Compensation Final Ppt

8/4/2019 Compensation Final Ppt

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COMPENSATIO

N

MANAGEMENT


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GROUP MEMBERS

DEEPAK ARORA (16)

RADHIKA SINGH (40)

RAMAN ROY (44)

SNEHA DUBEY (52)


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INTRODUCTION

Compensation Management is an integralpart of the management of theorganization.

Compensation is a systematic approachto providing monetary value toemployees in exchange for workperformed.

It is the remuneration received by anemployee in return for his/hercontribution to the organization.

It is an organized practice that involves


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The increasingcompetitiveness ofthe labour market and

turnover ofemployees hadresulted in nightmarein compensationplanning.

Human Resource is

the most vitalresource for anyorganization. It isresponsible for eachand every decision


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NATURE OF COMPENSATION

BASE PAY

VARIABLE PAY

BENEFITS


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WAGE AND SALARYADMINISTRATION

It denotes the process of managing acompanys compensationprogramme. The goals of

compensation administration are todesign a cost effective pay structurethat will attract, motivate and retain

competent employees.


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OBJECTIVESTo establish a fair and equitable remuneration

offering similar pay for similar jobs.

To attract qualified and competent personnel.

To retain the present employees by keeping wagelevels in tone with competing units.

To control labour and administrative costs in line

with the ability of the organisation to pay.

To project a good image of the company and tocomply with legal needs relating to wages and

salaries.


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ELEMENTS OF WAGE AND SALARYSYSTEM

Identifying the available salary opportunities, theircosts, estimating the worth of its members, oftheir salary opportunities and communicatingthem to employees.

Relating salary to needs and goals.

Developing quality, quantity and the time

standards related to work and goals.

Determining the effort necessary to achievestandards.


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Measuring the actual performance.

Measuring the job satisfaction of the employees.

Evaluating the unsatisfied wants and unrealised

goals aspirations of the employees.

Finding out the dissatisfaction arising fromunfulfilled needs and unattained goals.

Adjusting the salary levels accordingly with a viewto enabling the employees to reach unreachedgoals and fulfil the unfulfilled needs and

aspirations


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WAGE POLICY IN INDIA

MINIMUM WAGE

FAIR WAGE

LIVING WAGE


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WHY WAGE DIFFERENTIALS?

o Interpersonal differences- differentials in sex,skills, age, knowledge, experience.

o

Inter-occupational differentials- varyingrequirements of skill, knowledge, demand-supplysituation.

o

Inter-area differentials- cost of living, ability ofemployers to pay, demand and supply situation,and extent of unionisation.

o

Inter- firm differentials- ability of employer topay, employees bargaining power, degree of


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CHOICES IN DESIGNING ACOMEPNSATION SYSTEM

External and internal pay

Fixed vs. Variable pay Performance vs. membership

Job vs. individual pay

Below market vs. above marketcompensation

Open vs. secret pay


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COMPONENTS OFCOMPENSATIONMANAGEMENT


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Job analysis is asystematic

approach todefining the jobrole, description,requirements,

responsibilities,evaluation, etc.

It helps in findingout required levelof education, skills,knowledge,

training, etc for the


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COMPONENTS OF JOB

ANALYSIS


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PAY STRUCTURES

Pay structure refers to the processof setting up the pay for a job in anorganization.

The process deals with internal andexternal analysis to estimate thecompensation package for a jobprofile.

Internal e uit External e uit and


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INTERNAL EQUITYThe internal equity

method undertakesthe job position in theorganizationalhierarchy.

The process aims atbalancing thecompensationprovided to a jobprofile in comparisonto the compensationprovided to its seniorand junior level in the


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EXTERNAL EQUITY Organizations

formulate theircompensationstrategies by assessingthe competitors or

industry standards.

Organizations set thecompensation

packages of theiremployees aligned withthe prevailingcompensationpackages in themarket.


