It is a ppt on compensation, which is very important to study . This ppt is in very simple language which is very easy to understand and learn

1. WAGE AND SALARY
ADMINISTRATION

4. DEFINITION:
 Compensation refers to a wide range of financial and non
financial rewards to employees for their services rendered to
the organisation. It is paid in the form of wages, salaries,
employee benefits such as paid vacations, insurance,
maternity leave, free travel facility etc.
 Compensation is an integral part of HRM which helps in
motivating the employees and improving the organisational
effectiveness.

5. ELEMENTS OF COMPENSATION
 Monthly wage and salary
 Bonus
 Economic benefits
 Contribution towards insurance premium
 Retirement benefits
 Transport facilities
 Medical facilities

6. OBJECTIVES OF COMPENTION
 To recruit or retain qualified employees.
 To increase or maintain moral.
 To determine basic wage and salary.
 To reward for job performance.

7. IMPORTANCE OF COMPENSATION
 Attract and retain employees.
 Ensure best levels of employee performance in
meeting the organisation’s strategic objectives.
 The organisation is able to retain the best talent by
providing them adequate compensation thereby
stopping them from switching over to another job.
 It aims at creating a healthy competition among them
and encourages employees to work hard and
efficiently.

8. TYPES OF COMPENSATION
 There are two types of compensation.
1. BASE COMPENSATION
2. SUPPLEMENTARY COMPENSATION

9. BASE COMPENSATION

10. DEFINATION
• Base compensation involves monetary benefits to
employees in the form of wages and salaries. The term wage
is used to denote remuneration to workers doing manual or
physical work.
• There are two types of monetary benefits:
1- WAGES
2- SALARY

11. WAGES
 Wages may be based on hourly, weekly, daily or even
monthly basis.
 Wages are basically the price paid for the services of labour
in the process of production.
 They are composed of two parts- the basic wage and other
allowances.
 Wages are paid to blue collared.

12. SALARY
 The term salary is usually defined to mean
compensation to office employees , foremen , managers
and professional & technical staff.
 Thus the time period for which salaries are paid is
generally higher than in case of wage payments.

13. Factors Affecting
Wages/Compensation
1) Demand for Supply of labour : Wage is a price or
compensation for the services rendered by a worker.
The firm requires these services and it must pay a
price that will bring forth the supply which is
controlled by the individual worker or by group of
workers through their unions.
2) Ability to Pay : Employer’s ability to pay is an
important factor affecting wages not only for the
individual firm, but also for the entire industry. This
depends upon the financial position and the
profitability of the firm.

14. 3) Productivity of workers: To achieve the best results from
the worker and to motivate him to increase his efficiency,
wages have to be productivity based. It is the key factor in
the operation of a company .
4) Labour Unions: Higher wages may have to be paid by the
firm to its workers under the pressure of trade unions, and
if they fail in raising the wage and other allowances, they
resort to strike whereby supply of labour is restricted.
5) Government : To protect the working class from the
exploitation of powerful employers, the govt has enacted
several laws. These laws and labour policies have an imp on
wages and salaries paid by employers . As a result wages
and salaries can’t be fixed below the level prescribed by the
government.

15. SUPPLEMENTARY COMPENSATION

16. DEFINATION
 Supplementary compensation involves ‘fringe benefits’
offered through several employee services and benefits
such as housing, subsidised food, medical aid, creche ,
etc. It has been given different titles in industry such
as ‘service programmes’, ‘employee benefits’ and ‘non-
wage payments’.

17. TYPES OF SUPPLEMENTARY COMPENSATION
PROVIDED BY AN ORGANISATION

18. TYPES OF SUPPLEMENTARY
COMPENSATION
1) Payment for time not worked: Examples of this area
include paid rest periods, paid lunch periods, wash-up
time, clothes-change time , vacations, holidays, sick
leave, voting time etc.
2) Hazard Protection: There are a number of hazards
that might be faced by all. Income maintenance during
these periods is the purpose of fringes designed to
protect against the hazards of illness, injury, debt,
unemployment, permanent disability, old age, death.

19. 3) Employee Services: Big organisations offer certain
employee services on a continuing basis, such as
housing, food, medical, recreation & so on. They have
such fringe benefits programs as cafeterias, aid in
housing, low cost loans, use of organisational vehicles
for personal use, membership in certain professional
organisations.
4) Legal Payments: In many countries, the govt have
passed several laws for protecting employees against
the major hazards of life. Payments under this
category may involve unemployment or lay-off
compensation, employee’s insurance ,old-age benefits
under social security.

21. BASE COMPENSATION SUPPLEMENTARY
COMPENSATION
1. It denotes payments to
workers in the form of wages
and salaries.
2. Wages and salaries are paid
in cash.
3. Wages and salaries are paid
to compensate employees for
there services.
1. It denotes fringe benefits to
workers over and above their
regular wages and salaries.
2. Fringe benefits are offered in
the form of employee services
and benefits such as housing,
medical aid, creche, canteen
etc.
3. Fringes or non wage
payments are maid to increase
the efficiency of employees and
to retain them in the
organisation on long term
basis.

22. BASE COMPENSATION SUPPLEMENTARY
COMPENSATION
4. Wages and salary are
determine by job evaluation ,
demand and supply of labour,
organisation’s capacity to pay,
trade union’s bargaining power,
productivity, govt regulations
etc.
4. Supplementary
compensation is determined by
the history of the organisation,
philosophy of mgt,
organisation’s capacity to spend
on employee benefits, need to
retain talented employees,
desire to enhance public image,
etc.

23. Q. “Teamcompensation allows some individuals to
work harder than the other, yet receive the same pay”.

25. THANK
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