handfab a living (panipat

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A

SUMMER TRANING REPORT

ON

COMPENSATION MANAGEMENTHANDFAB A LIVING (PANIPAT)

(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE DEGREE

OFBACHELOR OF BUSINESS ADMINISTRATION

(SESSION)

SUBMITTED TO: SUBMITED BY:

MISS NISHA GUPTA ASHIMA JUNEJA

B.B.A. III YEAR

CLASS ROLL No. 7872

UNIVERSITY ROLL No..

I.B.(P.G.) COLLEGEAFFILIATED BY

KURUKSHETRA UNIVERSITY, KURUKSHETRA


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DECLARATION

I ASHIMA JUNEJA student of B.B.A. III year in I.B.(P.G.) College, Panipat

hereby declare that the project report entitled COMPENSATION

MANAGEMENT

HANDFAB A LIVING submitted for the degree of B.B.A. III year is my

original work and the project report has not formed the basis for the award of any

diploma, degree, associate ship, fellowship or similar other titles. It has not been

submitted to any other university or institution for the award of any degree or

diploma.

ASHIMA JUNEJA


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ACKNOWLEDGEMENT

Survey is an excellent tool for learning and exploration. No classroom routine can

substitute which is possible while working in real situations. Application of

theoretical knowledge to practical situations is the bonanzas of this survey.

Without a proper combination of inspection and perspiration, its not easy to

achieve anything. There is always a sense of gratitude, which we express to others

for the help and the needy services they render during the different phases of our

lives. I too would like to do it as I really wish to express my gratitude toward all

those who have been helpful to me directly or indirectly during the development of

this project.

I would like to thank my professorMISS.NISHA GUPTA who was always there

to help and guide me when I needed help. Her perceptive criticism kept me

working to make this project more full proof. I am thankful to her for his

encouraging and valuable support. Working under her was an extremely

knowledgeable and enriching experience for me. I am very thankful to her for all

the value addition and enhancement done to me.

No words can adequately express my overriding debt of gratitude to my parentswhose support helps me in all the way. Above all I shall thank my friends who

constantly encouraged and blessed me so as to enable me to do this work

successfully.

ASHIMA JUNEJA


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INDEX OF CONTENTS

INTRODUCTION TO THE INDUSTRY

1.0) INDUSTRY PROFILE

1.1) CARPET MANUFACTURERS IN INDIA

1.2) CARPET MANUFCTURING PROCESS

1.3) SWOT ANALYSIS OF CARPET INDUSTRY

1.4) OPORTUNITIES:

TOPIC2 INTRODUCTION TO THE COMPANY

2.0) INTRODUCTION TO HANDFAB

2.1) COMPANY PROFILE

2.2) COMMITMENTS

2.3) PRODUCTS

2.4) QUALITY

2.5) INFRASTRUCTURE

2.6) PRODUCTION CAPACITY

2.7) LOOMS AND MACHINES AVAILABLE WITHIN THE COMPANY

2.8) RESEARCH MARKETS


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CHAPTER 3 INTRODUCTION TO COMPENSATION SYSTEM

3.0) INTRODUCTION

3.1) COMPONENTS OF EMPLOYEE COMPENSATION

3.2) IMPORTANCE OF COMPENSATION

3.3) CONCEPT OF FAIR WAGES:

3.4) ADVANTAGES OF FAIR WAGES

3.5) FACTORS INFLUENCING WAGE AND SALARY STRUCTURE

3.6) SYSTEMS OF WAGE PAYMENT

3.7) ADVANTAGES OF TIME RATE SYSTEM

3.8) DISADVANTAGES OF TIME RATE SYSTEM

3.9) MERITS OF PIECE RATE SYSTEM

3.10) DEMERITS OF PIECE RATE SYSTEM

3.11) INCENTIVE SYSTEMS OF WAGE PAYMENT

3.12) FEATURES OR REQUISITES OF A GOOD INCENTIVE PLAN

CHAPTER4 RESEARCH METHODOLOGY

4.0)INTRODUCTION

4.1) JUSTIFICATION OF THE STUDY

4.8) TOOLS USED FOR ANALYSIS

4.3) THE BASIC TYPES OF RESEARCH ARE AS FOLLOWS

4.4) RESEARCH DESIGN

4.5) SAMPLE DESIGN


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4.6) METHODS OF DATA COLLECTION

4.7) DATA USED FOR THE PROJECT

4.2) OBJECTIVES OF RESEARCH

TOPIC5 FINDING & SUGGESTION

5.0) FINDINGS

5.1) RECOMMENDATIONS

5.2) CONCLUSION

TOPIC06

BIBLIOGRAPHY

EXECUTIVE SUMMARY


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In this project, the researcher analyzed the different aspects of compensation

system of . Prime objective was to understand and interpret the compensation

structure which includes various components such as wages, salaries, incentives,

perquisites & other benefits. As employee compensation is usually the single

largest expense. So, organizations continuously try to optimize the cost. But these

simple cost cutting measures are not always effective. And also employees create,

deliver and maintain most of the organizations value and losing those valuable

people in the organization can cost a lot.

This project includes components of compensation, its importance in an

organization, factors influencing compensation structure, wage payment system

and all other aspects related to compensation.

In this study, Descriptive Research Design has been used. This research design is

about the characteristics of particular things. The data used in this project is

collected from various websites, manuals, monthly periodicals etc. Researchers

analysis of the study undertaken is quite satisfactory which shows that this

company i.e. HANDFAB has good compensation system.


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CHAPTER1

INTRODUCTION TO THE INDUSTRY

1.0) INDUSTRY PROFILE

Carpet Industry is one of the oldest industries in India. Carpet Weaving was

brought to India by Moguls. Some of the majestic carpets were woven during this

Mogul era. Over the period, the weaver has become an artist, bringing the magical

exotic colors to the Indian carpets. Artists bring aesthetic touch to the carpets by

creating magic with colors and provide carpets an unusual beauty and elegance.

Indian Carpet Industry has always been an important part of Indian export industry.

Carpet holds recognition from over centuries. Earlier, only a few centers in India

were involved in carpet weaving but slowly, due to several historical reasons and

availability of resources various clusters have risen in northern part of India for the

same purpose. Each center has its own competitive advantage. These centers

employ nearly millions of people all across the country.

Major belts of carpets include Bhadohi, Mirzapur and Agra belt in Uttar Pradesh,

Jaipur , Bikaner in Rajasthan, Panipat belt in Haryana and Kashmir belt. Carpets

are broadly classified into two major categories, traditional and modern.

Otherwise, Indian manufacturers make carpets in various types, these are;

Chain stich Rugs

Tufted Woolen Carpets

Hand-knotted Woolen Carpets

GABBE Woolen Carpets

Pure Silk Carpets

Handmade Woolen Durries

Staple or Synthetic Carpets


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Each type has its own individuality in terms of design, look and the wool used in

its manufacturing. Variety in carpets fulfills various needs of customers. And the

distinct variety added to the carpets is inclusion of silk and cotton which are

innovatively mixing with the wool to give an attractive look to the carpets. Silk

carpets are considered to be high quality pieces and are comparatively high in

price. Indian carpets are following the old popular patterns such as floral,

rhomboids, animal patterns and arabesques in its designs.

These traditional styles are preferred even today. However, Indian carpet industry

seems to be highly influenced by western patterns and designs which are giving a

competitive edge to Indian traditional carpets, like Chinese patterns and Persian

designs.

Now, in India, the industry is glowing with its utmost glory from the states of

Rajasthan, Kashmir, Punjab, Uttar Pradesh, Andhra Pradesh, and Himachal

Pradesh.

