compensation & benefites

8/22/2019 COMPensation & benefites

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CURRENT TRENDS

PALLAVI KARANDE

ROLL NO:26


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Compensationobjectives

To reward employees past performance.

To attract and retain competitive high performing

employees.

Acts as a source of motivation.

Communicating to the employee their worth in the

organization.


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Compensation Policy Issues

Pay for performance

Pay for seniority

Salary increases and promotions

Overtime and shift pay

Probationary pay

Paid and unpaid leaves

Paid holidays


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Salary compression

(A salary inequity problem, generally caused by

inflation, resulting in longer-term employees in a

position earning less than workers entering the firmtoday)

Geographic costs of living differences


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6/18

Legal framework for payment of salary in

India

Payment of wages Act, 1936:- any sum to which the personemployed is entitled under any scheme framed under any lawfor the time being in force ;but does not include-

(1) any bonus

(2) the value of any house accommodation

(3) any contribution paid by the employer to any pension orprovident fund

(4) any travelling allowance or the value of any travellingconcession .

The Minimum Wages Act,1948:- a basic rate of wageswith or without the cost of living allowance and the cashvalue of the concession in respect of supplies of essentialcommodities at concession rates, where so authorized.


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The Payment of Bonus Act,1965:-in relation to a corporation,

the year ending on the day on which the books and

accounts of the corporation are to be closed and balanced; (ii) in relation to a company, the period in respect of which

any profit and loss account of the company laid before it in

annual general meeting is made up, whether that period is

a year or not.

Equal Remuneration Act,1976:-An Act to provide for the

payment of equal remuneration to men and women

workers and for the prevention of discrimination, on theground of sex, against women in the matter of employment

and for matters connected therewith or incidental thereto.


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Changing trends of Compensation management

Motive-Coping up with the current competition.

Attract, retain and motivate high performing

employees.

Changing business environment.

Downsizing

Transition to flexible or contingent work force.


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WHATS NEW?

Competency based pay and reward

programmes.

What is competency-based pay?

Where the company pays for the range, depth, and

types of skills and knowledge, rather than for the job

title he or she holds.


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CompetenciesDemonstrable characteristics of a person, including

knowledge , skills and behaviors that enable

performance.

Why use competency-based pay systems?

Paying for skills , knowledge and competencies ismore strategic.


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Broad banding

Reducing the number of pay grades while expanding

the actual salary ranges.

Benefit :Being able to expand the actual pay for performance

and competency component.


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Incentive Compensation

Directly connected to the performance of the

individual or the team.

Benefit :

Increases employee performance in the right

environment.

Employees efforts and results are measurable and

the potential rewards are significant.


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Stock options

Granting employees the right to purchase a specific

number of shares of the companys shares at a

guaranteed price during a designated time period.

Benefits-Motivating the employees to work hard to create the

best possible value for their company.


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The Sweetness of Executive Perks

Company carChauffeur service

Executive eating facilities

Financial consulting

Company-paid parking

Personal liability insurance

Estate planning

First-class air travel

Home computers

Mobile phones


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Childrens education Spouse travel

Physical exams

Large insurance policies

Income tax preparation

Country club membership

Luncheon club membership

Personal home repairs

Loans

Vacation cabins


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RECENT TRENDS A FEW EXAMPLES

In HINDUJA Group , the management identifies star

leaders who are then sent on vacation with their

family.

ICICI provides great opportunities to their highperformers.Also they have locked in their key people

with significant stock options.

ADITYA BIRLA Group has built a great sense of

belonging and a sense of security for their leaders

Eg:Providing best Education facilities for the

children of Employees etc


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COGNIZANT has employed the policy of giving

instant reward to their employees like t-shirt and

mug with their logo.


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compensation & benefites

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