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5th module presentation

On

Compensation for management staff(Service organization and nonprofit organization)

Subject: - Management control system

Guided by: - Ms. Ripal Madhani

Mr . Nilesh Movalia

Prepared by: - Gohil Ajaysinh p. (33)

Talaviya yogesh c. (14)

Academic year: - 2011-2013

K. K. Parekh Institute of Management Studies Amreli.Piyoosh Bajoria

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Compensation for management staffIntroduction:-

Compensation Management is an integral part of themanagement of the organization. Compensation

Management contributes to the overall success of the

organization in several ways.

Compensation management helps to determine the relative

worth of a job in an organization in a systematic, consistentand accurate manner. It also helps in estimating the basic

pay for each job in accordance with the importance of the

job in the organizational hierarchy.

Definition:-

Compensation management is a strategic activity that

helps an organization improves the effectiveness of its

employee reward processes.

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CONTComponents of Compensation System

Components of a compensation system are as follows:

Basic Wage and salary plans.

Incentives

Employee benefits. Performance-based pay

Job analysis

importance of compensation management

To worker

To employer

To government

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SERVICE ORGANISATIONTATA CONSULTANCY SERVICES (TCS)

Types of CompensationDirect Compensation

Wages

Salaries

Commissions, Bonuses, Gainsharing, Profit Sharing

Indirect Compensation

Pay for Time Not Worked (vacation, sick leave, holidays,

etc.)

Insurance Coverage (medical, dental, life, etc.)

Income Security (pensions and disability)

Services(education assistance, child care, recreation,

discounts, etc.)Piyoosh Bajoria

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EVA compensation model for TCSTCS (Tata consultancy service) adopted EVA aimed at creating

economic value byconcentrating on long term continuous improvement.

This model measured operating and financial performance

of the organization.

Basis for giving compensation to employees.

To assess employees contribution, at the company.

Component of fixed and variable pay were determined

Fixed Pay- wages, pension.

Variable Pay- bonus, profit sharing and stock options.

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Eva model by TCScompenstion management

Piyoosh Bajoria

FIXED VARIABLE

STOCK OPTION

PROFIT SHARING

BONUS

PENSION

WAGE

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Types of Organizational RewardsGiven by TCS

Membership

& SeniorityTask

Performance Competency Job

Status

Organizational Rewards

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Membership & Seniority Based Rewards

Rewards depends upon the firm which he orshe joins and the time spent in it.

Attract job applicants

Reduce turnover

May not directly motivate job performance

May fail to motivate achievers to perform

better

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Job Status Based Rewards

Depends upon the Status of the Job which is

determined with the help of job evaluation.

Maintains the feeling of Equity

Fail to motivate achievers to perform better

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Competency Based Rewards

Rewards are linked to the competencies of

employees.

Also called Skill Based Reward System.

Motivates employees to acquire additional

skills

Master of All Trades Improved Service Quality

Expensive

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Performance Based Rewards

Linked to performance rather than seniority or

membership.

Organizational Rewards

Profit Sharing

Stock Options Team Rewards

Gain Sharing

Special Bonuses

Individual Rewards

Piece Rate

Commission

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Pay and Performance Relationship

Employeeexpects

Pay

Performanceis

evaluated

Employee

considers equityof performance,

pay

Employee

performs

job

Employee sets new

expectations

based on previous

experiences

Feedback to employee

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Effective Incentive Plans

1.Incentive plan should be linked to employee performance.

2.It should be communicated to the employees clearly .

3.Employee suggestions and inputs should be valued and

rewarded.

4.The incentive plan should include both monetary and non-

monetary incentives for employees.

5. The incentive plan should be minimally affected byexternal factors.

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Objectives of employees benefit

programTata consultancy the benefits that company offers to its

Employee are:

1. Common benefits: Like Hospitalization insurance,

Parivar Raksha Yojna, Employee Referrals, Car lease,

Transport etc

2. Performance incentives: Like project completion

incentives, Best project award, Outstanding

performance bonus & Spot awards

3. Special benefits: Tax planning consultancy, Retrial

benefits, Special young genius award for dependent

children

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TCS

Employee satisfaction

Won best employer award by CNBC

Lowest attrition rate

Performance Improvement Plans was employed

EVA increased transparency

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ESOPs and EVA

ESOPs' was offered to only few employees

According to TCS ,objective of

Valuecreation

EVALong Termrewards

Commitment

ESOP

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