Today, carpet exports have been showing a steep rise. According to an article by

Indian Brand Equity Foundation, India accounts for 61 per cent of the global loom

age, 12 per cent of the world's production of textile fibers & yarn and 25 per cent

share in the total world trade of cotton yarn. Exports of carpets have increased

from US$ 654.32 million in 2004-05 to US$ 930.69 million in 2006-07, showing a

growth rate of 42.23 per cent. During April-October 2007, carpet exports totaled as

US$ 404.74 million. Hence, makes India the world leader in carpet exports with

36 per cent of the global market share.

Indian carpets are famous worldwide for its magnificent designs and heart-winning

workmanship. Hand-knotted woolen carpets, tufted woolen carpets, chain stitch

rugs, pure silk carpets, staple/synthetic carpets, handmade woolen durries are some

of the floor covering types for which there is a huge market demand in the

European and American market.

The Indian carpet industry has considerable potential for growth. However, lesserinnovation techniques, outdated technology, labor law issues and lack of


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infrastructural facilities in some of the rural areas are major barriers that make this

industry less competent as compared to other carpet supplying countries.

With these factors, the Indian government has established Carpet Export

Promotion Council of India (CEPC) to promote the exports of hand knotted carpets

and other floor coverings. It provides the necessary support to the Indian exporters,

identifies the markets, provides financial and marketing assistance, sponsors

participation in fairs and exhibitions and also conducts publicity abroad.

1.1)CARPET MANUFACTURERS IN INDIA

The art of hand-knotted carpets probably originated in the Southern Central Asia

during 3rd and 2nd millennium BCE. Turkmenistan and Persia (Iran) were the

countries which served as a cradle of the art of carpet making.

The art of carpet making, in India was introduced with the beginning of the

Mughal Dynasty in the early sixteenth century. The last successor of Babar

extended his rule from Kabul to India to establish the Mughal Empire. Under theirpatronage, Indian craftsmen adopted Persian techniques and designs and gradually

came with their own creativity. Carpets, which were woven in Punjab at that time

(often-called Lahore carpets today), made use of motifs and decorative styles

found in the Mughal architecture.

During Mughal period, the carpets made on the Indian subcontinent became so

famous that demand for them spread abroad. These carpets had distinctive designs.

Carpets made for the Mughal emperors, including Jahangir and Shah Jahan, were

of the finest quality. Under Shah Jahan's reign, Mughal carpet weaving took on a

new aesthetic level and transformed as unique classic art pieces.

That tradition of carpet weaving was carried from the Mughals to other dynasties

and further taken down to generations and spread across various states. Every state


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or region now has a unique mix of its own specialty and ethnic sense of carpet

designing.

And also, the quality and categories of carpets depend on the availability of raw

materials and skill set of craftsmen of different regions.

The Indian subcontinent has always welcomed the new cultures and the person

which has made the Indian culture richly diversified with art forms accumulated

over the centuries. And this cultural impact is reflected on the carpet

manufacturing art.

List of distinguished manufacturers of India below:

Domotex International, New Delhi

Jaipur Rugs Company Private Ltd, Jaipur

Vimla International, Jaipur

KKOverseas, Delhi

Deepiga Tax, Tamil Nadu D-Raj International, New Delhi

United Overseas, Panipat

Vinaayak Fab, Tamil Nadu

Oasis Agencies, Kolkatta

Vaibhav International, Jaipur

Anjani Carpets, Bhadohi

Bansal Carpets, Agra

Oriental Carpet Center, New Delhi

Kashyap Carpets, Kashmir

PKJ Exports, Mumbai

Craft India International, Kanpu

Versatile Trade, Delhi
http://www.jaipurrugsco.com/http://www.jaipurrugsco.com/


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Monarch Exports International, Gurgaon

Buoyant Export, Agra

1.2) CARPET MANUFCTURING PROCESS

Hand-made carpets are technically very different from machine-made carpets. As it

is quite relevant from their names, hand-made carpets are woven by hands while

machine-made carpets undergo treatments by various machines.

1) Process of Handmade carpets

2) Process of machine made carpets

Hand-made V/s Machine-made carpets

Carpet is a textile floor covering that is fixed to the floor surface and extends wall

to wall. Such a textile floor covering is manufactured in two ways: hand-made or

machine-made.

One of the most prominent differences between hand-made and machine-made

carpets is that the former holds a valuable impression. The other main difference

between these two types of rugs is the actual manner of construction. Machine-

made rugs consist of plastic derived fibers being glued onto a strong plastic base

which makes them initially very durable, but over the time the adhesive degrades

and the fibers detach easily from the base

It is well said that for rooms with modern designs or active areas with high traffic

or children, machine-made rugs with contemporary designs are excellent. While on

the other hand, there is a common misconception that hand-made oriental rugs are

delicate and not durable. Their ornate designs and soft feel often deceive

many.More clarity on the differences can be explained in terms of:

Knots used

Sides and Ends sewn

Back of the carpets

Materials used

Touch


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Knots

Machine-made rugs and carpets are not woven by hand but are loomed by a

computer generated system or apparatus. There are no knots in machine-made

rugs. Whereas in a hand-made rug, each knot is hand knotted and tied. In machine-

made carpets, threads are glued or looped onto a hot latex (plastic) backing which

cools and hardens. They show a complete and rigid uniformity in manufacture

which transforms into a static design. Machine made rugs generally lacks

spontaneity.

SIDES AND ENDS

In a hand-made or hand-knotted rug, the fringe is part of the rug. The fringe is

not sewn on as an extension, as is the case in machine-made rugs. Machine-made

rugs always have serged sides or machine stitching on both sides of the rug, as

opposed to a hand-knotted which will be irregular.

Back

In power loomed or machine-made rugs the stitching on the back is veryconsistent. They have extremely regular knots and even structure remains identical

in all parts of the carpet. On the other hand, in hand-knotted rugs the stitching

varies slightly due to different tensions on the wool as people hand-tie the knots.

Most hand-made rugs and carpets are covered with a cotton or canvas.

Materials

Acrylics and other chemically processed materials are usually used to make

machine-made carpets. Hand-knotted rugs and carpets use pure organic wools.

Touch

you can also differentiate a machine-made and hand-made rug simply by touching.

If you place one finger on the front of a machine-made rug and your thumb on the

back and pinch tightly, the rug will compress greatly and you will feel a sensation

going right through one side to other side.

1.3) SWOT Analysis of Carpet Industry
http://www.carpetandrugpedia.com/Carpet-Knots.htmhttp://www.carpetandrugpedia.com/Carpet-Knots.htmhttp://www.carpetandrugpedia.com/Carpet-Knots.htm


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Indian Carpet industry is a unique kind of industry. Its highly unorganized with

lack of proper channels. Still, it has managed to show impressive performance in

the past. What is behind this industry which drives the exports? One cannot forget

that it had significant share in Indian exports till early 1990s. SWOT analysis will

bring forth the value drivers and stumbling blocks in this industry.

STRENGTHS:-

Artistic skills:Over the period, major carpet centers have built huge network of

artistic weavers. The industry currently is employing millions of people directly

and indirectly. They are highly skilled in these areas.

Costs: India has an advantage in terms of costs. The labor costs in India are

comparatively low. Also, total cost of producing a carpet is low compared tocountries like Turkey, Iran without compromising on quality fronts heavily.

Innovations:Innovations is one of the major criteria for selling carpets. As carpets

are considered as luxury items and consumer trends re changing continuously,

innovation is a key for the success. The countries like China which produce low

cost carpets lack in innovations.

