2. Compensation
What is meant by Compensation
What are the constituents which goes into
Compensation
How is it determined
How is it implemented
3. What is Compensation
To compensate in any manner for the
service rendered
It might be in Cash or Kind
4. Constituents of Compensation
In cash might be :
Salary and Wage
Bonus
LTA
Incentives
Reimbursements
Performance pay/ Variable pay
5. Constituents of Compensation
In Kind or Perks
Welfare Schemes
Holiday Packages
Leave and Holidays
Fringe Benefits which goes along with the
Positions
ESOPs
6. Constituents of Compensation
Examples
Company Leased Accommodations.
Company Car
Free education for Children
Club Facilities
Recreation facility
Working from home
7. Constituents of Compensation
Contd :-
Good working Atmosphere
Equal rights
Rewards (Annual, long service, Best employee etc)
Annual get together
Position and Authority
Insurances
Training and Development (internal / external / abroad)
Career Growth
Canteen
Loans and Advances
Rehabilitations
Retirement Benefits
8. Why do we do all these ?
Business is changing
Business Scenario is changing
People expectations are changing
Stiff Competition in Business
Globalization
Globally Competitive
Acquisitions and Mergers
Talent attraction
Talent Retention
Talent Import
9. Why do we do all these ?
Earlier Paternalistic role played by Govt
organization
Changed Scenario to Perform to survive
and grow
10. Best Practices
“Best Practices” is not a designation
limited to small and exclusive Companies.
Often, the most useful ideas come from
Companies that are faced with critical
problems and are forced to find a solution.
A best practice should be able to
demonstrate a positive impact on
Company financial performance, customer
satisfaction and/or employees satisfaction.
11. Best Practices
Improve Company bottom line financial
performance
Enhances customer satisfaction
Strengthens the relationship between the
Company and its employees
12. How is it determined
Legislations by Government
Compensation surveys
Crises
Creativity
Leaders
Paying Capacity
Industry wise / region wise
Non profit organization
NGOs
Trusts
13. Wages
May be classified as :
Minimum wages
Living Wages
Fair wages
Competitive wages
Luxury wages
14. Labour Legislations
Minimum Wages Act – 1948
Minimum Wages rules – different States
Minimum Wages for different Industries
and different skills.
Minimum wages for different Zones in the
same State
Social security Acts like PF, ESI, WC Act,
MB Act, Gratuity Act. LWF Act etc,.
15. Labour Legislations
Basic
Dearness Allowance
HRA
Conveyance Allowance
City Compensatory Allowance
16. Compensation surveys
Industry wise comparisons
Region wise comparisons
Skill wise comparison
Law of Demand and Supply
Paying Capacity of the Organization
Special perks to retain talented employees
17. How is it implemented
Forced to be implemented by legislations
Timing
In some company where Unions are prevailing –
by way of negotiations and settlements – either
long term or short term
Based on paying capacity in one phase or in
phased manner
Rewards for exceptional people
Law of demand and supply
Crises