Professional Documents
Culture Documents
COMPENSATION MANAGEMENT
Compensation: An Overview
Compensation - Total of all rewards provided to employees in return for services Direct financial compensation - Pay received in the form of wages, salaries, bonuses, and commissions Indirect financial compensation - All financial rewards not included in direct compensation Nonfinancial compensation - Satisfaction a person receives from job itself or from work environment
Determinants Compensation
Organization Labor market Job Employee
Organization
Compensation Policies
Pay leaders Pay higher wages and salaries Market rate-, or going rate :Pay what most employers pay for same job Pay followers pay below market rate because poor financial condition or believe they do not require
Ability to Pay Organizations assessment of its ability to pay is important factor in determining pay levels. Profit levels, asset levels, consistency Salary as percentage of total expenses
1993-94
% Workforc e 64.0 14.9 21.1
2004-05
% GDP 20.2 26.1 53.7 % Workfor ce 56.5 18.8 24.8
October 2, 2007
UN Meeting
THE JOB
Definition And Objectives of Job Evaluation: Job evaluation is the systematic process of analyzing and evaluating jobs to determine the relative worth of each job in an organization. Objectives:
To determine the position and place of a job To clarify responsibility and authority To ensure satisfaction in compensation To avoid discrimination in compensation
Quantitative
Non-Quantitative
Ranking Method
Fair wage
Fair wages are higher than minimum wage level and is related to the productivity of the labor.
Living wage
Living wages enables the male earner to provided for himself and his family.
Skill-based plan
Employees are paid for the job-related skills
Competency-based pay
Competencies of the best performing employee are identified and is paid for the competencies. Other employees are paid based on these competencies.
Broad banding
It reduces the number of salary levels into broad salary bands. The bands have a fixed minimum and maximum that overlaps with other bands.
In variable compensation, employees are paid in accordance with their performance and not in accordance with their position in the organizational hierarchy.
Executive compensation is paid to the CEO or the top executives of an organization.
CONCEPT OF REWARDS
Organizational rewards are those that the employees earn as a result of his/her employment with the organization.
Types of Rewards
Short-Term Plans
Long-Term Plans
Progressive Bonus
Gainsharing
Profitsharing
Annual Bonus
Distribution Plan
Non-monetary incentives
Recognition Challenging assignments Additional responsibility Rewarding
Employee benefits
Free or subsidized lunches Medical facilities Paid holiday / vacation PF and gratuity Employee insurance Maternity leave Child-care centres Educational allowances Company accommodation Tax assistance
To match growing cost of living To reward employees for their employment with the organization To satisfy the union's demands To attract and retain talent
HR FOCUS
Definition and objectives of Job Evaluation Process, techniques, advantages and limitations Concept of wage and salary administration Basic wage plans Employee benefits Objectives, history and evolution of employee benefits