Flexibility:Indian carpet industry can manufacture all kinds of carpets. Other

countries have specialized in particular carpets. Also, the carpets of any size can be

manufactured in hand knotted categories. This is not possible in machine made

carpets. There are several kinds of manufacturers which can take small orders or

big orders. Hence, Indian industry can offer wide options to a customer for carpet

purchases.


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WEAKNESSES:-

Unorganized:Indian carpet industry is highly unorganized. Therefore, a lot of

activities are duplicated. Hence, it increases the cost of production. Also, it

increases the time of delivery of carpets.

Marketing Channels:The carpet manufacturers lack the proper marketing

channels. They find it very difficult to access the customers is increase the market.

Therefore, they are heavily dependent upon the buying agents.

Infrastructure:The infrastructure is very poor leading to higher time forproduction and costs. Also, buyers find it difficult to visit places like Bhadohi for

looking designs. Most of the manufacturers do not have showrooms in the cities to

showcase their creations. There is only one institute which provides courses related

to carpet industry.

Professional Approach:Majority of players lack professional approach for doing

the business. They do not respect delivery time and quality issues. Therefore,

buyers like to deal only through buying agents to control them.

Internal Competition:Many players have entered the industry increasing the

competition. There is a tremendous competition among players on price front and

are willing to offer very low prices even though some one has already taken order.

Intellectual Property Rights:Many players in the industry copy designs from

each others. There is a lack of respect for intellectual property rights

1.4) OPORTUNITIES:-


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Globally, Home furnishing market is moving towards Carpet industry. Hence, this

movement offers a new market for Hand tufted Carpets which are comparatively

cheaper to hand-knotted carpets.

Traditionally, the carpets were purchased by old people. The evolution of modern

design has attracted youth market as well. This segment can be further expanded.

After dealing with China for some time, many players think that India provide

better option and flexibility. This kind feeling can further be tapped

Carpets are generally considered to be expensive. With use of modern technology,

prices can further be reduced. Also, cutting middlemen will directly benefit the

consumers thereby increasing the demand.

Organized operations can enhance the image of Indian Carpet industry.

The companies like IKEA, Wal-Mart, etc can offer new and larger market to the

manufacturers provided this market is properly tapped.

THREATS:-

o If not handled properly, current rebound in the industry may not be

sustainable

o Unhealthy competition in the industry kills each other.

o Indian Carpet industry has not completely got rid off of issues like Child

labor. Hence, risk of possible backlash on the industry is going to be there

for considerable time in the future although some action is being taken on

this front.


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Present & Future Growth Drivers of the Industry

LowEnd Carpets

Low end carpets such as hand-tufted carpets are currently driving the growth of

industry. These carpets have expanded the market as these carpets are cheaper and

affordablefor many consumer segments. Due to which these segments aregoing to

drive future growth for a considerable time.

Modern Designs

As in the case of low end carpets, modern designs are also expanding the market.

Modern designs are attracting young consumers. Also, there are a great number of

consumers who prefer modern designs compared to traditional designs. These

designs are prominent in countries like Germany, Scandinavia, etc.

New Markets

Traditionally, carpets industry was dominated by buyers from USA & Germany.

However, new markets are emerging for carpets and they are growing fast. These

are basically in developing countries or lesser developed countries like Spain, etc.

Growth in income level is the major driver for these markets.

Big Retailers

Big retailers like Wal-Mart, Ikea can also drive the growth inthe carpet industry

and these players have huge networkwith a large customer base. Low-end carpets

can be amajor product that can be targeted by these players or big retailers.

Cost Management

In Todays competitive market, price is considered as animportant factor.Therefore, better price can be offeredthrough better costs management. Effective


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costsmanagement will prove to be a competitive advantage toany player. This

trend is common in every industry.Carpet industry is no exception to this. Better

cost managementwill decrease the price which can lead to increase involume sales.

TOPIC - 2


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INTRODUCTION TO

THE COMPANY

2.0)INTRODUCTION TO HANDFABS

HANDFAB is a leading manufacturer and exporter of hand tufted and hand woven

carpets for the last 15 years based inPanipat, well known for home furnishing

goods from India. In the fifteen years of operations they have continuously moved

ahead with desire to learn and excel in field of carpet production.

PRESIDENT:MR. Abhinavgarg


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Product range includes:

Hand Tufted Woolen Carpets

Hand Woven Woolen Carpets

Sea Grass Carpets

Jute Carpets

Persian Tufted carpets

Bath Mats

Rugs

Durries

2.1) COMPANY PROFILE

Company has an extremely efficient production infrastructure equipped with all the

facilities under one roof which is capable in performing in the most competitive

environments.

Apart from quality ,their focus on Prompt and on-schedule deliveries has led to

rapid growth and progress which in turn further enabled them to develop a strong

customer loyalty in Indian and global markets.


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Company Profile

Company Name: HANDFAB

Business Type: Manufacturer, Trading Company, Distributor/Wholesaler

Product/Service Carpet, Bathmat, Shaggy, Rugs, Area Rugs

Product/Service

(We Buy):

Tufting Machinery, Latexing Plant, Machine Made Carpet

Number of Employees: 101 - 500 People

Main markets: South America and Western Europe

2.2) Commitments:

Competitive market price.

Quality products.

Timely deliveries.

Use of safe, eco friendly dyes for healthy environment.

No Child Labor at all Clean and healthy working environment at working place.

Progressive company policy for workers.

2.3) Products

Rugs: Rugs and carpets usually they both have no difference except in size andusage. Rugs usually have multiple uses. Rugs may be used as central flooring


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furnishing, foot rug, wall dcor, sofa throws and other decorative utilities. They

usually have an artistic or stylish touch in terms of patterns, shape or

color.Whether traditional hand knotted hand tufted or the modern machine

made variety, a rug will set off any interior with their finer finish and intricate

patterns.

Carpets: Carpets are usually larger in size than rugs and these are mainly used as

floor covering. Carpets may be used as wall to wall floorings or wide centerpieces

.Carpets can be hand-knotted, tufted, bonded or machine made.

2.4) Quality

At HANDFAB, Quality is corporate mantra at every level of production an

administration that ensures maximum customer satisfaction The in-house quality chec

done under professional personnel make sure that the carpets meet all internation

standards.


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Fig. 1.1 Quality at the company

They have a team of highly talented designers who are continuously coming out wi

exquisite designs, magnificent cuts and fabulous colors to appeal the clients all over t

globe. They are engrossed in bringing forth a collection of products which is

combination of modernity and tradition.s real strength lies in the weavers working on t

state-of-the-art looms. These master craftsmen have woven pieces that have enabl

them deliver quality products to the clients for one and half decades now. Th

understand that each rug needs specific attention and it is because of this emphasis o


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quality that they have successfully achieved customer appreciation resulting in long ter

relations

2.5)Infrastructure

HANDFAB has the infrastructural set up to undertake complete carpet production proce

within its factory premises at Panipat, India. They possess state-of-the-art production u

equipped with state-of-the-art looms and hi-tech machines that enable them to carry o

production indigenously. Their looms for gun tufting, handlooms, finishing unit, washi

unit, latex section and drying chamber enables them to deliver products with unmatch

quality and finish.

Fig. 1.2 Companys infrastructure

2.6)PRODUCTION CAPACITY

Hand tufted 10000sq meter per month


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CHAPTER 3

INTRODUCTION TO

COMPENSATION SYSTEM

3.0) INTRODUCTION-Compensation or Reward system plays vital role in a business organization. Since,

among four Ms, i.e. Men, Material, Machine and Money, Men has been most

important factor, it is impossible to imagine a business process without Men. Land,

Labor, Capital and entrepreneur are four major factors of production. Every factor

contributes to the process of production/business and expects return from the


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business process. The labor expects wages from the process. Wage is a monetary

payment, which is made by the employer to his employee for the work done or

services rendered. It is a monetary compensation for the services rendered. Wages

are usually paid in cash at the end of one day; one month etc. Money wage is the

monetary compensation paid by the employer to his employee for the services

rendered. Such compensation is also called wage or salary or reward given by an

organizationto a worker.

