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Compensati
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mangment

Contents
Alia Company.............................................................................................................. 2
Compensation management in Alia Company Pvt.ltd.................................................2
Subject of study and the way information was collected............................................2
A clear introduction covering company name, geographic location and main
business activity......................................................................................................... 2
Define compensation.................................................................................................. 3
Direct Monetary Compensation.................................................................................. 3
Monetary elements given by the company Alia..........................................................3
Basic salary.............................................................................................................. 3
Attendance Allowance.................................................................................................... 4
Annual salary increment................................................................................................. 4
Bonus........................................................................................................................ 4
Indirect Monetary Compensation................................................................................4
Annual leave........................................................................................................... 5
Menstruation leave.................................................................................................. 5
Emergency leaves......................................................................................................... 5
No-pay leaves.............................................................................................................. 5
Sick leaves.................................................................................................................. 5
Medical insurance......................................................................................................... 6
Education expenses....................................................................................................... 6
Recreational programs............................................................................................ 6
Non-monetary Compensation..................................................................................... 6
Alia company non-monetary compensations..............................................................7
Appreciation of employees...................................................................................... 7
Challenging work.......................................................................................................... 7
Working environment..................................................................................................... 7
Rate of Pay determinants........................................................................................... 8
Looking into the factors of pay determinants at the Alia Company............................8
Knowledge, skills and ability....................................................................................8
Type of the company............................................................................................... 8
Compensation rates................................................................................................ 8
Supply and demand of labour................................................................................. 9
Job responsibilities................................................................................................... 9

Employee performance........................................................................................... 9
Period of service...................................................................................................... 9
Labour strength....................................................................................................... 9
Management philosophy....................................................................................... 10
Geographic location.............................................................................................. 10
Company profit...................................................................................................... 10
In conclusion............................................................................................................ 11

Alia Company.
Compensation management in Alia Company Pvt.ltd.
Subject of study and the way information was collected.
This assignment is about the compensation elements by classifying them as direct
monitory, indirect monitory and non-monitory in the company Alia. Ali Company is a local
business in Maldives. I will elaborate on the compensation elements and will analyze the factors
that the rate of pay is maintained by the organization. This report was done by interviewing
Senior Marketing Executive Abdulla Nishan and from different websites and books.

A clear introduction covering company name, geographic

location and main business activity.
Alia Company was established on 1964 under the name of Alia furniture mart. Later the
company expended and branched into two sub companies, known as Alia construction and Alia
investment (Aliacontractors, 2015).
Looking into the Alia construction, todays it is known as the leading construction
company on the country Maldives. Company conduct most huge projects on the country such as
constructing huge building on government sector as well as on private sector. Which includes,
resorts structures, hospitals, sport centers and mosques (Aliacontractors, 2015).
On the other hand, Ali investment is the leading trading and investing company on the
country. Alia investments holds Alia store, where wide range of constructions products are being
sold every year. The store holds the most advanced and quality products around the world under
one roof. Moreover, the presence of an Alia store, Alia construction can boost their projects with
quality products (Aliacontractors, 2015).
Hence, Alia Company holds the sole distribution of YAMAHA products on the country,
including service centers. The company hold very advance and very educated workforce on
every aspect of field. Company has branch offices and service centers around different islands of
Maldives. The head offices and head stores are in the capital male. The company is known to be
the most stable and one of the richest company in Maldives. Which holds millions of dollars on
their account (Aliacontractors, 2015).

Moreover, company is has a workforce of more than 300 employees. alia company sees
their employees as the most valuable assets of them. Company gives their employees different
kinds of remunerations to motivate and to satisfy their employees aiming to achieve company
goals.

Define compensation.
Compensation refers to the all the types of monetary, non-monetary and indirectly returns in
contribution towards work performance by the employee as a part of employment relationship
throughout the time of employment.

Direct Monetary Compensation.

Direct monetary compensation refers to the payment in the form of money. Which includes basic
salary, overtime pay, allowances and bonuses. These monetary allowances given by the
organization to motivated and retain employees at the company Alia. Looking in to the details of
monetary elements include (Mohd Faizal Mohd Isa, 2012).

Monetary elements given by the company Alia.

Basic salary.
Basic salary is the amount paid by the employer to the employee in return on their work
performed. As well as the company Alia. The company pays their employees in return on their
work performed. Unlike many other pays it a fixed amount. Mostly this is the one of the most
important factor of attracting employees to the organization. The higher the payment the better
the candidates are. In this payment other benefits and bonuses are excluded. This payment is
mostly done on monthly basis unless an exceptional case arises. It has seemed that most of the
employees complete their works for the basic salary given to the employee.

Attendance Allowance.
Attendance is an allowance given to employees to motivate to come and work at the
organization. This is allowance is not much been practicing at government organizations and
mostly in civil service jobs. In Alia Company this allowance is given on monthly basis by adding
all the days the employee came for work. The allowance amount varies from employee to
employee depending on the employee hierarchy.
Annual salary increment.
Annual salary is known as the amount of money paid by the organization to the employees per
year or this is known as the basic salary paid in a year on monthly basis for 12 months. When
this amount is increase by years to years is known as salary increment. Salary increments are
given in the Alia Company depending on the employee work performance. This increasing salary
in year to year is to motivate and retain employees to work at the organization. Employee
retaining is very much important for organizations this is because employees who already works
at organization for a year or months has experiences in doing the job. He/she does not need
training as he/she will be knowledgeable about the tasks of the organization, how it should be
carried out and all. Thus recruiting employees for organization needs time, energy and money.

