This document provides information on compensation management. It discusses different types of compensation including direct compensation like salary and indirect compensation like benefits. It outlines objectives of compensation policies and benefits of compensation benchmarking for employers and employees. Key aspects of compensation covered include base salary, variable pay, benefits like insurance, retirement, flexible benefits and personal services. The document also discusses concepts like rewards, incentives and gratuity.

1. Presentation on Compensation Management
Submitted By : GROUP 2
Section: A
Group Members:
1. Priya Chandani 037
2. Shivam Singh 053
3. Uday Agarwal 062
4. Himalekha Ramesh T 019
5. Lingaraj R 029
6. Allu Pavan Kalyan 005
7. Niket Kumar Chaurasia 032

2. Compensation?
Compensation is the total cash and
non-cash payments that you give to an
employee in exchange for the work
they do for your business. It is
typically one of the biggest expenses
for businesses with
employees. Compensation is more
than an employee's regular paid wages.

3. Types of Compensation:
Direct compensation
Direct compensation refers to the compensation that an employee receives
directly from his or her place of work. This includes the base salary and any
incentive pay.
Indirect compensation
Indirect compensation includes non-monetary benefits provided to workers,
such as pension funds, mobile phones, company cars, health and life insurance,
overtime pay, and annual leave.

5. Managers design compensation policies to
achieve the following objectives:
• Attract qualified personnel
• Retain personnel
• Equity in pay
• Cost control
• Avoid legal regulation
• Easy to understand

6. Why is compensation benchmarking a benefit
to the employer?
• Retracting and retaining top talent
• Staying competitive in the market
• Maximizing plan designs for financial gain
• Using benchmarking, we can grab the attention of top talent
• To get better cost savings in recruitment process
• To gain loyalty of employees
• Easy to recruit and secure top talent

7. Why is compensation benchmarking a benefit
to the employee?
•Salary Increases
•Bonuses
•Incentives
•Salary Ranges
• Benefits
• Hours expected to
work
• Working
ambiance/situations
• Work/Life balance

8. Strategic Pay Plan
Strategic pay is payment being made to employees, focusing more on
the strategic perspective as to how & when the pay should be disbursed to ensure that
the employee is performing to the fullest. Pay in the literal meaning refers to the
compensation or remuneration a person expects after doing his/her job.
Pay Rate
Amount of money received per unit time.

9. The following factors should be taken into
consideration in determining wage and salary
structure of workers:
• Labor Unions
• Personal perception of wage
• Cost of living
• Government legislation
• Ability to pay
• Supply and demand
• Productivity

10. Establishing pay rates involves five steps:
• Evaluating jobs
• Developing pay grades
• Conducting a salary survey
•Using wage curves
• Fine-tuning pay rates.

11. Basic salary is the
amount paid to an
employee before any
extras are added or taken
off, such as reduction due
to salary sacrifice
schemes or an increase
due to overtime or
bonus.

12. Competency based pay/ variable pay
It refers to the modern-day rewarding system where the employee is rewarded on the basis of his
range of knowledge and types of skills, he possesses rather than the job title he holds.
The basic components of base pay are: -
• HRA (House Rent Allowance)
• DA (Dearness Allowance)
• Leave Travel Allowance
• Mobile Expenses
• Medical Allowance/Reimbursements
• Gratuity
• Taxes

14. Benefits (concept)
Indirect financial and non-financial payments employees receive for
continuing their employment with the company.
Types of Benefits:
Insurance Benefits
Flexible Benefits
Retirement Benefits
Personal Service and Family-Friendly Benefits

15. Insurance Benefits
 Hospitalization, Health and Disability
 InsuranceLife Insurance
Retirement Benefits
 Social Security
 Pension Plans
 Cash Balance Pension Plans
 Pensions And Early Retirement

16. flexible Benefits
Programs
 Flexible Work
Schedules
 Flexitime
 Compressed Workweeks
 Workplace Flexibility
 Other Flexible Work
Arrangements
 Compressed Workweeks
Personal Services And
Family-Friendly Benefits
 Employee assistance
programs
 Family-friendly (work
life) benefits
 Subsidized child care
 Sick child benefits
 Elder care
 Educational subsidies
 Domestic partner
benefits

17. WHAT IS REWARD?
Literature Review
• Reward is the ‘oil’ of the entire human
resource process shields.
• Reward is concerned with the formulation
and implementation of strategies and
policies that are to reward people fairly,
equitably and consistently in accordance
with their value in the organization.
From oxford definition
• A sum of money offered for the detection
or capture of a criminal, the recovery of
lost or stolen property.
• Something given or received in return or
recompence for services, merit hardship.
• To make return or requite

18. Incentives are financial rewards above and
beyond regular salary.
Managers Needs to Know :
• Employee Needs
• Money is Not the Only Motivator

21. Individual Incentive
• Piecework Plans
• Merit Pay
Sales People
• Straight Salary Plan
• Commission Plan
• Combination Plan

22. Teams or Groups
Production standards set for specific work groups.
Organization Wide Incentives
• Profit Sharing Plans
• Employee Stock Ownership Plan (ESOP)
• Gainsharing

23. Gratuity is a sum of money paid by an employer to an
employee for services rendered in the company.
However, gratuity is paid only to employees who
complete 5 or more years with the company.

24. • The income tax is payable on taxable salary in the following slab:
Up to Rs 2,50,000 Lac: No Tax
Rs 2,50,001 to Rs 5 Lac: 5 percent
B/w Rs 5,00,001 to Rs 10 Lac: 20 percent
Above Rs 10 Lac: 30 percent