Labor plays significant role in bringing about the process of production/business in

motion. Labor therefore expects to have fair share in the business/production

process. Compensation is what an employee receives in return for his or her

contribution to the organization. Compensation occupies an important place in the

life of an employee. His or her standard of living, status in the society, motivation,

loyalty, and productivity depend upon the remuneration he or she receives. For the

employer too, employee compensation is significant because of its contribution to

the cost of production. Compensation is a key factor in attracting and keeping the

best employees and ensuring competitive edge in this increasingly competitive

world.Generally, compensation payable to an employee includes the following

three components:

Basic compensation for the job (wage/salary)

Incentive compensation for the employee on job

Supplementary compensation paid to employees (fringe benefits and

employee services)

3.1) COMPONENTS OF EMPLOYEE COMPENSATION


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The compensation of an employee includes wage/salary, incentives, fringe

benefits, perquisites and finally non-monetary benefits. The following chart

presents the compensation payable to the workers or the components which

contributes to the component.

Fig. 1.3 Components of compensation

1. Wages and salary:Wages meanshourly rates of pay, and salary implies monthly rate of pay,

irrespective of the number of hours put in by the employee. Both are subject

to the annual increments. They differ from employee to employee, and depend

upon various factors such as- the nature of job, seniority, and merit.

2. Incentives:Incentives are those which are paid in addition to wages and

salaries and are also called payments by results. Incentives depend upon

productivity, sales, profit, or cost reduction efforts.These are:

(a) Individual incentive schemes (b) Group incentive programmes.

Remuneration Packet of an

employee

Wage/ Salary Fringebenefits

Perquisites

Total

Compensation

Payable

Incentives

Non-

monetary

benefits


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Individual incentives are applicable to particular employee performance. But,

where a given task demands group efforts for completion, incentives are paid

to the group as a whole. The amount is then divided among group members on

an equitable basis.

3. Fringe benefits:These are monetary benefits, which are provided to employees which include

the benefit of: (a) Provident fund (b) Gratuity (c) Medical care (d)

Hospitalization payment (e) Accident relief (f) Health and Group insurance

(g) Subsidized canteen facilities (h) Recreational facilities and (i) Provision of

uniforms to employees (j) travelling allowance etc.

4. Perquisites:There are special types of benefits offered to managers/executives. The

purpose behind this is to retain competent executives. Perquisites include the

following: (a) Company car for travelling, (b) Club membership, (c) Paid

holidays, (d) Furnished house or accommodation, (e) Stock option schemes,

etc.

5. Non-monetary benefits:These benefits provide psychological satisfaction to employees even when

financial benefit is not available. These are:-

(a)Recognition of merit through certificate, etc. (b) Offering challenging job

responsibilities, (c) Promoting growth prospects, (d) Comfortable working

conditions, (e) Competent supervision, and (f) Job sharing.

Through these benefits employees are motivated a lot, which ultimately

proves to be beneficial for the organization.

3.2) IMPORTANCE OF COMPENSATION

1. to worker:


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is for the protection of workers. And Government is the biggest employer in India

and the wage rates of government servant and employees of public sector

organizations are decided by government itself. And Revision of pay scale of

government employees made for adjusting their wages as per the cost of living.

For this purpose, Pay Commission is appointed and pay scale is adjusted as per

the recommendations made.

3.3) CONCEPT OF FAIR WAGES:

Fair wages is the wage which is above the minimum wage but below the living

wage. The lower limit of the fair wage is the minimum wage and the upper limit is

set by the ability of the industry to pay. Between these two limits, fair wages

should depend on the factors like:-

1. Prevailing rates of wages in the same region or neighboring areas

2. Employers ability to pay

3. Level of national income and its distribution

4. Productivity of labor

5. Status enjoyed by the industry in the economy

6. Prevailing wages rates in the same occupation

Hence it can be said that fair wages are determined on industry cum region basis.

When fair wages are paid employees enjoy higher standard of living. It is accepted

fact that wages must be fair and reasonable. Wages are fair when the employee is

able to meet its essential needs and enjoy reasonable standard of living. Equal

pay for equal work serves as base of fair wage


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3.4) ADVANTAGES OF FAIR WAGES

Therefore, there are certain advantages of providing fair wages to the workers. The

fair compensation system will help in the following manner:

1. If an ideal compensation system is designed, it will have positive impact on

the efficiency and results produced by workmen.

2. Such system will encourage the normal worker to perform better and achieve

the standards fixed.

3. This system will encourage the process of job evaluation. It will also help in

setting up an ideal job evaluation, which will have transparency, and the

standards fixing would be more realistic and achievable.

4. This system would be well defined and uniform, which will be applied to all

the levels of the organization as a general system.

5. This system would be simple and flexible so that every worker/recipient

would be able to compute his own compensation receivable.

6. Such a system would be easy to implement, so that it would not penalize the

workers for the reasons beyond their control and would not result in

exploitation of workers.

7. It will help in raising the morale, efficiency and cooperation among the

workers. It, being just and fair would provide satisfaction to all workers.

8. Such system would help management in complying with the various labor

acts.


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9. Such system would also bring about settlement of disputes between the

workmen union and management.

10.The system would embody itself the principle of equal work equal wages.

Encouragement for those who perform better and opportunities for those

who wish to excel.

3.5) Factors Influencing Wage and Salary Structure

The organizations ability to pay:

Compensation paid to the workers depends upon organizations ability to pay,

to a large extent. Companies which have good sales and therefore high profitstend to pay higher wages than those which are running at a loss or earning low

profits because of the high cost of production or low sales.

Supply and demand oflabor:

If the demand and certain skills of labor are high and the supply is low the

result is rise in the price to be paid for these skills and the other alternative is to

pay higher wages if the labor supply is scarce and lower wages when it isexcessive.

The cost of living:

When the cost of living increases, workers and trade unions demand enhanced

wages. But, when living costs are stable or decline, the management does not

resort with this argument as a reason for wage reduction.

The living wage:

Employers feel that the level of living prescribed in workers budget is opened to

argument as it is based on subjective opinion.

Job requirements:

Jobs are graded according to the given skill, responsibility and job conditions

required. Accordingly, wage structure is decided.


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Trade unions bargaining power:

Trade unions do affect the rate of wages. Generally the stronger and more

powerful trade union, higher the wages.

Prevailing market rate:

This is also known as comparable wages or going wage rate. Reason behind

this is competition. It means that competitors adhere to the same relative wage

level.

Skill levels available in the market:

With the rapid growth of industries and business trade there is shortage of

skilled resources. The technological development and automation has been

affecting the skilled levels at a faster rate.

Psychological and social factors:

These factors determine in a significant manner that how hard a person will workfor the compensation received or what pressures he will exert toget his

compensation increased.

3.6)SYSTEMSOFWAGEPAYMENT

A) TIMERATESYSTEM

B) PIECERATESYSTEM

Time rate system:

It is the oldest and simplest method of wage payment used mainly in the industrial

as well as government departments. Wages are paid to the workers as per the time

spent by the workers in the factory. The production done by them is not taken into

consideration. Time rate system is also known as day wage system. In the time rate


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system, efficiency, sincerity, ability of the worker is not given attention and all the

workers are paid at one and the same rate as per the period spent in the factory.

