Master of Business Administration- MBA Semester 4

MU0015 –Compensation Benefits - 4 Credits

Assignment Set- 1

Q1.What are the factors to be taken into account to ensure an optimum

compensation package for executives?

Many issues are present in designing executive compensation. There are a lot

of factors to be taken into account to ensure an optimum compensation package for

executives. In this section, some of the important criteria are elaborated.

Strategy criterion This refers to the correlation between the organisational strategy and the performance

of its executives. The difficult work is to come out with a model which balances

between organisational strategies and employee performance. One of the biggest

expenses for an organisation could be the raising cost of employee compensation. On

the other side, it cannot be neglected because the employees performance is directly

related to compensation. Therefore, some of the important steps to be taken into

account are:

Creating incentives based on the product life cycle.

Relating compensation to organisational strategies.

Following a simple compensation strategy.

Role criterion Hierarchical positions and organisational roles have a contributing effect on executive

compensation design. Executives act as figureheads, and hence they should be

compensated more than others in the lower rungs. However, organisations are now

experimenting with structures to respond to the changing environment. It may be

essential at times to sacrifice the traditional hierarchical structure. In such cases,

executive compensation may not be aligned with the figurehead roles.

Sometimes the pay is based on functional aspects and not on the role or position. For

example, pilots are not paid a high compensation package for their position, but for

their functional aspects. Therefore, the roles and responsibilities of the job is an

important aspect in deciding the executive compensation.

Behaviour criterion The actions and the processes followed by executives while performing their jobs

reveal their behaviour. This criterion is associated with the monitoring mechanism,

and executives usually try and do a subjective analysis of the business decisions.

Hence executive compensation based on behaviour criterion is quite sensible.

However, executive behaviour is difficult to measure and all the aspects of the

observed behaviour cannot be expected to meet a specific outcome. Hence, behaviour

criterion has not received much attention from the corporate world.

Size There is a general opinion that the size of an organisation plays the most influencing

role while designing executive compensation, while on the contrary, it is not. It is the

performance of the organisation which is the most important criterion which

influences executive pay package.

Market The marginal productivity theory of Roberts (1956) argues that a market forces, that

is, supply and demand for executive talent determine executive pay. This theory

considers the services of executives like any other input for running a business

operation. The theory argues that the value of the input (executive compensation) is

determined by the intersection of supply and demand in the labour market.

Peer compensation The social comparison theory (OReilly et al. 1988) assumes that the compensation of

selected peers plays a role in designing executive pay. Often board members of an

organisation consider themselves as a referral point in their executive pay

recommendations.

Q2.How is employee benefit and labour market linked?

Labour markets function through the contact of employees and employers.

Labour economics looks at the providers of labour services (employees), the

demanders of labour services (employers), and attempts to understand the resulting

model of wages, employment, and income. In other words, from the labour market

point of view, wages necessarily depends on the prevailing supply-demand conditions

of the labour market. Earlier, the compensation management practices of Indian

organisations focused on attracting, retaining, developing and compensation

employees, not considering the labour market conditions. However, with the increase

of economic activity and the subsequent increase in the competition between

organisations, employee retention has taken the utmost priority. Moreover,

globalisation has also contributed to the increased mobility of labour as talented and

capable employees now change jobs more frequently, moving across the globe. Given

the conditions, the demand and supply conditions in the labour market gain

importance and organisations have to consider these factors while setting up the

compensation policies. Designing compensation plans which keep pace with the

demand and supply of labour is now becoming a corporate practice

Q3.What are the factors that have to be determined before preparing the salary

structure?

From the previous section we came to know about establishing external

equity. In this section let us discuss how we can develop the pay structures of the

employees and why is it necessary to develop a proper pay structure.

