This document discusses compensation and its objectives. It defines compensation as the remuneration received by employees in return for their contributions. Compensation consists of both monetary benefits like salary as well as non-monetary benefits like perks and time off. The objectives of compensation include rewarding performance, attracting and retaining talent, aligning employee performance with organizational goals, and communicating an employee's worth. The document also outlines factors that affect salaries and wages as well as different types of compensation like direct, indirect, and non-financial compensation.

1. COMPENSATION
PRESENTED BY:- BIRENDERKUMAR
PTM1001003

2. WHAT IS COMPENSATION
• Compensation is the remuneration received by
an employee in return for his/her contribution
to the organization
• Compensation is an integral part of human
resource management which helps in
motivating the employees and improving
organizational effectiveness.

3. Con…….
• Compensation provided to employees can
direct in the form of monetary benefits and/or
indirect in the form of non-monetary benefits
known as perks, time off, etc.
• Compensation does not include only salary but
it is the sum total of all rewards and
allowances provided to the employees in return
for their services

4. Compensation Objectives
 To reward employees’ past performance fairly, in line
with efforts, skills and competencies
 To attract and retain competitive high performing
Employees
 To remain competitive in the labor market
 To align employees’ future performance with
organizational goals
 To communicate the employees their worth to the
organization
 To provide employee social status

5. Compensation Policy Issues
Pay for performance
Pay for seniority
Salary increases and promotions
Overtime and shift pay
Probationary pay
Paid and unpaid leaves
Paid holidays
Geographic costs of living differences

6. Need for Compensation Management
. Motivatio
n
Compensation
Packages
Employee Need
Retention Satisfactio
n
 Good compensation package will motivate the employees to
increase the organizational productivity.
Salary is just a part of the compensation system ,the employees have
other psychological and self-actualization needs to fulfill.
 It will help the organization to attract and sustain the best talent

7. Component of Compensation
Management
• Compensation systems are designed keeping in
minds the strategic goals and business objectives.
Compensation system is designed on the basis of
certain factors after analyzing the job work and
responsibilities

8. Goals of Compensation
• There are mainly 3 goal of compensation:-
Attract
Retain
Motivate

9. Factors affecting Salaries and Wages
 Cost of living
 Supply and demand of labor
 Government requirements (minimum wage rates)
 Competitor wage scales
 Trade Union influences
 Labor productivity

10. Types of Compensation Management
• Direct compensation
• Indirect compensation
• Nonfinancial Compensation

11. Direct compensation
Medical
. Reimbursemen
Basic t Special
Salary Allowances
Direct
House Compensatio
Rent n Bonus
Allowances
Conveyanc Leave
e Travel
Allowances

12. .
Indirect Compensation
. Overtime
policy
Leave Hospitalizatio
Policy n
Indirect
Flexible Compensati
Timing on Insurance
Holiday
Leave
Homes
Retiremen travel
t Benefits

13. Nonfinancial Compensation
• Satisfaction that person receives from job
itself or from psychological and/or physical
environment in which person works.

14. BENEFITS OF COMPENSATION
• An ideal compensation system will have positive
impact on the efficiency and results produced by
employees
• Sound Compensation/Reward System brings peace in
the relationship of employer and employees
• It will enhance the process of job evaluation. It will
also help in setting up an ideal job evaluation and the
set standards would be more realistic and achievable
• The system provides growth and advancement
opportunities to the deserving employees

15. .
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