3.7)ADVANTAGESOFTIMERATESYSTEM:

1) Easy and simple: Time rate is easy to understand and simple to follow and

calculate. Each worker knows how much wage payment he is entitled to at the end

of the month.

2) Guarantee of minimum wage:It gives the guarantee of certain minimum wage

payment to every worker irrespective of their working capacity which gives a

sense of security to all workers as regards wage payment.

3) Maintains quality of production: Quality of production is maintained as the

workers are not in a hurry to complete the work. So, they do not spoil the quality

because of the temptation to earn more.

4) Avoids quarrels among workers: Time rate avoids quarrels among the workers

as uniform wages are paid to all.

5) Support from trade unions: Workers and trade unions support time rate system

as all workers are placed in one category as regards wage payment which ensures

unity among workers. Trade unions normally prefer this system of wage payment.

6) Convenient in modern factory system: Time rate payment is convenient in

modern factory system where production process is continuous and integrated. It is

not possible to measure the work completed by one individual worker and hence

time rate system is convenient.

3.8)DISADVANTAGESOFTIMERATESYSTEM:


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1) Not scientific: Time rate is not scientific system of wage payment as there is no

direct linking between wages and production/productivity.

2) Absence of positive encouragement: In the time rate system, there is no positive

encouragement to workers to improve their efficiency/ performance as the wage

rate is uniform to all workers; efficient and inefficient.

3) No initiative to workers: Time rate fails to encourage workers to take more

interest and initiative in their work. In fact, it encourages them to follow go slow

policy. As wage payment is not linked with the production given.

4) Strict supervision: In the time rate strict supervision on the workers is essential aspayment is for period and not production. This raises the expenditure on

supervision.

5) No distinction between workers: In the time rate system of wage payment, no

distinction is made between efficient and lazy worker, both are paid at one rate

which is unfair. This system does not prove to be beneficial to sincere and efficient

workers. They are discouraged because they are paid less than what they deserve

due to which, they may even leave the job.

6) No effect on productivity/ efficiency: Time rate fails to raise productivity and

efficiency of labor force as it is not an incentive system of wage payment.

7) Labor cost may increase: In the time rate system, there is a possibility of increase

in the labor cost without corresponding increase in the production. As workers may

work with slow speed, give less production but collect the wage as per time or day

fixed.

Piece rate system:

This is yet another or an important system of wage payment. It is opposite to the

time rate. It is treated as an incentive wage system as it encourages workers to

produce more and also to earn more. In the piece rate system, wages are paid as per


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the output given by the worker and not as per the time spent by the worker in the

factory. Payment is made according to results in terms of output given. Wage rate

is fixed per piece of work or for certain quantity of production. The production

given by a worker at the end of the day is counted and payment is made

accordingly.

3.9)MERITSOFPIECERATESYSTEM:

1) Linking of wages with production: Here wages are linked with production or

productivity. It raises the productivity of labor.

2) Distinction is made between efficient and inefficient workers: Distinction ismade between efficient and inefficient worker and full justice is done to efficient

worker as he gets payment in proportion to the production given.

3) Encourages workers to take initiative in the work: Piece rate system

encourages workers to take more interest and initiative in the work as every worker

gets full reward of his efforts.

4) Fair to employer and employees: This system is fair to employers as well as

employees. The employees get income in proportion to production given by them

and the employer gets production in proportion to the wage paid.

5) Incentive system: This system serves as the incentive system. Workers work

efficiently and take interest in the work due to corresponding benefit/ reward in the

form of higher wage payment.

6)Limited supervision: In this system strict supervision on the workers is not

necessary as workers work sincerely because their wage payment is directly linked

with their sincerity and ability.

7)Freedom of work to workers: Workers get more freedom of work and there is

effective control on the cost of production in the piece rate system.

8)Brings cordial relations: Piece rate brings cordial labor- management relations

and industrial peace.


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3.10)DEMERITSOFPIECERATESYSTEM

1)No guarantee of minimum wage payment:According to thissystem, certainty for

minimum wage payment to a worker. This may prove to be dangerous particularly

to a newly recruited worker.

2) Complicated system: Piece rate system is complicated and difficult as it is

difficult to understand by ordinary workers. Management has to keep elaborate

records of production given by each worker.

4) Disturbs unity of workers: Piece rate affects the unity among workers as wagepayment will not be uniform to all workers. This will lead to quarrel among

workers.

5) Not fair to trainees: Piece rate system does not seems to be fair to trainees, as

their capacity to produce is less and naturally they will get less wages.

6) Quality of production is adversely affected: It affects the quality of production

as workers may work with speed and this may bring down the quality of

production.

3.11) INCENTIVE SYSTEMS OF WAGE PAYMENT

The wage plan should be highly incentive means it should encourage workers to

take more interest in the work, produce more and also earn more. The wage plan

which serves all these purposes related to work is called incentive wage plan. Such

an incentive plan is beneficial to both - employers and employees.

Incentives include monetary as well as non-monetary benefits. Incentives lead to

motivation among workers. In every incentive plan, wages/salaries are linked with

the given output. Incentives are not fixed as wages and salaries. They vary from


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individual to individual.ILO defines incentives as "payment by results". Incentives

can also be stated as "incentive systems of payment.

TYPES OF INCENTIVE PLANS:

There are two types of incentive plans as given below:-

(a) Individual incentive plans

(b) Group incentive plans

Individual incentive plan is provided for individual employees. Employee has to

work hard i.e. efficiently, produce more and share the monetary benefits forhimself. The incentive benefit is directly linked with his ability, efficiency and

capacity.

In the group incentive plan, the incentive is not for individual employee but for the

group of employees working in one department or area. The group will work

collectively, give more production and share the incentive benefit. Initially the

benefit will be given to the group and further, it will be divided among themembers of the group.

3.12) FEATURES OR REQUISITES OF A GOOD INCENTIVE PLAN:

Simplicity:

A good incentive plan is one which is easy to understand and simple to apply. An

average worker must be able to understand the incentive offered and what he is

expected to do. The monetary as well as non-monetary benefits which are to be

offered must be made clear to all workers.

Encourage initiative:

A good incentive plan should create initiative among workers to work more and to

earn more and more. It must offer more profit/production to the firm or company.


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Definiteness and flexibility:

A good incentive plan should be definite which means frequent changes should not

be made as regard rates, etc. as such type of changes create confusion and doubts

in the minds of workers.

In addition to this, an ideal incentive plan should be flexible. It should consider

technological and other changes taking place from time-to-time. There should be

suitable provision for making such adjustment.

Wide coverage and equitable:

A good incentive plan should not be for employees in some departments only. It

should have a wide coverage and almost all employees should be covered under

such plan. Such wide coverage makes the plan popular among all categories of

workers.

An incentive plan must be equitable which means it should provide equal

opportunity to all employees to show efficiency and earn more. And hence avoids

dissatisfaction among employees and makes the plan just and fair to all employees.

Guarantee of minimum wage payment:

An incentive wage plan should include certain minimum wage amount to every

worker per month. This should be irrespective of the production, that employee

gives. Such provision of guarantee payments creates a sense of security and

confidence among workers at all levels.

Scientific fixation of standard workload:

Under the incentive plan, as extra payment is given for the extra work i.e. work

which is over and above certain quality. Such standard work-load must be clear,

specific and fixed with scientific studies so that majority of employees will be able


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to give extra production for extra payment.

Justice to employer and employees:

A good incentive plan should do justice to both parties- employer and the

employee. The employer must get additional production along with extra profit and

the workers must get extra payment for extra production.