Bonus
Alia Company gives bonus to their employees annually. This bonuses are from the profit of the
company. Different employees will get different amounts of bonuses. This is because bonus is
given after evaluating the employee performance.

Indirect Monetary Compensation

Indirect monetary compensations are the benefits employees get other than direct cash, which is
mostly mandated by the international laws. Benefits are given to the employees as form of
appreciation. Which includes annual leaves, sick leaves, family responsibility leave,
menstruation leaves, insurance, education and recreational programs. As many of the following
monetary compensations are given to the employees of Alia Company. Looking into the details
of the indirect monetary compensation includes (Mohd Faizal Mohd Isa, 2012).

Annual leave.
Annual leave is given to the employees are like in the government policies. It is given on after
one year of joining the organization. Annual leave has 30 days excluding the public holidays.
Annual leave is a very important element in job satisfaction. This leave can be taken on
separately or fully. To overcome annual leave crashes organization practices annul leave plan
booking. This is to overcome unplanned annual leaves and to give leaves in a scheduled way.

Menstruation leave.
Menstruation leave is given to both parties, male and women. But the amount of period is
different from men to women. Men gets 10 days of menstruation leave and women gets 60 days
of menstruation leave. This leave is given to the employees when women gives birth to a baby.
Menstruation leaves are practiced almost all the organizations around the world and is
compulsory on international rights.

Emergency leaves.
Emergency leaves refers to the leave given to the employee under an emergency. This can be
taken at any time of the year. Even not yet been for the one year even. This leave is mostly taken
unplanned. leave consist of 10 days per year. Not more than that, if employee wants to continue
more than 10 days than he or she should take some other kind of a leave.

No-pay leaves.
No-pay leave is given to the employee if the employee have to leave for long duration of time.
This leave is given to the employees mostly due to medical condition of an employee or a family
member. No-pay leave has no exact number of days. Mostly employees take this leave for a long
period of time, as like for year or two.

Sick leaves.
Sick leaves, this is known as the most common type of leaves employees take. These leaves can
be taken when the employee is sick. This is also an unplanned leave that employees take. This
leave consists of 30 days per year. Employees take sick leaves in one or two days manner. A
good employee does not take this leave much often. It is not advised to take sick leave unless the
employee is sick and it is not advised to take 30 days of sick leaves per year.

Medical insurance.
Medical insurance is given to the all the employees at the organization. Medical insurance covers
all the medical expenses of the employees. Mostly this is covered with in the Maldives context.
But depending on the employee condition the company broads the medication to abroad. All the
expenses are covered by the organization under the medical insurance scheme of the
organization.

Education expenses.
Company will spent on further studies of the employee from national level to international level.
Scholarships are to their employees from different regions of countries. This expenses are
invested on employee when the employee reputation and work performance matches the
organizational goals. Hence chances given to those who are interested in further studies and
mostly from their field of interest.

Recreational programs
Recreational programs are conducted on monthly basis. Management sees team work building,
employee motivation and good health is very important for employees. Organization conducts
different kinds of activities include, football matches, basketball matches and many other sport
activities.

Non-monetary Compensation.
Non-monetary compensations is not part of the remuneration package. This is related to the work
environment, physical and psychological state of an employee. Non-monetary compensation
includes recognition of the employee for the appreciation of their works, challenging job, a
physical working environment. Alia Company practices all these kinds of non-monetary
compensations.

Alia company non-monetary compensations.

Appreciation of employees.
Employees are appreciated if the work they have performed is good enough. To appreciate their
work performance the conducts and says the word thank you and give certificates to recognize
the work of performance and throw parties to welcome and congratulate them. Moreover,
company divisions to divisions undertake employee of the month to recognize and highlight
employee performance.
In the core values of the organization it states that We recognize that our primary asset is
our people, and that a truly successful company needs to be a rewarding work
environment for its staff. Our organization is structured and managed to provide
ample opportunity and encouragement for our team to reach their optimum
potential. We believe that mutual respect forms the base of our success (Alia
construction, 2015).

Challenging work.
Organization assigns challenging work task to their employees as due maintain at the market
place of the industry. According to Nishan organization strategy is multitasking employees.
Which is very best way of saving time and money on recruiting employees. Employees are very
much motivated when they are assigned with many tasks.

Working environment.
Company provide one of the best working environment to their employees in the country. Almost
all the international standards are met in providing work environment. According to the safety of
the organizational values its states that Safety is a responsibility of every employee. At
ALIA we understand that accidents are prevented through cautious planning,
appropriate training, and cooperative efforts in all areas of our operations. All our
work is performed in the safest possible manner (Ali construction, 2015).