Pay structure is the grouping of pay grades or pay bands. There can be more than one

pay structure in a compensation plan. For instance, there may be one pay structure for

service and maintenance positions, one for sales positions and one for managerial

positions. Or, the organisation may have just one structure for all positions. The

process of developing the pay structure deals with internal and external analysis to

assess the compensation package for the specific job profile. As discussed in the

previous unit, job description provides in-depth knowledge about the job profile and

its worth. For more information on job description, refer to unit 4 Compensation

Management and Job Design.

Pay structure helps in analysing the employees role, value and status in the

organisation. It also helps in the assessment of incentives.

If the organisation is paying very less to employees, then it may lose valuable

employees. If the organisation is paying high, then it may be unwisely spending

company resources.

The main goal of developing a pay structure is to manage and demonstrate an

organisations compensation philosophy and to reflect and support the advancement of

the companys culture. An effective pay structure also helps to attract and retain the

efficient employees.

An organisation's pay structure is a visible demonstration of its compensation

philosophy and plan. Pay structure is a tool, which is developed logically and

communicated effectively to make the employees more motivated towards the job.

The following three factors have to be determined while developing a pay structure:

The proper data for establishing the relative value of a particular job to the

organisation.

The proper pay range for a job with the defined value to the organisation.

The value of each job position within the specified pay range.

Once the above factors are determined, pay structures can be developed through the

following steps:

1. Group the jobs with those that have a similar value in the organisation.

2. Measure these groups to find out the number of pay ranges needed to group the

jobs on the basis of their value to the organisation.

3. Create a salary range that has a minimum point, a mid-point and a maximum point

for amounts allotted within the range and determine the pay for each job grouping.

An organisations compensation philosophy and pay strategy determines the approach

that should be taken to allocate pay across job ranges. Factors to be considered are:

Number of years of experience.

Number of reporting staff members.

Performance evaluation results.

Hazardous working conditions.

Undesirable shifts.

Education and degrees.

Professional certifications.

Management opinions.

A successfully developed pay structure identifies career development in addition to

promotion. It demonstrates and pays for the business results on which an organisation

places value. An effective pay structure is worth the time and attention. It pays to get

it right.

How an organisation structures its base salary program is basically a matter of

organisational philosophy, although marketplace practices are very essential to

consider in highly competitive situations. In structuring this base pay program, several

options are available:

Organisations can use a single rate structure in which the employees performing

similar jobs will receive the same pay rate.

Organisations can use a tenure based approach which focuses on from how long an

employee has been employed in a particular job.

Organisations can also use a combination of a tenure-based plan and a merit-based

plan. For example usually employees begin their job at a fixed rate, and then progress

to higher rates during their first year based on the number of years spent in the job,

then any additional pay increase is awarded only on the basis of performance.

Organisations can use a pay system based on productivity. An example for this would

be an employee who is paid only a sales commission.

An increasingly popular option is some form of base pay with an incentive

opportunity, either based on individual, team, unit, or company performance.

Q4.Describe Mintzberg 5 P’s of strategy.

The word "strategy" has been used implicitly in different ways even if it has

traditionally been defined in only one. Explicit recognition of multiple definitions can

help people to manoeuvre through this difficult field. Mintzberg provides five

definitions of strategy:

Plan

Ploy

Pattern

Position

Perspective.

Plan

Strategy is a plan - some sort of consciously intended course of action, a guideline (or

set of guidelines) to deal with a situation. By this definition strategies have two

essential characteristics: they are made in advance of the actions to which they apply,

and they are developed consciously and purposefully.

Ploy

As plan, a strategy can be a ploy too, really just a specific manoeuvre intended to

outwit an opponent or competitor.

Pattern

If strategies can be intended (whether as general plans or specific ploys), they can also

be realised. In other words, defining strategy as plan is not sufficient; we also need a

definition that encompasses the resulting behaviour: Strategy is a pattern -

specifically, a pattern in a stream of actions. Strategy is consistency in behaviour,

whether or not intended. The definitions of strategy as plan and pattern can be quite

independent of one another: plans may go unrealised, while patterns may appear

without preconception.