3.13) FRINGE BENEFITS:

Fringe benefits may be defined as wide range of benefits and services that

employees receive by the employer as an integral part of their total compensation

package. They are based on critical job factors and work performance. Fringebenefits include indirect compensation as they are usually extended as a condition

of employment and not directly related to performance of concerned employee.

Fringe benefits are just supplements to regular wages received by the workers at a

cost of employers. They include benefits such as paid vacation, pension, health and

insurance plans, medical allowance etc. Such benefits are measured in terms of

money and the amount of benefit is generally not predetermined.

The purpose of fringe benefits is to retain efficient and capable employee in the

organization over a long period. They boost loyalty and acts as a securitybase for

the employees.

FEATURES OF FRINGE BENEFITS:


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Different from regular wages:Fringe benefits are different from regular

wages as such benefits are those payments, which an employee enjoys in

addition to basic wages he receives. It is a supplementary payment

andprovides support and satisfaction to an employee.

Employee motivation: Fringe benefits are not given to employees for

performing certain work instead the purpose is to encourage them to take

more interest in the assigned work.

Useful but avoidable expenditure:Fringe benefits constitute a labor cost for

the employer as these are paid by the employer.

Not directly linked with efforts:Fringe benefits are not directly linked with

efforts made or the production given by an employee.

Beneficial to all employees:Fringe benefits are a labor cost but its benefits

are made available to the entire labor force and not to a small group of

employees.

OBJECTIVES OF FRINGE BENEFITS:

To supplement direct remuneration:Fringe benefits supplement the regular

pay of employee. It raises the total earnings of an employee and hence

provides better life and welfare to him.

Employers prefer fringe benefits:Employers prefer this indirect remuneration

instead of direct pay increase.

To retain competent employees:Fringe benefits create happy and satisfied

labor force. In addition, the management can attract and retain competent

personnel in the organization by offering fringe benefits.

To develop good corporate image: Fringe benefits help to develop a good

image of the corporate.


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To raise employee morale: Liberal package of Fringe benefits raises the

morale of employees.

LIMITATIONS OF FRINGE BENEFITS:

There are some limitations of Fringe Benefits. These are:

Fringe Benefits may lead to unhealthy competition among employeeswhich may create unrest situation.

The expected benefit may not be available if the monetary benefits arenot adequately attractive to all the employees.

The motivation may not be as per expectation if the implementation ofthe benefits scheme is not transparent to all.

ADVANTAGES OF FRINGE BENEFITS

There are certain advantages of Fringe benefits. These are:

Fringe benefits serves as support to remuneration paid to employees.

Fringe benefits improve efficiency and productivity of employees in the

organization.

Fringe benefits act as added attraction to the employees.

Fringe benefits reduce monotony of employees. They make employees co-

operative for whatever organizational changes required to be introduced.

Fringe benefits raisethemorale of the employees.

Fringe benefits develop good corporate image which raise market standing

of the organization.

Fringe benefits act as motivating force. They motivate employees and


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encourage them to work for the progress and prosperity of the organization.

TYPES OF FRINGE BENEFITS:

(1) Payment for time not worked by the employee in the organization:

Vacations.

Leave with pay and allowances.

(2)Contingent and deferred benefits:

Pension payment.

Group life insurance benefit.

Group health insurance.

Sick leave, maternity leave, etc.

Suggestion or service award

(3)Legally required payments:

Old age, disability payments and health insurance

Unemployment compensation facilities.

Worker's compensation.

(4) Misc. benefits:

Travel allowances.

Company car and membership of clubs, etc

Moving expenses.

Child care facilities.

Tool expenses and meal allowances, etc


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Research methodology is a way to systematically represent a research on any

problem. It tends to describe the steps taken by the researcher in studying the

research problem along with the logic behind them. . The methodology combines

economy with efficiency.

The procedure adopted for conducting the research requires a lot of concentration

as it has direct bearing on accuracy, reliability and adequacy of results obtained.

Research in common language refers to a search for knowledge. Research can also

be defined as a scientific and systematic search for pertinent information on a

specific topic. Research is an art of specific investigation. Research is an academic

and as such the term should be used in a technical sense. It is a voyage of

discovery. Research methodology is a way to systematically study and solve the

research problems.

4.1) JUSTIFICATION OF THE STUDY

The study is significant as it helps to know the perception of the employees about

the compensation system of the company. Compensation is considered as a key

factor in attracting and keeping the best employees and ensuring competitive edge

in this increasingly competitive world. It helps in motivating the employees to put

their best towards work and also fair compensation helps in achieving employee

satisfaction. The study explains the compensation system or pay structure followed

within the company. So the study becomes relevant to understand the various

components of compensation and its relevance in attracting and retaining

competent employees in todays business environment.

4.2) OBJECTIVES OF RESEARCH

MAIN OBJECTIVE


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The main motive behind this research is to study the compensation system

prevailing at HANDFABS.

Sub objectives:-

To understand the compensation structure and its segregation into various

components.

To assess the satisfaction level of employees regarding the compensation

system of the company

4.3)The basic types of research are as follows1)Descriptive vs. analytical:

Descriptive research includes surveys and fact-finding inquiries of different

kinds. The main purpose of descriptive research is description of the state of

affairs as it exists at present. In analytical research, on the other hand, the

researcher is required to use facts or information already available.

2) Applied vs. Fundamental:Applied research is done for a particular problem or finding a solution for a

particular problem. On the other hand, fundamental research is the basic

research.

3)Quantitative Research:

It is based on the measurement of quantity or amount. It is applicable that can

be expressed in terms of quantity phenomenon.

4)Conceptual Research vs. empirical research

Conceptual research is related to some abstract ideas or theory. Philosophers

and thinkers, to develop new concepts or to reinterpret existing ones generally


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use it. On the other hand empirical research depends on experience or

observation alone, often without due regard for system and theory.

4.4) Research Design

The research design used in this project is Descriptive in nature. Descriptive

research includes surveys and fact-finding enquiries of different kinds. The main

purpose of this descriptive research is description of the state of affairs as it exists

at present. The main characteristic of this method is that the researcher has no

control over the variables; he can only report what has happened and what is

happening.

WHY DESCRIPTIVE TYPE RESEARCH METHODOLOGY?

The purpose of descriptive research design is in descriptive state. The main

characteristic is that the research has no control over the variables; he can only

report what has happened or what is happening. In this project all primary data has

been taken by researcher to know about the compensation system followed in the

company for the employees. These primary data have been collected from various

employees of the company.

4.5) SAMPLE DESIGN

The sample design used in this study is PROBABILITYRANDOM SAMPLING.

UNIVERSE

In statistics, universe or population means an aggregate of items about which we

obtain information. A universe or population means the entire field under

investigation about which knowledge is sought. A population can be of two kinds

(i) Finite and (ii) Infinite.


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But in this research project, only finite population is used as the

employeesofHANDFAB.

SAMPLE SIZE

A part of population is called sample. In other words, selected units from the

population are known as sample. In fact, a sample is that part of the population

which we select for the purpose of investigation.

In this research project, the sample size of this study is 150 . This would help in

easing up of Analysis and Interpretation and is also going to be reasonable to reach

any conclusions.

4.6) METHODS OF DATA COLLECTION

To determine the appropriate data for research, mainly two kinds of data was

collected:

1) Primary Data

2) Secondary Data

Primary dataPrimary data is that data which is collected for the first time. These

data are basically observed and collected by the researcher for the first time.

Secondary dataSecondary data are those data which are primarily collected by

the other person for his own purpose and now we use these for our purpose

secondly.


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Sources of secondary data are

Internet.

Books and Journals.

Company reports.

Research work of others.

4.7) DATA USED FOR THE PROJECT

For the study conducted both kind of data have been used, primary as well as

secondary.

