Compensation management

1. COMPENSATION MANAGEMENT
Prof. Yogesh Daudkhane
Faculty - HRM

2. WHAT IS REMUNERATION?
• Remuneration is the
Compensation an
employee receives for
his/her contribution to
the organization.
• Remuneration is wages
or salary typically
money that is paid for
services rendered as an
employee .

3. COMPONENTS OF REMUNERATION
• Wages can be paid per hour /day/week
• Salary is generally paid per month
WAGES & SALARY
• Additional to Salary, based on Performance
INCENTIVES
(PAYMENT BY RESULTS)
• It includes Canteen, Uniform, Mediclame, PF,
Gratuity etc.
FRINGE BENEFITS
• Mainly for Top Executives like Company Car, Paid
Holidays, Furnished homes, Employee Stock
Ownership Plan etc.
PERQUISITES
• Challenging Job, Growth, Comfortable
work condition, flexi time
NON MONETARY
BENEFITS

4. .
FACTORS INFLUENCING EMPLOYEE
REMUNERATION
INTERNAL
FACTORS
1. Employee
Himself
2. Business
Strategy
3. Job Evaluation
4. Performance
Appraisal
EXTERNAL
FACTORS
1. Labour
Market
2. Cost of Living
3. Law & Order
4. Socio & Eco.
Conditions

5. TYPES OF WAGES
• MINIMUM WAGE
– It is the one which provides not only for bare sustenance of
life but also for the preservation of the efficiency of the
worker, it must provide for some measures for children’s
education, medical, other such amenities etc.
• FAIR WAGES
– It is above Min. Wage & below Living Wage, its given just
at the rate which is going on in market.
• LIVING WAGES
– It is suppose to provide for a particular standard of living
that would ensure good health of family of worker,
decency , comfort, education etc.

6. REMUNERATION FOR SPECIAL GROUPS
• TEAM – Based Pay
– A task when given to any Team which they
complete by mutual understanding & collective
efforts. The ideal method is to pay the Base Pay to
every Team member, in addition to payment for
the performance of entire team
• Remuneration for Professionals
– They get paid for the knowledge & skills they are
having. For eg. Scientist, Economists, Freelancers,
Practicing Doctors etc.

7. REMUNERATION FOR SPECIAL GROUPS
• Contract Employees
– These employees are not On Roll of the Company But
are appointed by External Agency. In this case
Company pays to the Contractor & he pays to his
employees. Company is treated as Principle Employer.
• Expatriates
– Payment to such Foreign Executives who are working
& residing in India for the company. It is a big
challenge for HR Managers as it involves several
complexities.