Plans are intended strategy, whereas patterns are realised strategy; from this we can

distinguish deliberate strategies, where intentions that existed previously were

realised, and emergent strategies where patterns developed in the absence of

intentions, or despite them.

Position

Strategy is a position - specifically a means of locating an organisation in an

"environment". By this definition strategy becomes the mediating force, or "match",

between organisation and environment, that is, between the internal and the external

context.

Perspective

Strategy is a perspective - its content consisting not just of a chosen position, but of an

ingrained way of perceiving the world. Strategy in this respect is to the organisation

what personality is to the individual. What is of key importance is that strategy is a

perspective shared by members of an organisation, through their intentions and / or by

their actions. In effect, when we talk of strategy in this context, we are entering the

realm of the collective mind - individuals united by common thinking and / or

behaviour.

Q5.How does compensation effect employee satisfaction?

Linking employee satisfaction to compensation is being practised since long

time in most of the organisations. Compensation designs based on this link usually

measure performance from a relatively objective side, such as sales or revenues, stock

price, productivity gains and so on. The example of this effort in recent times is

embedded in labour contracts recently negotiated at United Airlines (UAL). The

unions were able to push for a major new approach in part because they own 65

percent of UALs stock. Under the terms of agreement more than half of the bonus pay

received by the top 625 UAL managers was determined by criteria like time

performance and employee satisfaction. While time performance is clearly an

objective measure of performance, employee satisfaction is less objective and more

unusual. In fact, only a small handful of other firms use satisfaction to determine

executive pay.

Employee satisfaction has to be measured and evaluated before a new compensation

plan can be implemented. Usually, an outside survey firm is hired to perform the

annual survey for employees. The results of this survey is shared through out the

company. Thus, the top management will get to know how employees feel about the

compensation. Employee satisfaction towards compensation is the most important

discourse for any company, because it is directly related to the performance that can

be achieved by employees. The more an employee is satisfied and happy with their

compensation, the better they perform. In turn, this will influence the company

performance too. Thus companies should strive to bring in a fair compensation plan

so as to increase employee satisfaction. Employee satisfaction with respect to

compensation and rewards depends on the level of intrinsic and extrinsic results and

how the employee views those results. These results have different values for

different employees. For most of the employees, a responsible and challenging job

may have neutral or even negative value depending on their education and previous

experience by work providing intrinsic results. These employees might have a higher

value for monetary rewards, whereas for a few others, a responsible and challenging

position or the learning involved in the job may have very high positive values.

Appropriate type of compensation plans, rewards and benefits are important for

employees. Financially, the employees must be satisfied that their salaries are justified

and are according to their contribution to the company. In this respect, both

employees and employer basically work towards the same goal for mutual benefit.

Non financial rewards should also be given to employees for their contributions. For

example, paid time off, recognition, employee of the month programs, nominations to

training programs, career growth opportunities and so on.

To provide incentives, these models support the existence of reward systems that

structure compensation so that the employees expected value increases with observed

employee productivity. Thus compensation can take many various forms, including

appreciation from managers and co-workers, implicit promises of future promotion

opportunities, feelings of self-esteem that come from superior achievement and

recognition and current and future cash rewards related to performance.

Q6.Ms.Deepa Mehra is the VP-HR of Induslink Network. She is assigned the

task of finding a new CEO for the company and fixing the compensation. What

are the trends that she will have to look into before finalizing the compensation

package for the CEO?

Assignment Set- 2

Q1.What is CTC? What are the components of CTC?

Cost to Company (CTC) is the amount that you cost your company. That is, it

is the amount that the company directly or indirectly spends on you because of

employing you.

Components of CTC

The following are the components of CTC:

Basic.

Dearness Allowance (DA).

House Rent Allowance (HRA).

Medical allowance.

Conveyance allowance.

Special Allowance.

Vehicle Allowance.

Incentives or bonuses.

