AN ASSIGNMENT ON

PAYROLL MODEL
Course Name: Compensation Management Course Code: HRM 412 Section: 2

Submitted to: SSM Sadrul Huda

Assistant Professor. Department of Business Administration.

GROUP MEMBERS
NAME
1. Razib ud Dowlah 2. Md. Muqib-UL-Ahsan 3. Kashfia Ahmed 4. Sohana Nowshin 5. Sharmeen Farha Samantha

ID

2009-1-10-258 2009-1-10-151 2009-1-10-257 2009-2-10-053 2009-2-13-015

Compensation is a critical piece of overall human resource strategy. Because compensation is both visible and important to employees, a compensation program designed to communicate and reward strategic goals increases the probability that employees will not only understand what those goals are but also will achieve them. Because employees also understand that compensation dollars are important to the organization, the strategic intent of other human resource efforts, such as performance management, recruiting, career development, and the like, is also clearer if their designs are consistent with the compensation program. In short, realization of compensation strategy requires that the money match the message. Developing a compensation strategy requires the same process of definition, diagnosis, and design described above for human resource strategy.

COMPENSATION:
Direct and indirect monetary and nonmonetary rewards given to the employees on the basis of the value of the job, their personal contributions and their performance. These rewards must meet both the organizations ability to pay and any governing legal regulations.

WHICH COMPENSATION DECISIONS ARE STRATEGIC?

Strategy refers to the fundamental directions of an organization. Strategies serve to guide the deployment of all resources, including compensation expenditures. But not all compensation decisions are strategic. Only those decisions that are critical to the success of the business are strategic, such as those that affect labor costs and performance. Decisions about techniques, such as which job evaluation plan to use or where to slot the compensation manager in the pay structure are probably not strategic. Policy decisions, such as linking a portion of pay increases to corporate and unit performance and determining the competitive position in the market, probably are.

EON Groups Payroll Model & Compensation system:

Eon group has also a payroll model of their own. They have a separate HR department to maintain the system. The accounts and the MIS department are also related with this. They maintain the hierarchy to compensate. They give salary to the employees on the basis of their skills and performance of the job. Every year high management evaluates the employees performance and gives reward for that. They also recheck their payroll model every year. Without these they also give extra bonus every year. Actually EON get the competitive advantage in the agriculture industry because of their strategy based payroll model. They want be the market leader of the industry. For that reason they have paid the right salary to the right person. They always try to follow the compensation strategies though this practice is not followed by the Bangladeshi companies. They have good management body to conduct the business. Employee contribution is also very successful in the company. Because all the employees are aware of their job and they try to perform their best to get the promotions. In the payroll model they divide the salary in different segments. Its helps them to give the right salary to the right person. They can evaluate the performance very easily. So is being a local company EON have also a structured payroll model. Here we worked on the EORU FEED Ltd. of the company. About their pay scale, salary style, hierarchy, different segments of the pay model etc.

PAYROLL MODEL
Compensation Strategies of EON Group:
1. Objectives: As an agro based company their first objective is to focus the customers. Recognize contributions. Attract and reward the best. Mainly most of the companies follow these types of objectives. So EON is also based on these objectives. They mainly focus on Efficiency Fairness Compliance. 2. Internal Alignment: Minimize the hierarchy. Decisions on internal structures determine the distribution of base pay to different jobs or skills. Pay fairly. Support growth opportunities. 3. External Competitiveness: Market value of jobs establishes overall pay parameters. Give incentives for achieving business goal. Market competitive in base and benefits. The model based almost exclusively on what competitors pay. They are having new ideas about compensation. Payroll model is better than the others. The competitive position managers chose affects the quality of the work force and its overall costs. 4. Employee Contributions: Recognize individuals contributions and performance. Differentiate on bonuses. They also follow the incentive programs. Every year they re check their salaries. 5. Management: Love employees. They have technology support. They ensure that the right people get the right pay. They influence managers' sense of ownership and employees' views of the fairness of their pay. Both ownership and fairness are thought to be achieved through decentralization, participation, and communication.