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INDIVIDUAL EQUITY

Individual equity exists when an

employer compensates individualswho are in similar jobs on the basisof variations in individual

performance.

PERSONAL EQUITY

Personal equity exists when anemployer pays a wage rate thatsatisfies an employee's own

perception of his or her worth.


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SALARY SURVEYS

The Salary survey is the researchdone to analyze the industrystandards to set up thecompensation strategy for the

organization. Organizations can either conduct the

survey themselves or they can

purchase the survey reports from areputed research organization.


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To gather informationregarding the industrystandards

To know more about themarket rate i.e.compensation offered bythe competitors

To design a faircompensation system

To design and implement

most competitive reward


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Types of compensationsurveys

Standard:Standard surveys are undertaken by

organizations on a regular basis. Thesesurveys are conducted annually based on theorganizational objectives.

Custom:

A few organizations need to know somespecific information. The surveys which caterthis need are known as custom surveys.The organizations either higher research

organizations to conduct theses surveys forth m r th th m lv n t th rv .


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NEED FOR COMPENSATIONMANAGEMENT

A good compensation package is important to motivatethe employees to increase the organizationalproductivity.

Unless compensation is provided no one will come andwork for the organization. Thus, compensation helps inrunning an organization effectively and accomplishing itsgoals.

Salary is just a part of the compensation system, theemployees have other psychological and self-actualization needs to fulfil. Thus, compensation servesthe purpose.

The most competitive compensation will help theorganization to attract and sustain the best talent. The


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TYPES OFCOMPENSATION

DIRECT COMPENSATION

INDIRECT COMPENSATION


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ARTICLE


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5 SIMPLE STEPS TO THETOP OF YOUR

COMPENSATION PLAN

By- Yvonne Chihak

Y t t t t th t f '


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You want to get to the top of your company'scompensation plan? Here are 5 simple steps

that will get you there.


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CANT PAY YOUREMPLOYEES WHAT

YOUD LIKE?? PRAISETHEM INSTEAD

By- Kevin Gray


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The economy may be showingsigns of life, but that doesntmean managers and employersare starting to shower their

people with cash.

Instead, theyre turning to anold-timey, feel-good techniqueto motivate their overburdenedworkers: praise.

As a motivational tool, of course,praise has been around forever,

long before the self-styledexperts began teaching us howto practice it.

All employees and their

managers are more stressedthan ever workin faster and


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CASE STUDY:

THE SUPERVISORS DILEMMA


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CASE

Case - soap factory situatedin Ghaziabad, UP

Production - low

Top management never

satisfied

Factory workers take thingseasy because they are also

farmers so they do nothave shortage of food


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Factory wage only provide

them liquid cash

Absenteeism is also a

problem

for the management

Six years ago, within the

same factory compound, a

fruit processing unit was


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Jobs in this unit are seasonal

The unit employs 22 workers All of them are given semi

skilled grade E jobs

Jobs done in the unit are

peeling fruits

extracting juice

bottling,capping,labeling,

storing and keeping the

premises clean.


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During the lean period , part of theworkforce is transferred to the soap

plant

A small portion of workers who remain

in the fruit processing plant are givenlight jobs, such as keeping thepremises clean, rolling the barrels, and

so on

The only exceptions are the two

workers who are engaged in filling and


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When these two seeothers having an easytime they becomedisgruntled and demandhigher wages or that other

do the filling and cappingjob as well. They cannot

be given higher grades

The bottle filler andcappers have done the job

for years and have


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What is the problem??

1. Absenteeism of factory workers

at the soap plant

2. At the food processing plant whentwo workers i.e. Bottle filler and

capper, see others having an easytime they become disgruntled anddemand higher wages or that other dothe filling and capping job as well

P ibl t


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Possible measures tosolve the problem

Job rotation?

Change their designation?

Acknowledge their performance?

