School of management sciences

PRESENTATION OF COMPENSATION MANAGEMENT

MANAGEMENT

HUMAN RESOURCE MANAGEMENT

HR is a part of management discipline It is not a discipline in itself, but is only a field of study. HR process is just like management process. It is concerned with people in the organisation both present and potential.

HUMAN RESOURCE MANAGEMENT

The most effective use of people. A set of programs, functions and activities. A part of management discipline. A continuous process. Prime tool for bringing people in the organization. Directed towards achievement of objectives. Universal existence.

HRM AS A SUB-SYSTEM OF AN ORGANISATION

FUNCTION OF HUMAN RESOURCE MANAGEMENT

MANAGERIAL FUNCTION

OPERATING FUNCTION

PLANNING ORGANISING STAFFING DIRECTING CO-ORDINATING CONTROLLING

RECRUITMENT SELECTION TRAINING & DEVELOPMENT PERFORMANCE APPRAISAL COMPENSATION PROMOTION

PLANNING

Planning is a deciding stage that what is to be done exactly. It involves identification of alternatives and decision making. We consider that it includes forecasting and set of programs, procedure to achieve goal.

ORGANISING

Organizing includes identification and grouping of work activities. It brings specialization. It helps in duplication of work. It provides better coordination.

STAFFING

Staffing means putting people to jobs. It is key to other managerial function. Staffing injects life into the organization which is otherwise an empty shell of job positions.

DIRECTING

Relates to all levels of management that includes guiding, supervising, communication, motivation, leadership. It initiates action. It flows from top to bottom.

Coordination

The essence of management rather than a separate function. Concerned with the unifying the action of a group of people. Integrates group efforts. Reduces cost. Responsibility of all managers.

CONTROLLING

Involves some restriction, corrective action, handling situation. It ensures that actual activities confirmed to planned activities. Helps in financial matters. Helps in minimizing errors. Ensures better planning and coordination.

RECRUITMENT

Recruitment is the process of identifying prospective employees, stimulating, encouraging them to apply for a particular job or jobs in an organization.

SELECTION

Selection is the process of examining the applicants with regard to their suitability for the given job and choosing the best from the suitable candidates.

TRAINING & DEVELOPMENT

The process of increasing knowledge and skills of an employee to perform a particular job. It increases job satisfaction and reduces the rate of overturn and absenteeism.

PERFORMANCE APPRAISAL

Performance Appraisal is a systematic evaluation of present potential capabilities of personnel. It is a process of collecting, analyzing and evaluating data relative to job behaviour and results of

PROMOTION / TRANSFER

It involves shifting of an employee from lower jobs to a higher jobs, caring higher responsibilities, facilities, status, and pay. It helps in filling up the vacancies at higher level.

COMPENSATION

Human Resource Manager

Compensation Management

COMPENSATION MANAGEMENT

Provides appropriate remuneration to employees for their contribution to achieve organizational objectives. It is an integral part of human resource management. compensation is the glue that binds the employee and the employer together.

NEED OF COMPENSATION MANAGEMENT

A good compensation package is important to motivate the employees to increase the organisational productivity.

Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.

The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.

Salary is just a part of the compensation system, the employees have other psychological and selfactualisation needs to fulfil. Thus, compensation serves the purpose.

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.

If the compensation offered is effectively managed, it contributes to high organizational productivity.

COMPONENETS OF COMPENSATION SYSTEM

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.

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 STRUCTURE
DIRECT COMPENSATION

INDIRECT COMPENSATION

BASIC SALARY HOUSE RENT ALLOWANCES TRAVEL ALLOWANCES BONUS CONVEYANCE SPECIAL ALLOWANCES MEDICAL REIMBURSEMENTS

LEAVE POLICY OVERTIME POLICY HOSPITALISATION PROVIDENT FUND PENSION GRATUITY EDUCATION LOANS

BASIC SALARY

Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month, etc. It is the money an employee receives from his/her employer by rendering his/her services.

HOUSE RENT ALLOWANCES

Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to

TRAVELLING ALLOWANCES

These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization.

BONUS

Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one months salary of the employee.

CONVEYANCE

Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.

SPECIAL ALLOWANCES

Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc These are provided to employees to provide them social security and motivate them which

MEDICAL REIMBURSEMENTS

Organizations also look after the health conditions of their employees. The employees are provided with medicclaims for them and their family members. These medic-claims include healthinsurances and treatment bills

LEAVE POLICY

It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves,

OVERTIME POLICY

Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay, etc.

HOSPITALISATION

The employees should be provided allowances to get their regular checkups, say at an interval of one year. Even their dependents should be eligible for the medic-claims that provide them emotional and social security.

PROVIDENT FUND

It is a fund which compulsorily saves money from your salary for your future and particularly afterretirement life.

PENSION

Post-retirement benefits that an employee might receive from some employers. A pension is essentially compensation received by the employee after he/she has retired.

GRATUITY

Gratuity is a part of salary that is received by an employee in gratitude for the services offered by the employer in the company. It is a retirement benefits offered by the employer to the employee upon leaving his job. An employee may leave his job for various reasons, such as retirement/superannuation, for a better job elsewhere, on being retrenched or by way of voluntary retirement.

EDUCATION LOANS

It is designed to help students pay for university tuition, books, and living expenses. It may differ from other types of loans in that the interest rate may be substantially lower and the repayment schedule may be deferred while the student is still in education.

Objectives OF COMPENSATION MANGEMENT

To formulate compensation plan To establish criteria for wages, salary, determination To establish job evaluation system To ascertain on going rates for job in an industry or community To make policy recommendation To evaluate employer performance To establish fringe benefit & other supplementary compensation. To supervise & maintain records pertained to all matter or compensation To help the management to frame a compensation policy as per the business goals and objectives To promote the desire values in the organization To acquire qualified professional To retain existing employees Control cost Efficient allocation of labor

To formulate compensation plan

To establish criteria for wages, salary, determination

To establish job evaluation system

To ascertain on going rates for job in an industry or community

To make policy recommendation

To evaluate employer performance

To establish fringe benefit & other supplementary compensation.

To supervise & maintain records pertain to all matters of compensation

To help the management to frame a compensation policy as per the business goals and objectives

To promote the desired value in the organization

To acquire qualified professional

To retain existing employees

Control cost

Efficient allocation of labor

Importance Of Compensation

To attract & retain labor To induce essence of commitment to the organization To promote harmonious employer employee relationship To generate good moral in the employees To provide a satisfying healthy &safe work environment To promote employer welfare To help in the image building of the organization To meet other requirement for the protection of employee against old age, sickness &other contingencies such as accident &emergencies

attract & retain labor

To induce essence of commitment to the organization

To promote harmonious employer employee relationship

To generate good moral in the employees

To provide a satisfying healthy &safe work environment

To promote employer welfare

To help in the image building of the organization

To meet other requirement for the protection of employee against old age, sickness &other contingencies such as accident &emergencies