Employee benefits

and compensation
in MNCs
Literature Review
 Compensation is known to influence employee attitudes and behaviours, which
eventually influence group and organization level outcomes. .(Gerhart &
Rynes,2003)

 Research on the consequences of compensation , usually treats managerial

compensation and non managerial employee’s compensation separately due to
the different implications for the organizations.

 Managerial compensation- Organizational level outcomes

 Non managerial compensation- Employee level outcomes

 Risk
Outcome Job
aversion
Uncertainty Programmability

Measurable Ability to
Tradition
Job pay
Outcomes
Current Practices

Employee Compensation
Benefits Structure

- Internal Factors
- Health Benefits
Goal orientation of the firm,
competitive strategy
- Retirement Benefits

- Transport Benefits
- External Factors
Location of the firm, Labor
- Education Benefits
market characteristics,
Local conditions
Gaps in policies

Rigid Less
rewarding Restrictive
incentive
environ- Policies
structure
ment

Low on Lack of
holistic extra-
develop- curricular
ment activities
Future of employee compensation
system  We now live in an economy
driven by talent.
As global markets grow more closely
integrated, companies are having to  the number of creative jobs
reinvent the workplace, which requires
more skilled, more reliable, and more
has doubled in the past 50
flexible employees. years.
 Average tenure at Amazon
And compensation models must and Google is just one year.
change as well. As the compensation
structure changes, workers are  31 percent of CEOs said talent
requesting benefits from companies that
add value to their lives
constraints had already
hampered innovation at their
organizations.
Organisations in the public sector don’t
pay competitively , so they have started
making it up in different ways
Recommendations for future
compensation system
Payment of a one-time, singular amount installment for an outcome or result that deserves acknowledgment

Payment of small rewards with “Thank you” notes for going out of the way to solve issues

Attention should be paid on additional benefits such as educational assistance, legal assistance and vision
assistance.

Clear career paths for the employees along with proper mentorship so that they don’t feel distracted

Companies should introduce nontraditional benefits, such as child and elder care, flexible medical benefits,
employee assistance programs, and investment education

Performance assessment should include methods which are directly related to the work and are more transparent
Conclusion
 Aimed to determine what impact rewards systems within organisations have on
performance.
 Shift from a very narrow based reward structure involving only pay, to one which
incorporates other rewards.
 The importance of building a transparent and relevant reward structure, closely
linked to organisational design, strategy and culture.
 The relevance of motivation-- the appeal or perceived value of the rewards on
offer to an individual employee or a group of employees.
Reference

 http://ipublishing.co.in/ajmrvol1no1/volfive/EIJMRS5004.pdf
Thank you