Compensation 1

By : JAWAD UMER KHAN

COMPENSATION MANAGEMENT  Compensation

is what employees receive in exchange for their contribution to the organization.

Total compensation = Direct + Indirect Compensation

Base Pay

Incentives

Benefits

COMPONENTS OF EMPLOYEE REMUNERATION Remuneration Non-financial

Financial Basic wages

Fringe benefits Medical care Accident relief Health and insurance

Incentives, Individual plans Group plans

Car Club membership Paid holidays Furnished house Stock option scheme

Supervision Working conditions Job sharing Telecommuting etc

OBJECTIVES OF COMPENSATION PLANNING          

Internal equity External equity Individual equity Attract talent Retain talent Ensure equity Payment for time not worked Health benefits Security Benefits Part-time employee benefits

PREMIUM PAY  Compensation

paid to employees for working long periods of time or working under dangerous or undesirable conditions  Hazard Pay - Pay provided to employees who work under extremely dangerous conditions.  Shift Differentials - Paid to employees for the inconvenience of working fewer desirable hours.

IMPORTANCE OF AN IDEAL COMPENSATION SYSTEM

Desire for more pay

performance strikes grievances search for options

absenteeism turnover

Pay dissatisfaction lower attractiveness of jobs

job dissatisfaction absenteeism

Low salary rigid or hard Work conditions poor mental health

INFLUENCING FACTORS OF COMPENSATION Compensation External Labour Market Labour Unions Govt. Legislations Society Economy

Internal Business Strategy Job evaluation & PA The Employee

DEVISING A COMPENSATION PLAN Job Description Job Evaluation Job Hierarchy Pay Survey Pricing Jobs

CHALLENGES OF COMPENSATION Skills-based pay

Compensation Pay Comparession Comparable worth

Severance Pay

Pay secrecy