What Is Compensation?

Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.

To reward employees past performance To remain competitive in the labor market To maintain salary equity among employees To mesh employees future performance with organizational goals To control the compensation budget To attract new employees To reduce unnecessary turnover

To elicit desired behavior from employee. Motivate people to join the organization Motivate people to stay with the organization Motivate people to perform at high levels

Relational Returns from Work

Recognition & Status Employment Security

Challenging Work

Learning Opportunities

Labor Market Conditions Area Wage Rates Cost of Living

Compensation Strategy of the Organization

Worth of the Job

COMPENSATION

MIX

Employees Relative Worth

Collective Bargaining Legal Requirements

Employers Ability to Pay

Wages & Salaries in the organisation should be in line with wages and salaries for comparable jobs in other organisation. Ensuring that jobs in our company are paid the same as the same jobs (in terms of KSA)in other companies. Data relating to pay levels can be collected through W & S Survey. A salary survey reveals what other organisations pay for specific jobs and the basis for payment. Once the going rate prevailing in the region is known the co. can decide a higher or lower level for its employees without distrubing internal equity.

Ensuring that compensation for jobs that are similar in terms of KSA within the organization should be the same. It implies a proper relationship between wages paid for different jobs within the co. Pay differentials should be related directly to differentials between job requirements. Fair pay differentials between jobs can be established with the help of job evaluation.Job evaluation help to determine relative worth of a job.It is useful in eliminating widely varying wages for jobs of equal difficulty.It also minimises wage differentials on the basis of sex, religion, caste etc.

Merits: This scheme links compensation package to performance. It enables companies to retain efficient employees It encourages employees to work even better. It inculcates a sense of ownership and responsibility It establishes significance of team work among employees.

1.This scheme can be used by only profit making companies Falling share prices result in loss to employees. Unsound stock market conditions casue inconvenience to employees in encashing their investments.

Types of Nonmonetary Rewards

TREATS
Free Lunches Coffee Breaks Picnics Dinner with the boss Dinner for the family Birthday Treats

Knick- Knacks
Desc accessories Company watches Tie-pins,brooches Diaries,Planners Calendars Wallets T-Shirts

Types of Nonmonetary rewards

AWARDS
Trophies Plaques Certificates Letters of appreciation Scrolls

SOCIAL ACKNOWLEDGEMENT
Informal recognition Recognition at office gettogethers Friendly greetings ,smiles,email Solicitation of advice, suggestion Membership of recreation club Use of company facilities for personal projects

Types of Nonmonetary Rewards

TOKENS
Movie Tickets Dating allowance Vacation Trips Coupons redeemable at stores Early time offs Anniversary and Bday allowances ,presents

ON THE JOB More responsibility Job rotation Special assignments Training Representing the co. At public fora

Office Environment Redecoration Office with a window Piped music Flexible hours

A Zillion Thanks award for emp who helped his peer My Dear Boss Scheme Subordinate who wants to nominate his boss. Golden Banana award : Best Performer- H.P

Happy Nappy Day- H.P plays a Bday tune for its employees which resounds all over the org premises.
Sahara Airlines: organise joint Bday parties for emps at the end of each month.bday messages are displayed on co. noticeboards

X Factor: Concierge services: Emps are made free of their routine duties of paying bills, paying children school fees and other such necessary job unrelated chores. A co. rep is appointed to perform all such chores so that emps can concentrate more on their work Granny Gratitude Day- Jan,1st,designated holiday Budding Genius award

WIPRO: Feather in my Cap- for successful completion of project Encore for performing extraordinary in teams ICICI: Life is growth encourage people to participate and come up with new ideas. Saturday Kids club: Learning experience for Children P & G: Provides 10 days paternity leaves and 8 weeks leave for adopting the child legally. G.E : Hall of the fame award to best performing employees

NIIT Colgate Palmolive &Modi Xerox :Annual family days Tangerine Infomedia Oriental Craft Ltd Bharti Airtel City Bank Infosys Cadbury

1.Liberal housing Loans, soft loans i.e for conveyance and housing 2.Asset creation- such as co. car which can be purchased at a depreciated value 3.Post retirement medical benefits for life 4.Scholarships for managers children 5.Assignments abroad for short duration 6.Deputing to development programmes internal/external/abroad/ professional conferences 7.Membership of professional institutions 8.Study leave-India or abroad 9.Progressive cos single out star performers and structure their individualised innovative packages 10.Immediate impact rewards and recognition-Visible perks- cars and cabin

Flexible BenefitsEmployees tailor their benefit program to meet their personal need by picking and choosing from a menu of benefit options.

In an industry known for the short life span of its employees, Hughes Software Systems has evolved a highly successful strategy, to retain its high performers. They conducted a battery of surveys, interviewed employees, questioned employees, questioned those who did not join to know what made them turn down the job offer, held detailed exist interviews to identify bad experiences, unmet expectations and future areas of improvement. The managements proactive approach in making these policy changes built employee confidence and earned HSS the reputation of a caring organization. In any case, it is one company that extensively uses awards as the cornerstone of its retention strategy. The guiding motto seems to be Catch employees doing something right. To illustrate: Managers give Snap Awards for individual and team achievements, winding up with an office party

The company also offers a host of other Annual Achievement Awards on best initiative, best customer orientation, best team worker and the most innovative employee. These are besides the Presidential Awards in four categories for overall excellence, covering employees in all functional areas. Then there are Annual Awards for Best People Manager and Best Project Manager and score of popular awards based on voting for leadership, mentoring, etc. Other innovative awards include Award for best sense of humour, I would like to be like you, Terrific trouble shooter award, etc. In fact, at HSS any excuse is good enough for an award.

E-greetings are sent and the company celebrates longevity after six months of an employees joining by presenting her a special tag, followed by a full recognition ceremony after first year. Five years down the line, she gets a plaque and a Green Card of privileges!

All employees are covered under the Employee Stock Option Plan. HSS have leveraged on a number of positive factors like high-technology work; business and personal ethics; building a culture of, openness; access to international opportunities; constant appreciation; wealthcreation through ESOPs, etc.
The focus in HSS, therefore, was to create a learning environment where the role of leadership as mentors of younger employees is critical. Critical employees are recognized as Gyan Gurus Mentors, Buddies, etc. by subordinates, as well as, their senior managers. In sum, HSS is trying to create as many Glues as well as, their senior managers. In sum, HSS is trying to create as many Glues as possible to hold on to its people.