
Vulnerability to favouritism
Inaccurate measurement of company needs

19. Skill-based pay is a salary system that determines an employee's
pay based on his or her skills, experience, education or
specialized training. Depending on the company, the employee
might also receive a higher salary for earning formal certification in
his or her industry.
It enables job rotation, and filling of temporary vacancies due, for
instance, to absenteeism. It therefore contributes to a leaner
workforce.
It enhances productivity and quality through better use of human
resources.

20. Team-based rewards are commonly defined as any formal
incentives provided to a work team or at least one of its
individual team members. ... Monetary team-based rewards
include one-time cash bonuses, permanently increased base
salary, and variable pay (i.e., earning a specified percentage
of base salary).
Gainsharing is a system of management used by a business to
increase profitability by motivating employees to improve
their performance through involvement and participation. As
their performance improves, employees share financially in
the gain (improvement).

21. As an example of how gainsharing works, consider a company
producing rigid and steering differential axles for tractors. ...
Under gainsharing, the next $1,000,000 of axle output and
shipment was produced with only 9,000 hours. If the average wage
rate is $10 an hour, the 1,000 hours saved are worth $10,000.
Gainsharing and profit sharing programs both provide employees
with bonuses, profit-sharing programs offer rewards based on
company profitability, while gainsharing plans reward employees
for achieving specific performance metrics they can control.

22. A new gainsharing plan requires a means of sharing its
provisions with employees so they understand what it means for
them and the company.
Solicit Feedback. ...
Explain the Basics. ...
Provide a Formula. ...
Make Assessments and Changes on a Schedule.

23. Profit sharing
It is a system by which employees are paid a share of the net
profits of the company that employs them, in accordance with a
written formula defined in advance. ... Profit-sharing plans also
benefit employers by giving workers a direct incentive to
increase their productivity. Such payments, which may vary
according to salary or wage, are distinct from and additional to
regular earnings.

24. Profit related pay
A PAY system whereby employees receive a proportion of their pay in the form
of PROFIT-related payments. Advocates of such schemes suggest that they can
help to reduce UNEMPLOYMENT by making wages more variable.
Cash Payments and allowances
In financial accounting, a cash allowance refers to an expense that is repaid
immediately in cash, instead of being reimbursed at a later date. Employers will
typically give employees cash allowances to cover incidentals and the costs of
work-related expenses, such as meals, lodging, dry cleaning, and office supplies.

25. Thank you