Compensation Presentation 2

8/6/2019 Compensation Presentation 2

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Defination

y Compensation is the remuneration received by anemployee in return for his/her contribution to theorganization. It is an organized practice thatinvolves balancing the work-employee relation byproviding monetary and non-monetary benefits toemployees.

y Compensation is an integral part of human

resource management which helps in motivatingthe employees and improving organizationaleffectiveness.

y Compensation systems are designed keeping inminds the strategic goals and business objectives


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TRENDS IN INDIA

y Compensation trends in India changed with

liberalization in 1991.y Government was the biggest job creator

y Guaranteed pay determined by agreement betweenemployee unions and Government


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Types of compensationy There are six basic tools of compensation or

remuneration.

1. salary2. bonuses, which provide short-term

incentives

3. long-term incentive plans

4. employee benefits5. paid expenses (perquisites)

6. insurance


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COMPENSATIONy COMPENSATION

-something (such as money) given or received as payment orreparation, or can refer to;

y Damages- legal term referring to the financial compensation

recoverab

le by reason of another's breach of duty; the money paid orawarded to a plaintiff.y Workerscompensation- is a payment provided to employees when

th

ey injured while at works.y Remuneration - is pay or salary, typically monetary payment for

services rendered, as in an employment. Usage is considered formal.y Executivecompensation- is how top executives of business

corporati

ons are paid. This includes a basic salary, bonuses, shares,options and other company benefits for work on the board of directors.y Deferred compensation- is an arrangement in which a portion of an

empl

oyee's income is paid out at a date after which that income isactually earned.

y Example of Deferred Compensation; PENSION, RETIREMENT PLAN.


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COMPENSATION FORCOMPENSATION FOR

DAMAGESDAMAGESy damages is an award ofmoneyto be paid to a person as

compensation for loss or injury

y Compensatory damages, called actualdamages, are paid

to compensate the claimant for loss, injury, or harmsuffered as a result of another's breach of duty


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WORKERSWORKERS COMPENSATIONCOMPENSATIONy is a payment provided to employees when they injured

while at works.


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CASE STUDY


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REMUNARATIONy is pay or salary, typically monetary

payment for services rendered, as in anemployment. Usage is consideredformal.

FACTORS DEVISING PAYSTRUCTURE

y Job evaluation.

y What must be paid to attract rightpeople

y Affordability of the organizationy Requirements to meet organizational

goals

y It must have 2 components-

base rate and scope


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EXECUTIVES COMPENSATIONy is how top executives of

business corporations arepaid. This includes a basicsalary, bonuses, shares,options and other companybenefits for work on theboard of directors


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IIPMEXECUTIVECOMPENSATION

PACKAGEy Two main components of executive compensation

package

y Base salary and Cash Incentive/ Bonusy Long-term Incentive Compensation

y The main elements drive compensation package

y Competitive marketplace

y Complexity of leading IIPM


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Compensation Presentation 2

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