Compensation to employees


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CONCLUSION

A fair compensation package isimportant to motivate the employeesto increase the organizational

productivity

To get the best talent a company

should look for the bestcompensation payment method


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Compensation

managementof


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SALARY AND ALLOWANCES

Salary and allowances are paid as per the terms of employment.

DA is based on the CPI number issued by the BOMBAY CHAMBER OFCOMMERCE.

It Is paid @ Rs.2.50 for every 10 points increase over index number8067.

If the BASIC + DA adds to Rs 5000/-pm or more, DA will merge with thebasic salary .

DA is not applicable on salary above Rs 500/- . DA is not applicable tograde 100 and above.

Employee drawing salary between Rs 3,501 /- and 50,000 /- pm (basic+ DA) may opt for bonus or superannuation.

The communication regarding the option should be received with in 15days from HRD from the date of joining . However , employees whose

salary is Rs. 50,001/- or more will be compulsorily enrolled under thesuperannuation scheme.


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PROVIDEND FUND

Company contributes 12% of salary to the PF account of a new employee.

In the event of the employee being a member of the provident fund.

He / She is advised to communicate his / her PF number immediately to

salary department.

Salary and allowances are subject to deductions as per incometax act. Previous employers TDS certificate along withinvestment plans must be submitted to HRD within 15 days of

joining so as to enable salary department to calculate tax liability.


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MEDICAL AID SCHEME

1) ALL EMPLOYEES.

2) PROCEDURE

The amount as per employees eligibility will be paid through the monthly

salary on pro rata basis.

For eg: if yearly salary eligibility is Rs. 15000/- then 1/12 th ie.1250/- will be paidthrough monthly salary

Employees will need submiy relevant proof (medical bills) for the current

financial year and to the tune of max. Rs 15000/- only once a year from jan

1st until february 15 every year to the concerned HR operations

representative( currently Ms sadhana kochrekar)

if the bill not received by 15th february then the appropriate tax , if any , wil

be computed & deducted from the salary during of the month of february.


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HEALTH / INSURANCE

SPECIAL MEDICAL BENEFIT SCHEME EMPLOYEES & DEPENDENTS

ELIGIBILITY

ALL employee who are not covered under ESIS will be covered under the

GROUP MEDICLAIM POLICY .

The following reimbursement towards medical expenses will be made by thecompany under the COMPANYS SPECIAL MEDICAL BENEFITS SCHEME.

-Reimbursement of expenses for dependent parent.

-Diagnostic tests for employees & dependents.


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REIMBURSEMENT OF EXPENCES FOR DEPENDENT

PARENTS

Years of service of

employee with thecompany(all level)

Total

reimbursements forhospitalisation perparent during thetenure of service ofthe employee will besubject to the upper

limit given below:

remarks

Less than 5 years seviceNil

5 to 10 years Rs 50,000 Reimbursement towardsa single claim must notexceed 30% of theupper limit

More than 10 years Rs 1,00,000


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Reimbursement of medical expences under the scheme is given with the

intention to help employees who are associated for long period of time with the

organisation. As such when an employee resign from the services of the

company, special medical benefits 9self and dependents) claimed during the

preceding 6 months from the date of resignation , will be recovered from theemployee as given below

Years of the service withthe company

To be recovered from theemployee

Less than 5 years service 100%

More than 5 years servicebut less than 10 years

service

50%

More than 10 years service NO RECOVERY


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DIAGNOSTIC TESTS FOR EMPLOYEES AND DEPENDENTS

Claim for expensive diagnostic test will be considered under special medical

benefits even when there is no hospitalisation subject to following .

i)The test should have been conducted on the recommendation of a specialist.

ii) Test will include the following:

TESTS

Sonography

Endoscopy

C.T. scan

MRI scan

Angiography

Stress

2 D Echo

Mammography

Colour Doppler

DISALLOWABLE ITEMS


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DISALLOWABLE ITEMS

Baby feeding bottles

Baby food like nestle lectogen , farex

Tooth paste

Tooth powder

Talc powder

Health drinks like bournvita , horlicks , boost etc

REIMBURSEMENT OF CONSULTATIONS & DIAGNOSIS EXPENSES


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REIMBURSEMENT OF CONSULTATIONS & DIAGNOSIS EXPENSES

Domicillary treatment of specialized nature is included in our special medical scheme.This to

obviate the heavy expenses of which employees incur in consulting specialists. The grade

wise eligibility is given in the following table.

