Managing Compensation

Managing Compensation

Job EvaluationDetermine the worth of one job in relation to that of another without regard to the personalities.It analyses & accesses the content of jobs, to place them in some standard rank order.It is used as a basis for a fair and logical remuneration system.

Importance

To decide salaryLevel of jobImportance of jobTo reduce loss of time due to wage negotiation & disputes.

ProcessJob AnalysisObjectiveJob DescriptionJob SpecificationJob Evaluation ProgrammeWage SurveyFixing monetary value

JOB EVALUATION METHODS Comparison Method Analysis Method

Entire Job Job FactorsJob Against Scale

Job Against Job

ClassificationPoint MethodRankingFactor Comparison

Comparison Method

Ranking Method : on the basis of its title

Classification Method : on the basis of job as a whole (degree of skill, responsibilities, physical work & other job characteristics.)

Analytical Method

Point Ranking Method : Job is broken down into its component factors and then evaluated separately rather than evaluating the job as a whole.

Factor Comparison Method : Five factor are mental requirements, skill requirements, physical requirements, responsibilities & working condition.

Compensation, Employee Payroll & Incentive Management

Concepts of Wages

Minimum Wages

Fair Wages

Living Wages

Equity Theory

Perceptions of FairnessIndividual EquityExternal EquityInternal EquityPerformanceCommitmentMotivation

Compensation Management

Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, etc.

Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services.

Types of Compensation

Direct Compensation

Indirect Compensation

Direct Compensation

Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization.

Direct Compensation

Components in Direct CompensationBasic SalaryHRA (House Rent Allowance)CA (Conveyance Allowance)LTA (Leave Travel Allowance)Medical ReimbursementBonus (Salary Bonus)SA (Special Allowance)

Components in Direct Compensation

1) HRA (House Rent Allowance): Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees

Components in Direct Compensation2) Conveyance : Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.

Components in Direct Compensation3) Leave Travel Allowance:These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families.The allowances are scaled as per the position of employee in the organization.

Components in Direct Compensation4) Medical Reimbursement :Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements

Components in Direct Compensation5) Bonus:Bonus is paid to the employees during festive seasons to motivate them and provide them the social security .The bonus amount usually amounts to one months salary of the employee.

Components in Direct Compensation6) Special Allowance :Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees for motivation and companys productivity.

Indirect CompensationIndirect compensation refers to non-monetary benefits offered and provided to employees in lieu of the services provided by them to the organization.They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes.

Indirect Compensation

Components in Indirect CompensationLeave Policy Overtime Policy Hospitalization Insurance Leave TravelRetirement Benefits Holiday Homes Flexible Timings

Components in Indirect Compensation1) Leave Policy:It is the right of employee to get adequate number of leave while working with the organization.The Leave Policy differs in every organization.The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay, etc.

Components in Indirect Compensation2) Overtime Policy :Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities,etc.

Components in Indirect Compensation3) Hospitalization :The employees should be provided allowances to get their regular check-ups, say at an interval of one year.Even their dependents should be eligible for the medi-claims that provide them emotional and social security.

Components in Indirect Compensation4) Insurance :Organizations also provide for accidental insurance and life insurance for employees. This gives them the emotional security and they feel themselves valued in the organization.

Components in Indirect Compensation5) Leave Travel :The employees are provided with leaves and travel allowances to go for holiday with their families. Some organizations arrange for a tour for the employees of the organization. This is usually done to make the employees stress free.

Components in Indirect Compensation6) Retirement Benefits :Organizations provide for pension plans and other benefits for their employees which benefits them after they retire from the organization at the prescribed age.

Components in Indirect Compensation7) Holiday Homes :Organizations provide for holiday homes and guest house for their employees at different locations.These holiday homes are usually located in hill station and other most wanted holiday spots. The organizations make sure that the employees do not face any kind of difficulties during their stay in the guest house.

Components in Indirect Compensation8) Flexible Timings :Organizations provide for flexible timings to the employees who cannot come to work during normal shifts due to their personal problems and valid reasons.

Payroll Management

Payroll Management

Payroll refers to the administration of employees' salaries, wages, bonuses, net pay, and deductions. It consist of the employee ID, employee name, date of joining, daily attendance record, basic salary, allowances, overtime pay, bonus, commissions, incentives, pay for holidays, vacations and sickness, value of meals and lodging etc. There are some deductions such as PF, taxes, loan installments or advances taken by employee.

Components of Monthly Payroll of an Employee

Payroll ManagementDeductions such as tax and loan/advances taken by the employee from organizations are deducted only where applicable. Dearness Allowance and House rent allowance is provided at a fixed rate stated by the employment law. Provident fund is deducted from the gross salary of employee on the monthly basis as per the employment law, which is provided later to the employee. Organizations also contribute the same amount to the provident fund of the employee.

Annual Payroll Management What is Annual Payroll?Annual payroll consists of leave travel allowances, incentives, annual bonuses, meal vouchers/reimbursements, and medical reimbursements.

Components of Annual Payroll

Incentive Management

Incentive Management

In todays strategic compensation systems, incentives forms an integral part of the performance based compensation packages. It is a challenge for organizations to formulate strategies to maintain the internal equity and external equity and provide the most competitive compensation packages to attract and retain the talented workforce

Incentive ManagementFor the purpose effective incentives programs are undertaken. Employees are involved in the process so as to deliver un-biased packages to all the employees. The compensation strategies should be effective. All the employees should be aware of the organizational goals and objectives.

Benefits of Incentives

Benefits of IncentivesDeserving employees should receive significant rewards .Incentives accounts for employees high productivity. Today youngsters believe in performance based pay, thus incentives will help to motivate them to produce more. In the hospitality and retail industry it is the incentive that accounts for the overall package of the employee.

Thank You

COMPENTENCY MAPPINGCompetency mapping is a way of assessing the strengths and weaknesses of a worker or organization.

It's about identifying a person'sjob skillsand strengths in areas like teamwork, leadership, and decision-making.

Work History

Strengths in two major areas :Functional Practical KnowledgeBehavioral- Personal Skills

Benefits Businesses Employees performance, increase productivity

Individuals Personal Growth

Techniques 360 degree Feedback

Assessment Centre