Leave Travel Allowance or Concession (LTA / LTC).

Telephone / Mobile Phone Allowance.

CTC includes the salary directly paid to the employees, the benefits directly

attributable to the employees such as companys contribution to the provident fund,

pension funds, medical insurance premium, life insurance premium, cost of loans

offered to the employees, telephone expenses for mobile phone connections and land-

line connections, benefits offered for visiting the home country or hometown and so

on.

It is important to note that even a lower CTC might mean a higher take home pay than

an offer with higher CTC, if the other components are arranged differently. Similarly,

you must not infer that with increase in salary or position, your pay as percentage of

salary will increase/decrease. You have to assess each offer separately. Most

companies usually talk in terms of CTC as the figures look more impressive.

However, they are often misleading. You should carefully look at their offer and

calculate yourself how much your take home pay will be. After all, all deductions are

based on fixed percentages and you can easily arrive at the right figure. Even the

company will guide you on this. Sometimes, even a lower take home pay may be

beneficial if the other payments are made against vouchers/bills (for example,

telephones, cars, refreshment, and so on). This will ultimately lower your tax liability.

Hence you should look at both CTC as well as take home pay while negotiating. You

also have to look at certain other criteria like work timings, number of holidays,

employee centric schemes for further education, and so on. These factors must not be

ignored even though you cannot put a money value to these factors.

The total compensation includes the value of all the perks and benefits the employee

is offered by the company in addition to the employees salary. Calculating the annual

CTC is important from the employees and the organisations perspective. This helps

the organisation ascertain the HR cost and the employees understand what they are

being offered, as they can benchmark their CTC with other comparable organisations.

Employees can decide on other job offers depending on the CTC. For employees to

decide on other job offers, it is very important that they understand how the CTC is

calculated. However, it is difficult to arrive at the CTC as many components of the

CTC considered by the company may not be considered as a part of total

compensation package. Therefore, to arrive at a comprehensive CTC value,

organisations need to be careful and add all the components of compensation or their

equivalent cash value.

Q2.What are the elements of compensation?

Compensation refers to money and money-related extras[2]. Thus, in addition to

a persons base pay, compensation can include bonuses, merit increases, variable pay,

and long-term Incentives. Benefits include the remaining things, such as healthcare,

pension plans, stock options, and legal services.

An organisations compensation program sends a message to employees about its

commitment to encouraging, recognising, and rewarding employee performance.

While money should certainly never be the only motivator, it is definitely important.

To be successful, a compensation program must link employee performance with

business performance. Employees have to understand what the company expects of

them, why the company expects it and the possible rewards when performance

expectations are met. Taking this approach in preparing the pay structure provides an

ownership context for employees, knowing they are important to the ongoing success

of the organisation, and that if they do their part well, they will share in the rewards

generated by that success. Let us now look at some of the most common elements or

components of Compensation and Benefits.

Elements of compensation Let us first discuss the elements of compensation and later we shall discuss what goes

into benefits.

The primary elements of a compensation package are:

Base pay: Base pay is the fixed rate of compensation that an employee receives for

performing the standard duties and assignment of a job.

Employers need to ensure that base-pay programs are designed to reveal market

practices within their identified competitor group. To achieve this, organisations must

first identify their competitive market. This can be achieved by considering different

factors, including the nature of the industry, geographic location, total employment

and annual revenue. Next, they need to conduct an assessment of market pay practices

for similar jobs within the recognised competitor group. This assessment should

involve the duties, skills, and impact levels of each job evaluated that is, each job of

similar size and scope.

Then a pay structure for managing the competitive base-pay levels for the jobs

throughout the organisation should be developed. Pay structures typically consist of a

series of pay ranges or bands that reveal competitive rates of pay for specific jobs, as

well as allowing room for salary growth. Jobs of similar value from both the market

point of view and an internal point of view are grouped together. Then a competitive

pay range is developed around the market rates for the particular jobs.