GRADES A CLASSCITIES(Rs.)

B CLASSCITIES(Rs)

C CLASSCITIES(Rs0TIES

STAFF UPTO

GRADE 175(NON ESIS)

4,200 3,750 3,300

200/225 6,000 5,500 5,100

250/275 9,000 8,550 8,100

300/325/350 12000 11,550 11,100

375 TO 500 15000 14,550 14,100

550 & ABOVE 18000 17,550 nil

The reimbursement of consultation & diagnosis expenses wil be subject to


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The reimbursement of consultation & diagnosis expenses wil be subject to

the following:

1.The reimbursement will be available for major diseases / medical conditions

certified as requiring specialised consultation and diagnosis by the companys

medical consultant.

2.The disease or medical abnormality mentioned as above should have been

registered by the company appointed doctor or during the annual medical check up

organised by the company prior to incurring consultation and diagnosis expenses.

3.The reimbursement will be limited only toward the consultation / diagnosis

charges, subject to overall list mentioned above .the consultation / test must have

been recommended by a specialist (referred to by company doctor ).

4.Expenses toward treatment and medicine will not form part of this reimbursment

scheme.

5.The company shall not make any payment under the scheme in respect of any

expenses wheresoever incurred by the employee in connection with or incurred by

the in connection with or in respsect of such diseases which are listed in the

EXCLUTION LIST ,given below

EXCLUSION LIST FOR CONSULTATION & DIAGNOSIS


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EXCLUSION LIST FOR CONSULTATION & DIAGNOSIS

1.Expenses incurred for pre and post hospitalisation treatment.

2.Asthma ,bronchitis, cough & cold.

3.arthritis, Gout & Rheumastism .

4.Medical expenses arising from or traceable to pregnancy.

5.Routine eye check up ,cost of spectacles , contact lenses and hearing aids .

6.Dental treatment , dental surgery of any kind ,unless requiring hospitalization.

7.Expence on vitamins and tonic

8.Any chronic illness

9.Any illness existing prior to joining pidilite

LEAVE TRAVEL ALLOWANCE (LTA)


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LEAVE TRAVEL ALLOWANCE (LTA)

(1) ELIGIBILITY :- All employee who have completed one year of service.

(2) PROCEDURE :-

2.1 The employee must avail of privilege leave for a period of not less than 6

days in order to claim LTA

2.2 The employee can make his first LTA claim after completion of one year of

service.

2.3 Second LTA can be availed after completion of 6 months of availing the firstLTA .

2.4 After the first LTA has been availed, LTA amount for subsequent LTA will

be

the same as BASIC + DA of the employee as on 1st April of the financial year

in which LTA is being availed.2.5 LTA can be carried forward and claimed together with the next entitlementie. Once in two years.

2.6 LTA is payable in advance if PL for 6 days or more is sanctioned at least 15

days prior to the date of proceeding on leave provided the prescribed LTA

application form complete in all respect s is submitted and the application for

PL.


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2.7 LTA entitlement for every completed year of service . However for any

shortfall / excess claimed, the same will be paid / recovered on prorata basis

at the time of leaving service.

2.8 LTA claim should be made in the prescribed form.

2.9 LTA will be taxable as per I.T. act 1961.2.10 In case PL applied in advance as per rules has been refused, the employee

can avail LTA . However in such cases if he does not provide a suitable

declaration in the prescribed format after availing leave, before end of the

financial year , the LTA amount will be treated as an allowance and fully taxed

in the hands of the employee.


