Compensation & Benefits in Banking Industry

8/8/2019 Compensation & Benefits in Banking Industry

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By, Varun S. KansadiaRoll no: 25


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Compensation is the process of providing adequateequitable and fair remuneration to the employeesboth direct pay (salary and wages) and indirect pay(benefits programs) in exchange of the work done bythem.

Direct and indirect monetary and nonmonetaryrewards given to employees on the basis of the valueof the job, their personal contributions, and theirperformance. These rewards must meet both the

organization's ability to pay and any governing legalregulations.

Employee benefits consist of a large number ofdiverse organizational reward offerings

Compensation are of two types: Direct & Indirect


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Direct compensation is the full monetary awardwhich fulfills the equity and worth concept. Its paidto the employees as their salary, fees or wages.

It includes :1. cash package( basic, hra, DA, short term and long

term incentives etc.2. Various Reimbursements (conveyence, medical

bills, children fees etc.)


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Indirect compensation includes benefits andservices provided to motivate the employees to

harness best their potentials to fulfill socio-economic needs. It includes:1. benefits and service( holiday homes, club

memberships, credit stores, free transpostation,medical assistance, legal assistance, etc)2. Related social benefits( recognition, learning

opportunities, employment security, etc.)


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FIXED PAY

Basic Dearness

Allowance HRA City Compensatory

Allowance Conveyance Bonus Gratuity Pension Super Annuity Provident Fund Esic LTA Medical Allowance

VARIABLE

AY

PerformanceLink

Incentives Bonus Joining Bonus

DirectCompensationIndirectCompensation

Benefits

Leave Policy Hospitalization

Overtime Policy

Insurance RetirementBenefits

Holiday Homes Flexible Timings


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Monthly Grand Totals

Earnings

Basic pay 30,600

HRA 2,601

City Compensatory All 540

Special compensatory allowance 850

Dearness Allowance 12,484.80

47,075

Less : Deduction

P.F. ( Employees Contribution 10% of

Basic)

3,060

Furniture recovery 48.50

Professional Tax 200

Festival advance recovery 3,700

Union/ association membership 100

3,408.50

Net Salary Payable 43,666.50


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Overdraw facility of up to Rupees 7,00,000 at 8% interest.

Housing, car and bike loans at reduced interest rates. 100% Hospitalization reimbursement for officers and 75% for

family members. Conveyance allowance: 80 ltr petrol for car owners, 55 ltr

petrol bike owners, and if the officer does not own either he

gets rupees 935. News paper bill reimbursement: rupees 500.

Cleansing material reimbursement: rupees 750 Labour charges: rupees 15 per day

Bag purchase allowance (once every 3 years): rupees 2,400

Mtnl telephone bill reimbursement: up to rupees 800


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Furniture purchase allowance ( once during the tenure of theofficers employment): rupees 1,00,000 and rupees 10,000paid every year as furniture maintenance allowance.

Can avail residential quarters if not taken any house loan,however in this the officer will not get any HRA.

Pension: 50% of the last basic .

Scholarship for children and fee reimbursment.

Transfer benefits: 7 days leave+ transportation+ rupees 15,000

if transfered outside home town. Prizes given for good suggestion if the suggestion is

implemented.

Holiday homes, vacation allowances.


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Basic ay

Salary is the amount received by the employee in lieu of thework done by him/her for a certain period say a day, a week, a

month, etc. It is the money an employee receives from his/heremployer by rendering his/her services.

Basic is 30% of CTC HouseRentAllowance

Organizations either provide accommodations to its employees

who are from different state or country or they provide houserent allowances to its employees. This is done to provide themsocial security and motivate them to work.

HRA is 20% of CTC


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CityAllowanceTo meet the expenses in order resort to thestandard of living of the metropolitan city

City Compensatory Allowance is 30% of CTC SpecialAllowance

Special allowance such as overtime, mobileallowances, meals, commissions, travelexpenses, reduced interest loans; insurance, clubmemberships, etc are provided to employees toprovide them social security and motivate themwhich improve the organizational productivity.

Special Allowance helps in balancing the CTC


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Provident und

Provident Fund is the fund which is composed of thecontributions made the employee during the time he has

worked along with an equal contribution by his employers. It iscalculated as a percentage of his salary, say, 12 % and isreturned to him on his retirement.

Bonus

Bonus is paid to the employees during festive seasons to

motivate them and provide them the social security. The bonusamount usually amounts to one months salary of theemployee.

Depending upon Grade T1, T2, T3, & T4


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LeaveTravelAllowance

These allowances are provided to retain the best talent in theorganization. The employees are given allowances to visit any

place they wish with their families. The allowances are scaled asper the position of employee in the organization.

LTA can be avail for employee once in two years & one month salaryis given as LTA provided one should take three days consecutive

holidays

ConveyanceOrganizations provide for cab facilities to their employees. Few

organizations also provide vehicles and petrol allowances to their

employees to motivate them.

Conveyance is Rs. 800pm


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MediClaim

The employees should be provided allowances to get theirregular check-ups, say at an interval of one year. Even their

dependents should be eligible for the medi-claims that providethem emotional and social security.

Max limit is Rs. 200000 LeavePolicy

It is the right of employee to get adequate number of leave

while working with the organization. The organizations providefor paid leaves such as, casual leaves, medical leaves (sickleave), and maternity leaves, statutory pay, etc.

Maximum leave period is one month


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Insurance

Organizations also provide for accidental insurance and lifeinsurance for employees. This gives them the emotional security

and they feel themselves valued in the organization. LoansAtConcessionalRate

Company also offers loan to its employees depending upon theirdesignation at concessional interest rate which is half of the

market rate


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Thank You

Compensation & Benefits in Banking Industry

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