Download - 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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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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