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LEAVES

LOCATION(MUMBAI)

CASUALLEAVE

SICKLEAVE

PRIVILEGE LEAVE

TOTAL

MAX. NO.OF DAYS

7 8 24 39

Only working days will be counted as leave. Intervening weekly off / paid

holidays will not be considered as leave.

The leave rules w.r.t. no. of days of leave / encashment will differ as branches


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OTHER BENEFITS

EMPLOYEE REFERRAL PROGRAMME- BRING A FRIEND SCHEME

THE SCHEME:

BRING A FRIEND SCHEME is an opportunity for employees to refer quality

applicants for vacant positions within the organisation and thereby enabling

employees to earn some extra incentives.

THE SALIENT FEATURES OF SCHEME:The scheme was in effect from 1.9.2008. Employees can recommend their

friends / relatives for any vacant position based on the position specific

requirements. The recommendation received will be classified into :

CATEGORY A CATEGORY B

The employee must know the candidate

personally / must be in close contact with

the candidate for more than two years.

The employee can be known to the

candidate through his close

friends/relatives or the candidate can

be referred to the to the employee by a

close friend.

Grade of the selected candidate Amount/ gift voucher to be given


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in category A as incentive to the employeewho has referred the hiredcandidate

Upto grade200 Rs 5,000

Grade 225 to 325 Rs 15,000

Grade 350 to 450 Rs 25000

Grade 500 & above Rs 50,000

Grade of the selected candidatein category B

Amount/ gift voucher to be givenas incentive to the employeewho has referred the hiredcandidate

Upto grade 200 Rs 2,500

Grade 250 to 325 Rs7,500

Grade 350 to 450 Rs 12,500

Grade 500 & above Rs 25000

OTHER BENEFITS


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OTHER BENEFITS.

WEDDING GIFT

On the occasion of the wedding of an employee a token gift of Rs 1001/- ispresented by the management as a symbol of affection.

On the occasion of employees childs marriage a gift of Rs 501/- shall be given to

the son/daughter.

In addition to the above , a bouquet of flower on behalf of Sri M.B. PAREKH andall of the employees of PIL will be sent on the above occasion by the concerned

department .the budget for the bouquet is 150/-.

OTHER BENEFITS


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OTHER BENEFITS.

ANNIVERSARY AWARDS

The anniversary awards provide recognition to employee on their fifth, tenth,fifteenth, twentieth and twenty fifth aniversaries with the company.

To honour employees on their completion of:

5 yrs service : An additional incremental of Rs.100/- per month.

10 yrs service : An additional incremental of Rs.100/-per month.

15yrs services: An additional increment of Rs.100/-per month and a wrist watch

worth Rs.1000/-

20yrs service :An additional increment of Rs.100/-per month and one silver coinof 100 gms

This award is in recognition of their loyalty to the company. However it will be

subject to the employee consistently displaying reasonably good level of

performance.

OTHERS BENEFITS


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OTHERS BENEFITS

UMBRELLA ALLOWANCE

Confirmed staff members as on 15th june will be given fixed allowance in lieu of an

umbrella and an increase of Rs.20/- will be allowed once in three years from the

base price. Consequently confirmed staff members will get a fixed allowance in lieu

of an umbrella as under.

Years 2000 2001 2002 2003 2004 2005 2006 2007

Rs 160 nil 180 nil 200 nil 220 nil

MONSOON WEAR OF FIELD STAFF UP TO GRADE 175


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MONSOON WEAR OF FIELD STAFF UP TO GRADE 175

During the block period of two years starting from the date of joining field staff

may purchase:

(a)Pair of gum boots / ankle shoes.

(b)Standard quality raincoat.

ELIGIBILITY for monsoon wear given below:

MONSOON WEAR RS.

RAIN WEAR( RAIN COAT /RAINSUITS/RAIN JACKETS)

300

RAIN SHOES/GUM BOOTS 200


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