Variable pay: Performance-based variable pay continues to achieve momentum as a

more successful way to identify and reward employee performance. Also known as

pay-per-performance, variable pay is popular in todays corporate world. By including

a percentage of variable pay in the compensation plan, organisations ensure that two

people with different efficiency levels do not get the same benefits. By doing this, the

company rewards productivity and hard work and motivates the under-performers to

work hard. Once limited to senior management levels, these incentive or bonus plans

are being redesigned to reward the achievement of specific company or employee

performance objectives. In a variable pay plan, the size of the award varies among

employees and from one performance period to another, based on levels of

achievement measured, as well as against pre established company and employee

performance targets. Amounts are usually calculated as a percentage of base pay

depending on job category and position. Rewards are normally paid in cash on an

annual, semi annual or quarterly basis depending on the plan design. Plan designs

range from sales-commission types to individual incentive or bonus plans to team

awards. The main idea of these programs is to reward innovation and hard work and

to discourage mediocrity in performance.

Skill and competency-based pay: Skill-based pay offers employees extra

compensation when they have new skills specially recognised by the company as

essential to achieve a competitive advantage. Skill-based pay can be particularly

useful for employees who like their current jobs but are looking for new challenges.

Competency-based pay is more widespread than skill-based pay because the criteria

cover not only measurable skills but also knowledge, performance behaviours and

personal attributes. It helps out employees to grow in the company and helps them to

close the knowledge gaps needed for creative moves.

Long-term incentive compensation: Long-term incentive compensation vehicles,

such as stock-option plans and other deferred-compensation plans, which are not

usually used to reward performance, are achieving desirability among employees.

These long term incentive compensation plans appreciate employees based on

company performance over a long term that is typically three to five years. Stock-

option plans are a common form of long-term compensation at public organisations.

In most private companies, incentives that reflect stock plans are used for key

employees.

Long-term compensation plans can be valuable preservation tools for the success of

an organisation. They help to focus on driving and improving the key employees to

achieve the financial performance of the company over a longer term.

Q3.Define internal equity and explain its importance.

The term equity in compensation theory and practice arises in many different

contexts. The following are the major areas:

The legal and economic issue related to equal pay for similar tasks performed by

employees.

The difference in pay caused due to external competition or market pressures.

The fairness of individual wage rates for people performing the same task.

The views of individual employees of their value relative to their pay.

We say that internal equity exists in an organisation when an employer pays wages

appropriate to the relative internal value of each job. This is established in accordance

with the employer's perception of the importance of the work performed.

However, before an organisation can evaluate the importance of each job, it must first

determine the job-related factors that will be used for setting compensation levels.

This refers to the compensable factors. The following are some compensable factors

that are used for lower level jobs.

Education required.

Physical demands.

Experience required.

Supervisory/managerial responsibility.

Working conditions.

Responsibility for equipment/materials.

Public contact.

Accident or health hazards.

Manual ability.

Determining the relative internal value of jobs within a large or complex organisation

could prove difficult. Job-evaluation methods are used to develop a job hierarchy that

reflects the relative value of jobs, which is assessed on the basis of skills, effort,

responsibility, and working conditions. Several job-evaluation approaches have been

developed. These approaches include:

Whole job ranking.

Classification.

Point factors.

Factor comparison.

Slotting.

Scored questionnaires.

An organisation may choose a rigorous and disciplined approach to job evaluation or

a relatively simple one. However, it is important to note that all approaches are

subjective, as they depend a lot on the judgement, accuracy and commitment of the

top management of an organisation.

Internal equity covers a wide range of subjects apart from the amount paid to

employees such as stock plans, benefits, retirement plans, health and welfare plans,

vacation time, and so on.

To maximise internal equity, an organisation must assess the value of each individual

and the value of the job they are performing to the entire organisation. Such

investments can be done in different ways and most of the companies benefit greatly

by hiring an outside firm to check on methods to reduce costs and increase worker

motivation.

