1. “IF YOU PICK THE RIGHT PEOPLE AND GIVE
THEM THE OPPORTUNITY TO SPREAD THEIR
WINGS - AND PUT COMPENSATION AND
REWARDS AS A CARRIER BEHIND IT - YOU
ALMOST DON’T HAVE TO MANAGE THEM.”
— JACK WELCH

2. THE SIGNIFICANCE OF TRAINING
AND DEVELOPMENT IN AN HR
FUNCTION LIKE COMPENSATION
By:
Shikha Bhatia

3. ‘Compensation’ in other terms also called as ‘Employee
Remuneration’ refers to what an employee receives in return for his
or her contribution to the organization.
Remuneration 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 remuneration is significant
because of its contribution to the cost of production.
Cash, Bonuses, Insurance,
Vacation, Holidays
Perks, Recognition

4. COMPENSATION APPROACHES
Traditional Approach
Emerging Trends
• Compensation is primarily base pay
• Variable pay used with base pay
• Bonuses are for executives only
• Annual/long-term incentives provided
to all employees
• Fixed benefits tied to long tenure
• Pay grade progression is based on
organizational promotions
• One organization-wide pay plan for
all employees
• Flexible and portable benefits
offered
• Knowledge-based broadbands
determine pay grades
• Multiple pay plans consider job
family, location, and business units

6. Objectives of compensation:
Compensation decisions are strategic decisions and play a key role in achieving
performance and sustainable competitive advantages for national as well as
international firms. Therefore the key objectives are:
 Attract employees who are qualified , experienced and interested in
international assignments.
 Facilitate the movement of expatriate’s from one subsidiary to another, from
home to subsidiary, and back from subsidiary to home.
 Provide a consistent and reasonable relationship between the pay levels of
employees at headquarters, domestic affiliates and foreign subsidiaries.
 Be cost effective by reducing unnecessary expenses.
 Should be easily understood and easy to administer.

7. TRAINING PROCESS- ADDIE MODEL
• Organization
Analysis
• Task Analysis
• Person Analysis
Assessment
Design
• Instructional
objectives
• Trainee
readiness
• Learning
Principles
• Trainer
Identification
• Content
Development
Development
Implementation
• On-the Job
• Off-the-job
• Management
Development
•
•
•
•
Reaction
Learning
Behaviour
Results
Evaluation
7

9. Salaries
Bonuses
Incentives
Insurance plans
Social Assistance Analysis
Ambulance and Dispensary

10. Common time-off-with-pay periods include

11. Vocational holidays
Executives 40 paid holidays
10 casual leaves
Sick Leaves
12 sick leaves
Insurance Benefits
Health, Hospitalization & Disability Insurance

12. Assessment
Design and development
Implementation
Evaluation

13. SIGNIFICANCE OF T & D FOR COMPENSATION AT THE
ASSESSMENT STAGE
It is very crucial to understand:
 the economic conditions of the organization in which you function
 the volume of potential employees in the organization
Training and development teach incumbents to do external and
internal
environment
analysis of the organization and
understand the changes required and desired for overall growth.

14. ASSESSMENT AT CISCO
The Compensation and Management Development Committee’s
basic responsibility is to review the performance and
compensation of the Company’s employees in achieving
corporate goals and objectives and to assure that the
Company’s managers are giving compensations in a manner
consistent with the strategy of the Company, competitive
practice, sound corporate governance principles and
shareholder interests. Toward that end, the Committee will
oversee, review and administer all compensation, equity and
employee benefit plans and programs.
HOW IS IT DONE?
Web based Oracle Incentive Compensation

15. Compensation and benefits is an emotive area, not only for
the organizations but also for the employees.
Establishing and managing a reward structure is one of
the critical cornerstones of the human resource
department. It is extremely important to design the right
reward package that supports the business goals.

16. WHO SHOULD ATTEND?
•Experienced Compensation professionals who are seeking to either raise the
business impact and credibility of their role, wish to understand how they can better
link their efforts to business and HR strategies .
• Those who are simply seeking to improve their skills and knowledge of specific
compensation techniques and practices.
• Senior HR managers who are tasked with managing teams of Compensation
professionals and would like an overview of the importance of the role and its
impact on the organization and other parts of the HR function.
• Anyone involved in designing and implementing compensation or total rewards
plans; as well as those professionals who are responsible for areas linked to
compensation e.g. performance management, employee engagement, talent
management.
• General managers or line managers who are looking to be better equipped for
making decisions about, holding discussions about and effectively leveraging
various compensation and related performance improvement tools

17. ACTIVITY

18. Assessment
Design and development
Implementation
Evaluation

19. SIGNIFICANCE OF T & D FOR COMPENSATION AT THE
DESIGN STAGE
•
Understand the role of government regulation and social security in compensation
globally:
Cisco follows the rules issued by the Securities and Exchange Commission
•
Understand the components of a compensation system:
Basic wage and bonus is given in Cisco
•
Understand how to build effective variable pay systems :
Cisco follows the ‘three E’s’: Effectiveness, Efficiency and Exposure.
**Done through Oracle by filling in job descriptions

21. MARKET WAGE LEVELS
•Which company is leading the market?
•Which company is lagging the market?
•What would the wage level line look like for a company that was
meeting/matching the market?

22. SIGNIFICANCE OF T & D FOR COMPENSATION AT THE
DEVELOPMENT STAGE
You should also develop and document strategies for
all compensation practices including merit raises, cost
of living increases, performance
reviews, bonuses, and promotions.

23. Assessment
Design and development
Implementation
Evaluation

24. SIGNIFICANCE OF T & D FOR COMPENSATION AT
THE IMPLEMENTATION STAGE
Ensuring that established guidelines which are followed will prevent :
Offering a compensation package so tailored to a person that the
organization is jeopardized by having too heavy a financial burden
Or that flexible arrangements actually hinder the critical work from being
completed.
It takes a carefully crafted balance between the organizational needs and
the individual considerations to arrive at the correct compensation
structure.

25. "We determine bonus as a mix of the following
variables – company performance, customer
satisfaction and individual performance. Since
everyone is driven by the overall company
performance, employees across geographies and
functions are bound by one shared collective
destiny."
Subash Rao,
Director – Human Resources,
Cisco Systems India

26. Assessment
Design and development
Implementation
Evaluation

27. SIGNIFICANCE OF T & D FOR COMPENSATION AT
THE EVALUATION STAGE
If you find inconsistencies or inefficiencies, you
should conduct a review to evaluate the
appropriateness of the tasks assigned to that role.
From there you determine if the job description
and associated compensation warrants changing
or not.

28. Employee satisfaction
The managers effectively communicate a candid
appraisal of performance that helps employees to
develop a realistic view of their own
performance, thus increasing the possibility of
satisfaction with the pay they are receiving.

29. OVERALL SIGNIFICANCE
This program helps the HR professionals understand the
importance of compensation and benefits in such a way
that they are able to understand the intricacies, basic
reward system, the global trends in compensation and
benefits and are able to link pay with performance for
better planning
 Strategic Role of Compensation
 Researching and Analysing Market Data
 Creating Salary Structures
 Ensuring Equity

30. ACTIVITY

31. POINTS TO KEEP IN MIND
 Reward programs require a lot of planning and preparation
 Do not reward if the goal was not achieved
 When it comes to compensation you need to be careful
 You will have your favorite employees
Train your managers to better
communicate about pay and
you can increase employee
performance by almost 40%.

32. Kind words go a long
way, but rewarding with
money, gifts and awards
goes even further !!

33. ANY QUESTIONS?