Rate of Pay determinants

Amount of pay can be determined after evaluating many factors. It is very important to
understanding every factor in determining the pay of an employee. As these factors will
influence the rate of pay on employees in company to company. Country to country. The factors
include, Knowledge, skill ability, size of the company, compensation rates, supply and demand
of labour, job responsibilities, employee performance, and period of service, labour strength,
management philosophy, geographic location and company profit. Almost every factor is taken
into account directly or indirectly in determining pay in the alia company (Mohd Faizal Mohd
Isa, 2012)..

Looking into the factors of pay determinants at the Alia

Company.
Knowledge, skills and ability.
This is factor is very important in determining pay. Employer should know how much
knowledgeable, skilled and educated person can hold a post. Thus information about the job is
used to determine job specification of the job. For example in Alia Company, for engineers it is
compulsory to have a degree in engineering to possess the requirements of the job.

Type of the company.

On different of companys there are different kinds of businesses and pay is different in different
business. For example payment for medical doctors will be very different from architectures.
Thus it is very important to take an account the types of jobs that will be carried out by the
companies. Vice versa, in Alia company, before determining payment the company takes to
account the type of business the company is undertaking.

Compensation rates.
Compensation rates are the main elements in attracting employees to the organization. Many
organizations practices different compensation rates to attract qualified candidates. Despite the

earlier days, now compensation package includes, allowances, bonuses, insurance, annual leaves
and family responsibility leaves etc. so to meet up with the best packages the company focuses
on the compensation rates in the market in determining the pay.

Supply and demand of labour

Supply and demand of labour at the market will influence in determining pay. So it has been take
into account in determining pay of jobs. Alia Company practices higher pay to attract certain
applicants to the organization. According to Nishan the main key role of getting employees is
getting professional employees to the organization. High professions, high standards. The main
reason is to attract qualified, skilled employees to the organization.

Job responsibilities
Job responsibilities is defines the job or the post. In an every organization there many different
posts with different responsibilities. Every job performs a different responsibility which means
rate of pay should be determined by the responsibilities of the job. As for example an engineer
job responsibilities will be different from a manager. Thus this factor is taken as account in
determining pay in the alia company.

Employee performance
Employee performance determines how much he/she works at the organization to achieve
organizational goals. The way employees performs will influence the employer to increase or
decrease the rate of pay to the employees.

Period of service.
Period of service can be defend as the number of years that an employee has worked in an
organization. Number of years, services will mostly influence rate of pay to increase. According
to Nishan, theres an old employee whose been working in the organization for almost 40 years.
His post is never changed but the rate of pay is being changing year to year .

Labour strength
Alia Company earning is higher than the labour cost, which means high pay for employees. This
factor is considered directly or indirectly on determining pay. As when the earning is low
compare to labour cost than the amount of pay is low.

Management philosophy
Alia Company sees employees are their most valuable assets, so they have been giving salaries,
allowances and other benefit more than the mandated rate by law. Hence one of the reason of
paying higher salaries and allowances is to attract qualified candidates and retain employees
within the organization.

Geographic location
This factor is very influential in determining rate of pay. As the company conducts many projects
at different locations around country. Living standard is different in different regions. For
example living expenses will be high on cities than the country side. This factor is taken into
account in determining rate of pay for their employees.

Company profit.
The amount of profit company gets on every quarter will lead to get high rate of pay to the
employees. This rate of pay is given by the name of bonus or increasing salaries of employees
annually.

In conclusion
Many factors will contribute job satisfaction of an employee in an organization. Which includes
challenging and interesting works. Job security etc. nevertheless job satisfaction of employees
cannot be achieved without paying the incentives to the employee. A satisfied employee would
expect and hope that he will be paid fairly compare to the job responsibilities. Thus this has led
employer to create and develop systemic compensation system. Compensation system consist of
monetary compensation, in-direct monetary compensation and non-monetary Compensation
systems. These system will allow to give fair and equitable way of compensations to the
employees in a systemic way. Monetary compensations given by the alia organization includes,
basic salary, attendance allowance and annual salary increment. And indirect monetary
compensation includes, annual leaves, sick leaves, family responsibility leaves, menstruation
leaves, insurance, education and recreational programs. And on non-monetary compensation
includes recognition of the employee for the appreciation of their works, challenging job, a
physical working environment. These all components are evaluated by determining rate of pay
factors. Which includes Knowledge, skill ability, and size of the company, compensation rates,
and supply and demand of labour, job responsibilities, and employee performance, period of
service, labour strength, management philosophy, geographic location and company profit.
Almost every factor is taken into account directly or indirectly in determining pay in the alia
company

Bibliography
Ali construction. (2015). Safty . Retrieved from www.aliacontractors.com:
http://aliacontractors.com/safety/
Alia construction. (2015). Core Values. Retrieved from www.aliacontractors.com:
http://aliacontractors.com/about/core-values/
Aliacontractors. (2015). Alia Construction (Pvt) Ltd. Retrieved from
http://aliacontractors.com/about/: http://aliacontractors.com/about/
Mohd Faizal Mohd Isa, W. S. (2012). Compensation managment . kulalumpur : OUM.