The internal equity method undertakes the positioning of a job in the organisational

hierarchy. The main aim of the process is to balance the compensation provided to a

job profile when compared to the compensation provided to its senior and junior level

in the hierarchy. This fairness is ensured using methods such as:

Job ranking.

Job classification.

Factor comparison.

Point system.

Figure depicts methods of Internal Equity.

Figure Internal Equity

Job ranking: This method involves placing jobs in order, from the most valuable (or

most difficult) to the least valuable (or least difficult) using a single factor such as job

complexity or the importance of that job to the organisation.

Job classification: In this method, each job is measured against a pre-existing set of

job classes that have been designed to cover the complete range of work that the

employees would perform.

Factor comparison: In this method, a set of compensable factors are identified as

determining the worth of jobs. The examples of compensable factors are skill,

responsibilities, effort and working conditions.

Point systems: In this method, clusters of jobs to be evaluated are determined. Jobs

are clustered based on the type (for example sales job, factory job and so on), and an

evaluation committee develops a point plan for a cluster or a group at a time.

Several different techniques can be adopted in your business to maintain internal

equity. A few of the techniques are as follows:

Optimise employee performance.

Reducing unnecessary levels of employee pay.

One tool that can be used to achieve internal equity is variable pay scale. Using such a

pay scale, you can pay your employees on the basis of their performance. In this

manner, the employees who do a better job will receive greater compensation than

those who perform average or less than expected. On the whole, employees are

motivated to perform better and produce more when they understand how their

performance affects their pay. Hence, educating them on how their pay is determined

can make a big difference.

Q4.What are the major issues related to repatriation?

The term repatriation refers to bringing the employees who are on an

international assignment back to the home country. It is very important to manage

repatriation of employees in a very careful way. A poorly managed repatriation can

lead to a feeling of frustration and cynicism in the employees. These feelings can be

worse than the culture shock experienced in the first weeks of the assignment.

It requires transparency in repatriation policy, sharing information on the career

progression path, degree and support from the organisation during the international

tenure and so on. Many organisations develop and share documented guidelines with

respect to overseas assignment, so that the employees understand the rules and

regulations and also know what to expect.

Expatriate managers often return to the home office with a wealth of experience and

perspectives. Yet, poor repatriation processes are blamed for underutilizing talent,

losing human capital, and discouraging skilled managers from accepting overseas

assignments (Gregersen and Black, 1995).

Often the impact of repatriation for the employee is far greater than that of the

original move to the host location. The move abroad is usually exciting, involving a

promotion or at the very least, an increase in peer status. Also, the day to day impact

of life in the new culture is more keenly felt by the spouse and children, who interact

with it on a far more personal basis. Moreover, the employee will be chosen for a

particular skill set, which are generally appreciated by the new team as an asset.

As the project comes to an end, the expatriate starts the closure process of the post,

probably handing over to a locally based team or manager. At this point, home

country HR should be back in touch with the employee, to start the career planning

for the home move. However, most companies provide no post assignment

guarantees, and this has a dual impact on the employee. Firstly, they will feel deeply

insecure since they may have taken their family away from extended family and

friends, interrupted education programmes and careers, and for what? To return home

with no job?

Another issue is the change in living standards. While settling down in a foreign

country, they would have been offered financial incentives for the family to relocate

from generous housing allowances to the payment of school fees. On returning home,

these are taken away and the lifestyle that the family has become used to is radically

reduced. This is particularly a factor for Europeans coming home from the USA,

where living standards are very high in comparison with the cost of living in most

European cities.

It is the children of expatriates that the impact can be the most pronounced, and the

most dramatic, especially for teenagers caught between school systems, deep

friendships and hormonal angst! Where the assignment has been a long one, there is

the risk of the child becoming a Third Culture Kid far more familiar with the host

culture than the home one. For them the return is a far greater challenge, as they are

already at home and will be going somewhere completely foreign. Not only will they

face a profound culture shock, they will also struggle with a sense of loss of identity

as they leave their friends and peers behind.

