Compensation Mgmt

R.SURESH

Compensation
 Compensation

Concept and context  Introduction to Compensation  Role of Compensation and Rewards in Organisation Economic and Behavioural issues in Compensation Framework of Compensation Policy

Concept of Compensation
 Whats  Why

Compensation ?

is it important ? Strategies

 Compensation

Whats Compensation
 It

does not mean the same to everyone.  For some its a return in an exchange between their employer and themselves  For some its a measure of justice  For some its an entitlement, or Reward.  For some its their return on their investments and contributions

Compensation Contd..
 In

English Compensation means something that counterbalances, offsets or makes up for something else.  New economic Environment  We can conclude Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship.

Organisation as a Network of returns

1. 

Transactional Returns or Total compensation Cash compensation (Base,COL, incentives etc) and Benefits(Income protection, worklife focus,Allowances etc) Relational Returns Recognition and status, employment security, learning oportunities, challenging work etc

2. 

Compensation Strategies
Compensation Strategy  Philosophies of compensation  Sector wise compensation  Industry Compensation benchmarks  Theories on wages  Laws related to Compensation
 Whats

Compensation


Employee compensation is of one the major determinants of employee satisfaction in an organization. The compensation policy and the reward system of an organization are viewed by the employees as indicators of the managements attitude and concern for them. It is not just the compensation in toto, but its fairness as perceived by the employees that determines the success of a compensation management system.

Issues in wage determination

 Organisations

Margins  Labour Market Demand and Supply  Cost of living Consumer Price Index  Society Social considerations, social philosophies etc  Economy Capitalism, Backlash against capitalism

Compensation
 Very

important for the management to design and implement its compensation system with utmost care and tact.  A good compensation system should be able to attract and retain employees, give them a fair deal, keep the organization competitive and motivate employees to perform their best.

Compensation
Work concept - Traditionally, pay scales in companies reflected the importance of the work and the responsibility level.  Worth Concept - Today organizations try more to assess the worth of an individual in terms of his performance and contribution to the organization.  Growing demands of the workforce and the constant challenges in the business environment, organization strive for a systematic, constant, and accurate manner to determine. It also helps in estimating the basic pay for each job in accordance with the importance of the job in the organizational hierarchy.


Relevant Legislations in Wages

 The  The

Payment of Wages Act 1936 Minimum Wages Act 1948

Incentives
 Individual

incentive plan  Group Incentive plan  Organisations wide incentive plan  Payment by results to indirect workers

How to make incentives successful

 Proper

climate  Simple to understand and implement  Equitable  Flexible  Not be very costly  Not be detrimental to health of employees  Transparent and open to discussion

Job Evaluation Programmes

 What

do they mean ?

 Issues

and Problems in designing a Job Evaluation Program

 How

to implement a successful Job Evaluation Program

Wage Boards and Collective Bargaining

collective Barganing  Its Benefits
 Whats

Boothalingam Commitee


Ravi Bhoothalingam serves as President of The Oberoi Group and was responsible for the operations of the Group worldwide. Mr. Bhoothalingam is a Specialist in the dynamic field of Human Resource Development having spent a significant part of his career in this area. Mr. Bhoothalingam served as Head of Personnel at BAT PLC, Managing Director of VST Industries Ltd. Mr. Bhoothalingam served as President of the Employers' Federation of Southern India, member of the government ...

Profile of Mr. B


Mr. Bhoothalingam has been an Independent Director of Dr. Reddy's Laboratories Ltd. since 2000. He serves as a Director of ITC Limited. He also serves as Director of Nicco Internet Ventures Limited and as an Independent Director of Sona Koyo Steering Systems Limited. Mr. Bhoothalingam serves as Member of the Advisory Board of Genesis Public Relations Pvt. Ltd. and Genesis Burson-Marsteller. He holds a Bachelor of Science degree in Physics from St. Stephens College, Delhi and a Master of Experimental Psychology degree from Gonville and Caius College, Cambridge University. .

Recommendations
   

 

It would not be possible for us to do away with wage differentials today altogether. Depending upon the availability of skills the wage differentials will vary Wage drift is nothing but wage differentials BC examined this problem reasonable wage differentials between different kinds of jobs. Narrow down the differentials BC realised the difficulties in rationalisation across If collective bargaining is accepted as the mechanism that should evolve overtime to determine wages the it would include wage differentials for skills,output and performance according to BC

Boothalingam commitee
 BC

gave lots of suggestions on wage ratios  The difference between highest and lowest is to be 1 to 10.  Suggested the National Pay Commission

Job Analysis and Design

do they mean ?  The purpose  Job Analysis -The process  Strategic Choices  The level of details  Information gathering
 What

Job Analysis and Job Design

Rotation Moving jobs to reduce boredom and add variety.Same skills  Job Engineering tasks,interdependency, methods,workflow,tools,etc  Job Enlargement Task variety,  Job Enrichment more decision making power
 Job

Nature of job Analysis

Whats a joba job is a bundle of related tasks  A synonym for job is work physical and mental activity is done in return for money  Jo analysis refers to the process of collecting information about a job or  Job analysis is the tool for collecting job related data.


Nature of Job analysis

 

The two by products of JA are job description, and Job specification. Job description indicates what all a job involves tasks, responsibilities,job title, duties,tools, working conditions etc Job description are the abilities required to discharge the tasks education, trg, skill,communication skills, sensory demands such as sight, smell, hearing etc.

Job specifications
 Cabin

crew (KF) height 160 to 175 cms, (KF) clear compelxion, no blemishes, scars, tatoos  JK Tyres Tyre builder min 6 feet, wt 58 kgs

Job design
 

  

JD is the logical sequence to job analysis It involves efforts to organise tasks, duties, and responsibilities into a unit of work to achieve certain objectives. JD Specification of individual taks (content) JD Specification of methods of performng each task JD combination of tasks into specific jobs to be assigned to individuals (content)

Benefits of Job analysis

HR Planning  Employee hiring  Training and Development  Performance Appraisal  Salary and wage fixation  Safety and Health


Job Analysis and Design

Design logical sequence to JA  Steps in Design  Factors affecting Job Design  Environmental Factors  Behavioral Elements
 Job

Human Resource Planning

 Importance

of HRP  Environmental Scanning  Organisation Objectives and policies  Demand Forecast  Forecasting techniques  Supply Forecast

Human Resource Planning

 Management

inventories  Skills inventories  HR Plan Implementation  Managerial Succession planning  How to make HRP successful  Barriers to Human Resource planning

Employee Engagement


In India Global firm they identified five distinct employee segments:

(a) Fully

engaged 30% engaged 25% 20%

(b) Almost

(c) Honeymooners (d) Crash

& burn and 10% 15 %

(e) Disengaged

Manpower Planning
 The

global survey shows that 35 per cent

of the employees in India are fully engaged and 13 per cent disengaged. As many as 29 per cent are almost engaged.

THANK YOU