Compensation Management
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Compensation management SAURABH JAIN
COMPENSATION MANAGEMENT • Objective . • Definition. • An Integral Part of Human Resource Management.
TYPES OF COMPENSATION • • • •
Direct Indirect Variable Executive.
TRENDS IN INDIA • Compensation trends in India changed with liberalization in 1991. • Government was the biggest job creator • Guaranteed pay determined by agreement between employee unions and Government • Private sectors made government pay scales as
CURRENT TRENDS Factors that influenced compensation post liberalization § § § § §
Increase in productivity gains Fast growth in real wages Faster GDP growth IT and Outsourcing services Average salary increases over 2005-06 ranged from 10% to 40%
FACTORS DEVISING PAY STRUCTURE • Job evaluation. • What must be paid to attract right people • Affordability of the organization • Requirements to meet organizational goals • It must have 2 componentsbase rate and scope for
THE CONCEPT OF WAGE AND SALARY Compensation administration. The principles governing compensation administration. • • • •
a)Maintaining equity. b)Maintaining competitiveness. c)Matching employee expectations. e)Devising a most efficient
THE PURPOSE OF WAGE AND SALARY ØAttracting a talented resources. ØRetaining and motivating employees. ØFinancial management. ØLegal requirements.
CONCEPTS OF DIFFERENT WAGES. üMinimum wage (The six norms). üFair wage . üLiving wage.
BASIC WAGE PLANS ØTime wage plan. ØPiece wage plan. ØSkill-based wage plan. ØCompetency based pay. ØBroad banding.
Types Of Incentive Plans
Rowan Plan
Long term Plans
Barth System
Gain Sharing
Halsey Plan
Short Term Point Rating system Plans Progressiv e Bonus
Annual Bonus
Profit Sharing
Employee Stock Option
NON MONETARY INCENTIVE • Recognisation • Assigning challenging assignment. • Giving additional responsibility. • Giving non cash rewards. • Awards for exceptional performance and valuable
GUIDELINES • Linked to employee’s performance • Communicated • Suggestions should be valued • Not affected by external factors • Should not add negative
WAGES POLICY IN INDIA • Minimum Wages Act, 1948.. • Payment of Wages Act, 1936.. • Payment of gratuity 1972 • Industrial Dispute Act, 1947. • Payment of Bonus Act, 1965..
COMPENSATION MANAGEMENT • Objective . • Definition. • An Integral Part of Human Resource Management.
TYPES OF COMPENSATION • • • •
Direct Indirect Variable Executive.
TRENDS IN INDIA • Compensation trends in India changed with liberalization in 1991. • Government was the biggest job creator • Guaranteed pay determined by agreement between employee unions and Government • Private sectors made government pay scales as
CURRENT TRENDS Factors that influenced compensation post liberalization § § § § §
Increase in productivity gains Fast growth in real wages Faster GDP growth IT and Outsourcing services Average salary increases over 2005-06 ranged from 10% to 40%
FACTORS DEVISING PAY STRUCTURE • Job evaluation. • What must be paid to attract right people • Affordability of the organization • Requirements to meet organizational goals • It must have 2 componentsbase rate and scope for
THE CONCEPT OF WAGE AND SALARY Compensation administration. The principles governing compensation administration. • • • •
a)Maintaining equity. b)Maintaining competitiveness. c)Matching employee expectations. e)Devising a most efficient
THE PURPOSE OF WAGE AND SALARY ØAttracting a talented resources. ØRetaining and motivating employees. ØFinancial management. ØLegal requirements.
CONCEPTS OF DIFFERENT WAGES. üMinimum wage (The six norms). üFair wage . üLiving wage.
BASIC WAGE PLANS ØTime wage plan. ØPiece wage plan. ØSkill-based wage plan. ØCompetency based pay. ØBroad banding.
Types Of Incentive Plans
Rowan Plan
Long term Plans
Barth System
Gain Sharing
Halsey Plan
Short Term Point Rating system Plans Progressiv e Bonus
Annual Bonus
Profit Sharing
Employee Stock Option
NON MONETARY INCENTIVE • Recognisation • Assigning challenging assignment. • Giving additional responsibility. • Giving non cash rewards. • Awards for exceptional performance and valuable
GUIDELINES • Linked to employee’s performance • Communicated • Suggestions should be valued • Not affected by external factors • Should not add negative
WAGES POLICY IN INDIA • Minimum Wages Act, 1948.. • Payment of Wages Act, 1936.. • Payment of gratuity 1972 • Industrial Dispute Act, 1947. • Payment of Bonus Act, 1965..
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