Presentation on Bonus, Incentive ,Social Security and Ethical Consideration

Presented by: Sakshi Sharma Yashsvi Sen

Bonus
Bonus pay is compensation over and above the amount of pay specified as a base salary or hourly rate of pay. The base amount of compensation is specified in the employee offer letter, in the employee personnel file, or in a contract.

 Bonus pay can be distributed randomly as the company can afford to pay a bonus, or the amount of the bonus pay can be specified by contract. Bonus pay is used by many organizations as a thank you to employees or a team that achieves significant goals. Bonus pay is also used to improve employee morale, motivation, and productivity. As long as bonus pay is discretionary by the employer, it is not considered to be a contract. If the employer promises a bonus, however, the employer may be legally liable to pay the bonus.

Incentive
Incentive compensation is a type of compensation based on the performance of an entity. Often incentive compensation plans are designed to attract and retain key employees, identify with shareholders, and align interests of employees and the company For instance, in the Unites States many corporations pay their executives and employees incentive bonuses based on multiple performance measures.

 The following criteria might be considered when drafting an incentive compensation plan: Performance measurements Eligibility Plan period Award size and frequency Vesting schedule Formal plan

Social security
Social security benefits provided by an enterprise should protect not only their employees but also their family members through financial security including health care. Social security thinks that the employees shall be protected against all types of social risks that may cause undue hardships to them in fulfilling their basic needs. In India, provision for social security to the workers occupies a very important place in the industrial set up. It is included in our Constitution under the Directive Principles of State Policy.

 The social security broadly covers two categories of labour welfare measures:- (i) those relating to the medical facilities, compensation benefits and insurance coverage to the employees;

(ii) those relating to the provident fund and gratuity provisions. It thus consists of all types of preventive, promotional and protective measures for labour welfare.

ETHICAL CONIDERATIOIN
An ethical consideration refers to the ethical principles that are used when tackling a particular issue. Ethics are codes or rules which govern those practices of a profession.

There are ethical issues in compensation is pertaining to the salaries, executive perquisites and the annual incentive plans etc. The HR manager is often under pressure to raise the band of base salaries. There is increased pressure upon the HR function to pay out more incentives to the top management and the justification for the same is put as the need to retain the latter. Further ethical issues crop in HR when long term compensation and incentive plans are designed in consultation with the CEO or an external consultant. While deciding upon the payout there is pressure on favouring the interests of the top management in comparison to that of other employees and stakeholders.

 Of all the organisational issues or problems, ethical issues are the most difficult ones to handle or deal with.

Issues arise in employment, remuneration and benefits, industrial relations and health and safety.

Thank you