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1. INSTITUTE –University School of
Business
DEPARTMENT -Management
M.B.A
People Management: 21BAT621
Faculty Name : Dr. Apoorva Singh
(Assistant Professor)
UNIT-2; Chapter-8
Compensation
Management
DISCOVER . LEARN . EMPOWER

2. Course Objective
COB No. Title
COB1
To make the students understand the importance of human resources
as an asset and to sensitize the students to the various facets of
managing human resource in the real world.
COB2
To make students develop, implement and evaluate organizational
development strategies aimed at promoting organizational
effectiveness.

3. Course
Outcome
CO No. Title Level
CO1
To understand the different concepts for workforce
management in contemporary organizations
Understand/R
emember
CO2
To apply the processes that can be used to make people
more productive and happy
Apply
CO3 Analyse
CO4
To evaluate the new compensation structures consistent with
the prevailing industry standards.
Evaluate
To design and formulate HR policies for acquisition,
Design/Creat

4. Introduction to Compensation
Management

5. Compensation Systems
• Objectives of an Effective Compensation System:
• Legal compliance with all appropriate laws and regulations
• Cost effectiveness for the organization
• Internal, external, and individual equity for employees
• Performance enhancement for the organization

6. Nature of Compensation
• Types of Rewards
• Intrinsic
• Intangible, psychological and social effects of compensation
• Extrinsic
• Tangible, monetary and nonmonetary effects of compensation

7. Components of A Compensation Program

8. Direct Compensation

9. Typical Division of HR Responsibilities: Compensation

10. Compensation Approaches

11. Decisions About Compensation Levels

12. Individual vs. Team Rewards
Distribute variable rewards at the team level
Make system simple and understandable.
Using Team-Based Reward Systems
Use skill-based pay for the base.
Use variable pay based on business entity performance
Maintain a high degree of employee involvement

13. Perceptions of Pay Fairness

14. Equity Considerations in Compensation

15. Compensation
Administration
Process

16. Developing Pay Surveys
Select Employers with Comparable Jobs
Determine Jobs to be Surveyed
Decide What Information Is Needed
Conduct Survey

17. Pay Structures
• Market Line
• The line on a graph showing the relationship between the job value, as
determined by job evaluation points, and pay survey rates.
• Common Pay Structures
• Hourly and salaried
• Office, plant, technical, professional, managerial
• Clerical, information technology, professional, supervisory, management, and
executive

18. Establishing
Pay Structures

19. Pay Structures (cont’d)
• Pay Grades
• A grouping of individual jobs having approximately the same job worth.
• Broadbanding
• The practice of using fewer pay grades having broader pay ranges that in
traditional systems.
• Benefits
• Encourages horizontal movement of employees
• Is consistent with trend towards flatter organizations
• Creates a more flexible organization
• Encourages competency development
• Emphasizes career development

20. Summary
• Compensation is what employees receive in exchange for
their work. The management of this key activity helps the
organization obtain, maintain and retain a productive
work force.
• The outcomes of pay dissatisfaction may detract from the
organization's productivity and suggest a decline in the
quality of work life. Poorly compensated jobs can lead to
absenteeism and other forms of employee withdrawal.

21. REFERENCES
Text Books
▪Dessler, G.2013. Human Resource Management. 15th Edition, Prentice-Hall, India, ISBN:9780134235455.
Online Articles
•https://www.iedunote.com/compensation-management
•https://www.economicsdiscussion.net/human-resource-
management/compensation-management/32258

22. • Assessment Pattern
Components HT-1 HT-2 Assignment Surprise Test Business Quiz GD Forum Attendance Scaled
Marks
Max. Marks 10 10 6 4 4 4 2 40

23. THANK YOU
For queries you can reach me on
Email:
apoorva.e8931@cumail.in