Q5.Describe flexible workforce in detail.

Thanks to the changing employment situation, today, the average workforce of

an organisation is far different to that of a few years ago. More and more companies

are going for different kinds of employee engagements like temporary staff,

consultants, freelancers, contractors, sub-contractors and so on. This brings with it its

own particular sets of advantages and disadvantages for organisations. Managing the

flexible workforce of a company needs a different set of policies and strategies.

Let us now discuss some of the key reasons or trends for the emergence of flexible

workforce below:

Retention of women employees: Over 60 % of women opt out of full-time work

within 6-8 years of employment, but 93% of these women want to return to work part-

time. Companies that tap into this talent pool by accommodating their request for

flexibility in working hours will create a competitive advantage in the labour market.

Retirement of baby boomers: Companies in certain sectors will face a significant

skilled labour shortage with a huge number of experienced people eligible for

retirement in the next ten years. Many of these baby boomer (people born between

1945 and 1965) employees, however, would prefer working in a flexible capacity

rather than going for retirement. Many companies would prefer to retain them on

flexi-hours engagement, as they prove to be highly beneficial, especially in the

absence of a proper knowledge management system.

The Retention of the voluntary workforce: In certain high-tech sectors, many

highly skilled employees no longer have to work as they would have earned and saved

enough for a life time and are leaving because they are unhappy with a lack of work-

life balance. Companies are ready to accommodate their need for flexibility in

working hours rather than losing out on highly skilled workforce.

Challenges of global teams: Today, due to globalization, more and more people are

required to work continuously in order to communicate and collaborate with

colleagues around the world. Due to this, people are experiencing a feeling of burnout

and employers have no option but think beyond 9 to 5 and implement flexible

schedules to accommodate these challenging logistics.

Let us now discuss some of the different types of work arrangements that

accommodate a flexible work force below:

Job sharing: Here, the full time job is split between two co-workers and benefits are

given in proportion based on the number of hours put in by each employee.

Daily flexible choice: In this the log-in and log-out time may vary daily.

Open flexible choice: In this the employees can choose the total number of hours

required to complete the specific task.

Compressed week choice: Here, employees have a choice to work for less than five

days in a week.

Comp-off: In this, the employees can extend their timings on busy days and use that

later for compensatory time off.

After discussing the different types of work arrangement that accommodate a flexible

work force, let us now discuss the types of locations:

Satellite options: These are remote work centres like satellite work centres which are

provided by the employers.

Telecommuting: Employees work from home for a few days in a week via

telecommunications and then work out of office on the remaining days.

Teleworking: Employees work from home on all the days of the week via

telecommunications.

This flexi-time arrangement has a lot of benefits for both the employers and the

employees. The benefits for the employees are:

Provides an opportunity for workers who are disabled.

Working parents can meet their family obligations.

Saves commuting time.

Provides time and location flexibility.

Reduces job related stress and also interruptions at the workplace.

The benefits for the employers are:

Influences employees in a positive way.

Improves productivity.

Reduces absenteeism.

Improves employee job satisfaction, job performance and work quality.

Reduces costs related to environmental requirements, time, space, employee safety,

relocation of the employees, and productivity.

Helps in retention of voluntary workforce, women and baby boomers.

Companies can terminate contingent workers services more easily.

With respect to compensation and benefits paid to the flexible workforce, most

companies pay an hourly wage, which is fixed on the basis of the complexity of work

as well as the skill sets of the employee. No amount of paid leave, insurance and

legally required benefits like gratuity and retirement benefits are paid.

Q6.Mr.Senthil is the HR Manager of First Source Pvt. Ltd. He found that many

of the employees have been doing the same work for a long period of time. He

decided to enrich some of their jobs. List some of the strategies which can be

used by Mr.Senthil to enrich jobs in organisations.