Primary Data-With the help of questionnaire and own observation or through

communication with the company officials.

Secondary data- With the help of journals and internet.

4.8) TOOLS USED FOR ANALYSIS

Graphical and Tabular analysis

The tools used for the analysis are as follows:-

Tables: Tables are used to represent the response of the respondents in a precise

term so that it become easy to evaluate the data collected.

Pie-charts: Pies charts have been used to express that how much percentage of the

respondents have positive attitude and how much has negative attitude toward a

particular situation.

Graphs:-Graphs are nothing more than a graphical representation of the data

collected in tabular form.

LIMITATION OF THE STUDY


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Findings are based on the views expressed by the respondents of different

occupation and age so it may suffer from biased prejudices.

The study has not been intended on a very large scale, have the possibility of

errors, which cant be ruled out.

The misunderstanding of the terms used in questionnaire by the respondents.

Lack of awareness and knowledge among the selected sample unit.

Some of the workers did not respond properly as they thought HR

Department was carrying on some performance assessment or performance

grading, on the basis of their responses.

Time limitation was another constraint. Workers were not able to entertainproperly due to their busy schedules.

DATA ANALYSIS AND INTERPRETATION

TABLE 4.1

EMPLOYEES SATISFACTION WITH CURRENT SALARY PACKAGE

OPINION NO.OF

RESPONDENTS

% OF

RESPONDENTS

YES 90 60

NO 60 40


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Figure 4.1

INTERPRETATION

The above table and chart shows that the majority of respondents i.e. 60% of the

respondents are satisfied with their current salary package. And 40% of the

respondents are not satisfied with the current salary package provided by the

company.

TABLE 4.2

SATISFACTION LEVEL FOR COMPENSATION BASED ON

QUALIFICATION AND EXPERIENCE

SCALE NO.OF

RESPONDENTS

%OF

RESPONDENTS

A 40 26.67

B 75 50

60

40

0

10

20

30

40

50

60

70

YES NO

%O

FRESPONDENTS

EMPLOYEES SATISFACTION

WITH CURRENTY SALARY

PACKAGE


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C 10 6.67

D 20 13.33

E 5 3.33

Figure 4.2

SCALE

A =MOST SATISFACTORY

B = SATISFACTORY

C = NEUTRAL

D = DISSATISFACTORY

E = MOST DISSATISFACT


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INTERPRETATION

The above table and scale shows the employees satisfaction regarding

compensation based on qualification and experience. Among them, 40 out of 150

feels most satisfactory 75 respondents are satisfactory. 10 respondents show their

neutral response towards this. 20 showed their dissatisfactory response. 5

respondents out of 150 are most dissatisfactory with the compensation based on

qualification and experience. It is interpreted that majority of the respondents aresatisfied with the current compensation, considering their qualification and

experience into account.

TABLE 4.3

BESIDES SALARY, ANY BENEFITS PROVIDE TO EMPLOYEES

OPINION NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 105 70

NO 45 30


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Figure 4.3

INTERPRETATION

It can be interpreted from the above table and pie chart that 70% of the respondents

i.e. 105 employees agree that besides salary, other benefits are provided to

employees. Whereas 30% of the respondents or 45 employees says that no other

benefits are provided. So it implies that majority of the employees are availed of

other benefits besides salary such as bonus, incentives etc

TABLE 4.4

SATISFACTION REGARDING INCENTIVES BENEFITS

70%

30%

BESIDES SALARY, ANY

BENEFITS PROVIDED TO

EMPLOYEES

YES

NO


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OPINION NO.OF

RESPONDENTS

%OF

RESPONDENTS

YES 75 50

NO 25 16.67

TO SOME

EXTENT

50 33.33

Figure 4.4

INTERPRETATION

Hence concluded that 50% of the respondents are satisfied with the incentivebenefits as provided by the company. 16.67% or 25 respondents out of 150 are not

satisfied with theincentive benefits. Where 33.33% or 50 respondents are satisfied

with the incentive benefits to some extent.

TABLE 4.5

IS TIMELY COMPENSATION PAID TO EMPLOYEE


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OPINION NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 90 60

NO 30 20

SOMETIMES 30 20

Figure 4.5

INTERPRETATION

From this pie chart it can be concluded that regular or timely payment is made in

the company to employees as 60% of the employees are in favour of this. 20% of

the respondents states that sometimes company make timely payment and

sometimes not. And only 20% of the respondents says that they do not get timely

compensation.

TABLE 4.6

60%20%

20%

IS TIMELY COMPENSATION PAID

TO EMPLOYEES

yes

no

sometimes


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IS THERE ADEQUATE INCREEMENT IN PAY FOR EXTRA WORK

OPINION NO.OF

RESPONDENTS

%of

RESPONDENTS

ALWAYS 120 80

SOMETIMES 30 20

NEVER 0 0

Figure 4.6

INTERPRETATION: From the above table and figure, it can be interpreted that

as per the feedback from the respondents of the company, 80% implies that for

every additional work, there is always an adequate increment in pay structure. And

20% of the respondents states that company sometimes pay extra for extra work

and sometimes not. But none of the employees says that there is not an adequate

increment in pay for additional work.


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TABLE 4.7

Is Organizations pay policy clear regarding salaries, pay &bonus

Opinion NO. OF

RESPONDENTS

% OF

RESPONDENTS

Yes 105 70

no 45 30

Figure 4.7

INTERPRETATION

Here it can be concluded from the above table and pie chart that there is clarity of

organizations pay policy relating to salary, pay, bonus to 70% of the respondents.

70%

30%

CLARITY OF ORGANISATIONPAY POLICY RELATED TO

SALARY, PAY , BONUS

YES

NO


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And organizations pay policy is not clear to rest of the respondents i.e.30%. It can

be interpreted that most of the employees understands the pay policy of the

company.

TABLE 4.8

Is there any biasness in the compensation package for similar jobs within the

Organization?

OPTIONS NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 45 30

NO 105 70

Figure 4.8


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INTERPRETATION

This figure shows that as per the opinion of the 70% of the respondents, there isnot any biasness in the company in the compensation package for the similar jobs.

Rest 30% of the respondents states that there is biasness in the company for

compensation .In all, it can be concluded that Company is not so partial in

providing compensationto its employees. Hence, there is similar pay for similar

work in the company or internal equity is met in the company.

TABLE 4.9

BELIEF IN PERFORMANCE BASED PAYMENT SYSTEM

OPINION NO.OF

RESPONDENTS

% OF

RESPONDENTS

YES 115 76.67

NO 35 23.33


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Figure 4.9

INTERPRETATION

From the above pie chart and table it can be stated that 76.67% of the respondents

or 115 employees are in favor of performance based payment system and 35 or

23.33% of the respondents do not believe in performance based payment system.

TABLE 4.10

76.67

23.33

BELIEF IN PERFORMANCE BASED

PAYMENT SYSTEM

Yes

No


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MOTIVATIONAL FACTORS AT WORK PLACE

FACTORS NO. OF

RESPONDEN

TS

% OF

RESPONDENTS

INCREMENTS 70 46.67

BETTER

AMENITIES

25 16.67

SCOPE

OF

ADVANCEMENT

10 6.66

BETTER

WORKING

CONDITIONS

30 20

BETTER

WORKLIFEBALAN

CE FACILITIES

15 10

Figure 4.10

0

10

2030

40

50

%o

fresp

ondents

MOTIVATIONAL FACTORS IN

WORK


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INTERPRETATION

With this bar chart, various motivational factors at workplace can be seen. Among

them, majority of the respondents as 46.67% or 70 respondents think increment in

the compensation is supposed to be the motivational factor in their work. 16.67%

or 25 employees feel better amenities as the motivational factor, whereas 6.67% of

the respondents or only 10 respondents take scope of advancement as the

motivational factor at their work place. 20% considers better working conditions as

the motivational factor.10% of the respondents consider better work life balance

facilities at work place as the motivational factor.

