This document provides an overview of compensation management and job evaluation. It discusses compensation packages, which include basic pay, supplementary pay like fringe benefits, and incentive pay. Fringe benefits are indirect compensation provided in addition to wages and include items like paid time off and health insurance. Incentive plans provide extra pay to motivate higher performance. Job evaluation is the systematic process of determining the relative worth of jobs in an organization to establish a fair wage structure. Key methods of job evaluation include point rating and factor comparison.

1. Compensation Management & Job
Evaluation

2. Group Members
• Agicha Pankaj
• Madhura Kadam
• Neelam Dalvi
• Sheetal Gadhari
• Bhagyashree Kotwani
• Yash Adukia

3. Compensation Management
An Introduction
• Employees work in the production units for eight hours a day
and against such work, they are paid certain amount of money
called “wage or Compensation Payment”
• Compensation Management is concerned with compensation
payment and other aspects relating to such payment.
• Workers are very much interested in the compensation payment
as their welfare is directly linked with such compensation
payment.
• There is a Tug- of - War between employer and workers as
regards to compensation payment.
• HRM is concerned with fair compensation payment to
employees as such payment avoids industrial disputes and
ensures cordial industrial relations.

4. Meaning of Compensation Payment
• Normally, compensation payable to the employees include
the following three components:
– Basic compensation for the job(Wage/Salary)
– Supplementary compensation paid to employees (Fringe
Benefits)
– Incentive compensation for the employee on the job.

5. Definition of Compensation
Compensation may be defined as money
received in the performance of work, plus
many kinds of benefits and services that
organizations provide to their employees.

6. Compensation Package/ Salary Slip
• An employee is given full details of
compensation payment on a printed
small slip called Salary Slip.
• The salary slip is given to every worker
along with full details of Salary Payment

7. Some examples of Salary Slip

8. Fringe Benefits

9. Meaning
• In addition to regular
wages, allowance, and bonus
payment, employees are given other
benefits and services called Fringe
Benefits.
• They are supplementary to regular wages
• They are indirect compensation

10. Definition
According to William. B . Werther and Keith Davis,
“Fringes embrace a broad range of benefits and services that
employees receive as a part of their total compensation
package… Pay or Direct compensation… is based on critical job
factors and performance. Benefits and Services, however, are
indirect compensation because they are usually extended as a
condition of employment and are not directly related to
performance.

11. Features
• Different from regular wages.
• Useful but avoidable expenditure.
• Not directly linked with efforts.
• Beneficial to all employees.
• Voluntary in character.

12. Objectives of Fringe Benefits
• To supplement direct remuneration.
• Employers prefer fringe benefits.
• To retain competent employees.
• To develop good corporate image.
• To raise employee morale.
• To motivate employees.

13. Types of Fringe Benefits
• Payment for Timeout worked by
employees.
• Contingent and Deferred Benefits.
• Legally required payments.
• Miscellaneous Benefits.

14. Advantages
• Support employee remuneration.
• Raise employee efficiency and productivity.
• Added employee attraction.
• Reduce employee fatigue.
• Raise employee morale.
• Develop good corporate image.
• Act as motivating force.

15. Disadvantages
• Unhealthy competition among
employees in the organization.
• Not adequately attractive to employees.
• Motivation of employees may not be as
per expectation.

16. Fringe Benefits in India
• Statutory Fringe Benefits.
• Voluntary Fringe Benefits.

17. Wage Incentive Plans

18. Definition
According to the National Comission on
Labour,
‘wage incentives are extra financial
motivation. They are designed to stimulate
human effort by rewarding the person, over
and above the time rated remuneration, for
improvements in the present or targeted
results’

19. Types of Incentive Plan
• Individual Incentive Plan
• Group Incentive Plan

20. Halsey Premium Plan
• In this plan, a worker is given gurantee of
minimum wage as per the time rate.
• For example- Extra payment made for
extra production done.

21. Advantages of Incentive Plan
• Inducement and motivation for higher efficiency.
• Enhanced employee earning.
• Reduction in Production Cost.
• Increased production capacity.
• Attraction for management.

22. Disadvantages
• Quality determination.
• Problem in introduction of new machines
or method.
• Demand for higher minimum wages.
• Jealousy among workers.
• Disregard security regulation.
• Problem in determining the standard
performance.

23. Requisites of a Good Incentive Plan
• Simplicity.
• Encourages initiatives.
• Prompt Payment.
• Properly communicate to employees.
• Definiteness & Flexibility.
• Justice to employer and employee.
• Acceptable to workers.

24. Perquisites
• Perquisites may be defined as any casual
emolument or benefit attached to an office or
position in addition to salary or wages. In
essence, these are usually non-cash benefits
given by an employer to employees in addition
to cash salary or wages.

25. Non Monetary Incentives

26. Job Evaluation

27. Definition
According to Edwin. B. Flippo, Job
Evaluation is a systematic and orderly process of
determining the worth of a job in relation to
other jobs.

28. Features
• Determines the relative worth of the
job.
• Based on the analysis of the facts
about the job.
• To bring a balanced wage structure.
• Needs to be differentiated from Job
Analysis and Performance Analysis.

29. Objectives
• To establish by impartial judgement.
• To establish satisfactory wage.
• To select employees more accurately.
• To promote employee goodwill.
• To provide management with a basis of proper
control.
• To determine the rate of pay for each job.
• Miscellaneous purpose.

30. Importance
• Indicates the relative worth of different jobs.
• Establishing a hierarchy of jobs.
• Useful for introducing a satisfactory, rational & balanced
wage structure.
• Promotes employees’ goodwill.
• Provides scientific base for promotion and transfers.
• Avoids injustice to workers.
• Vague feelings and suspicious of unfairness.
• Makes promotions and transfers more easily acceptable.
• Simplifies wage administration.
• Facilitates adjustment of existing job within the existing
wage structure.
• Removes grievances and disputes among employees.

31. METHODS OF JOB EVALUATION
1. Quantitative Method
2. Non Quantitative Method.

32. Quantitative Method
• Point rating method.
• Factor comparison method.

33. Non Quantitative Method
• Ranking or Job comparison method.
• Grading or Job classification method.

34. PROCESS OF JOB EVALUATION
1. Securing acceptance from employees.
2. Creating/forming job evaluation
committee.
3. Finding/ deciding the jobs to be
evaluated.
4. Analyzing and preparing job description.
5. Selecting the method of evaluation.
6. Classifying jobs.
7. Installing the program.
8. Periodical review.