TABLE 4.11

AGREEMENT WITH PAY ACCORDING TO RESPONSIBILITIES

HANDLED


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SCALE NO. OF

RESPONDENTS

% OF

RESPONDENTS

STRONGLY AGREE 55 36.67

AGREE 35 23.33

NEUTRAL 30 20

DISAGREE 20 13.33

STRONGLY

DISAGREE

10 6.67

Figure 4.11

INTERPRETATION:

From this bar graph, it can be interpreted that 36.67% of the respondents or 55 out

of 150 respondents strongly agree with this system of paying according to

responsibilities handled by the employees. 23.33% or 35 out of 150 respondents

agree with paying according to responsibilities handled. Then there are 20% of the

0

5

10

15

20

25

30

35

40

STRONGLY

AGREE

AGREE NEUTRAL DISAGREE STRONGLY

DISAGREE

36.67

23.33

20

13.33

6.67%O

FRESPO

NDENTS

SCALE

AGREEMENT WITH PAY ACCORDING

TO RESPONSIBILITIES HANDLED


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respondents who have neutral response towards it. 13.33% or 20 out of 150

respondents disagree with this system of payment. And 6.67% or 10 out of 150

respondents strongly disagree with this payment system.

TABLE 4.12

WILLINGNESS TO TAKE ADDITIONAL RESPONSIBILITY WITHINCREASED COMPENSATION

OPINION NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 105 70

NO 45 30

Figure 4.12

INTERPRETATION

70

30

WILLINGNESS TO TAKE

ADDITIONAL RESPONSIBILITY

WITH ENHANCED

COMPENSATION

YES

NO


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system. Where, 30% of the respondents are dissatisfied with this system. And 10%

says that they are neither satisfied nor dissatisfied.

TABLE 4.14

IS NON MONETARY INCENTIVES NECESSARY FOR IMPROVING

PERFORMANCE

OPINION NO. OF

RESPONDENTS

% OF

RESPONDENTS

YES 75 50

NO 30 20

SOMETIMES 45 30

Figure 4.14

INTERPRETATION

50

20

30

IS NON MONETARY INCENTIVES

NECESSARY FOR PERFORMANCEIMPROVEMENT

YES

NO

SOMETIMES


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It can be interpreted that majority of the respondents i.e.50% of the respondents

feels that non monetary incentives are necessary for improving their performance

because these leads to motivation of the employees. 20% respondents stated that

non monetary incentives are not needed at all. But 30% says that for improvement

in the performance, non monetary incentives are sometimes essential.

TABLE 4.1

SATISFACTION WITH COMPENSATION SYSTEM OF COMPANY

OPINION NO. OF

RESPONDENTS

% OF

RESPONDENTS

FULLY SATISFIED 105 70

NOT SATISFIED 30 20

TO SOME EXTENT 15 10

Figure 4.15

INTERPRETATION

It can be implied that on asking regarding satisfaction with compensation system

of the company, 70% respondents showed their full satisfaction, 20% are not

0

20

40

60

80

FULLYSATISFIED

NOT SATISFIED TO SOMEEXTENT

70

2010

%

OFRESPONDENTS

EMPLOYEES SATISFACTION

WITH COMPENSATION SYSTEM

OF COMPANY


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satisfied, and remaining 10% are satisfied to some extent. It implies that most of

the employees are satisfied with the prevailing compensation system.

TABLE 4.16

EMPLOYEES FEEDBACK OR RATING FOR COMPANYS

COMPENSATION SYSTEM

SCALE NO. OF

RESPONDENTS

% OF

RESPONDENTS

EXCELLENT 45 30

VERY GOOD 60 40

GOOD 15 10

AVERAGE 15 10

NOT GOOD 15 10

Figure 4.16

0

5

10

15

20

25

30

35

40

EXCELLENT VERY GOOD GOOD AVERAGE NOT GOOD

30

40

10 10 10

%O

FRESPONDENTS

RATING FOR COMPENSATION

SYSTEM OF COMPANY


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INTERPRETATION

The above table and graph shows the feedback or the rating of the employeestowards compensation system of the company. Where 30% of the respondents

have rated companys compensation system of the company as excellent, 40% has

rated as very good. 10% of the respondents stated that it is good. 10% consider

compensation system as average. 10% respondents or 15 out of 150 respondents

think that companys compensation system is not good. This shows that there is

scope for improvement in the Compensation and Benefits Management System.

TOPIC5

FINDING & SUGGESTION


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5.0) FINDINGS

The major findings of the project are stated as:-

Majority of the respondents are satisfied with the compensation based on

qualification and experience.

Most of the respondents think that the organizations pay policy is clear,

related to the salaries, pay and bonus.

Almost all the respondent employees believed in performance based

compensation system.

More than Fifty percent of the respondents agreed that the Organization they

work for provides pay in accordance with the job responsibilities they

handle.

Most of the respondents are willing to take additional responsibility, in case

the compensation is increased.

Some of the respondents feel that there exists bias in the compensation

package of similar jobs within the organization.

More than half of the respondents gave the rating for the Compensation and

Benefits Management system of the company as GOOD. Only 10%

respondents think that companys compensation system is not good and


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5.2) CONCLUSION

Thestudy revealed the compensation system followed by HANDFAB.The resultsof the study indicate that with the changing organizational working patterns and

employee needs,there is a need to bring in changes in the compensation systems of

the company.Further the study reveals that perfect compensation system, with

properly designed features like loyalty pay and Flexible Benefit Plan along with

timely increments, andperformance incentives, leads to happy and satisfied

workforce.

The employees not only look for monetary benefits, but also look forward to

various things like wok-life balance facilities, better amenities, better scope of

advancement etc. So, there should also be non monetary incentives for employees

which motivate the employees to put their best in work. The company can think of

expansion and growth if it has the support unskillful, talented and happy

workforce. Therefore a fair compensation system is required for every business

organization.The sound compensation system is a good sign of organizations

success and prosperity.


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TOPIC06

BIBLIOGRAPHY


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BIBLIOGRAPHY

Books

Kothari C.R.Business research methodology, page no. (100-120)

RAO.V.S.P Human Resource Management EXCEL, page no.(200-

230)

Journals

AtulMitra, Nina Gupta, Jason D. Shaw, (2011) "A comparative examination

of traditional and skill-based pay plans", Journal of Managerial Psychology,

Vol. 26 Iss: 4, pp.278296

Carolyn Stringer, JeniDidham, Paul Theivananthampillai, (2011)

"Motivation, pay satisfaction, and job satisfaction of front-line employees",

Qualitative Research in Accounting & Management, Vol. 8 Iss: 2, pp.161

179

Christian Pfeifer, (2010) "Impact of wages and job levels on worker

absenteeism", International Journal of Manpower, Vol. 31 Iss: 1, pp.5972

Dale-Olsen, H. (2006). Fringe attraction, compensation policies, worker

turnover and establishment performance. Working Paper, Institute for Social

Research, Oslo.

Ins Kster, Pedro Canales, (2011) "Compensation and control sales

policies, and sales performance: the field sales manager's points of view",

Journal of Business & Industrial Marketing, Vol. 26 Iss: 4, pp.273285

Long, J. E., & Scott, F. A. (1982). The income tax and nonwage

compensation.Review of Economics and Statistics, 64(2), 211-219


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handfab a living (panipat

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