New Trends in Compensation Management

Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt)

Professor Al-Qurmoshi Institute of Business

Management Hyderabad

New Trends in Compensation Management

The following are the new trends in compensation management

Group Mediclaim/Insurance Scheme Personal Accident Insurance SchemeCompany Leased AccommodationRecreation/ATM facilities Corporate Credit CardClub memberships

New Trends in Compensation Management (Contd.)

Cellular Phone/LaptopPersonal Health Care (Regular medical check-ups)LoansEducational Benefits (For Higher studies) Regular Get together and other cultural programsWedding Day/Birthday GiftEmployee Referral SchemeMaternity LeavePaternity Leave

New Trends in Compensation Management (Contd.)

Work-life BalancePay TransperancyBroad bandingVariable Pay (Incentive Pay)Flexible Benefits

Work-life BalanceFlexi-timeCompressed workweekJob sharingTelecommutingPart-time workModified retirementEmployee Assistance ProgrammeChild Care AssistanceElder Care Assistance

5

Pay TransperancyEmployees want transparency in pay

system. Now a days some organisations are using

transparent pay system.Pay transparency influences employees in• Fostering trust in management

• Increasing employee engagement• Encouraging discretionary efforts• Reducing turnover• Creating competitive advantage

Broad bandingConsolidating salary grades and ranges into

just a few wide levels or “bands,” each of which contains a relatively wide range of jobs and salary levels. Wide bands provide for more flexibility in

assigning workers to different job grades.

Lack of permanence in job responsibilities can be unsettling to new employees.

Variable Pay (Incentive Pay)Tying pay to some measure of individual, group, or organizational performance.Piecework incentivePay-for-performance Pay-for –personMerit pay BonusesSales incentivesProfit sharingGain sharingEmployee Stock Ownership Plan

Employee Stock Ownership PlanEmployee Stock Ownership Plan (ESOP) is an

employee benefit plan. The scheme provides employees the ownership of

stocks in the company. Employers have the benefit to use the ESOPs as a

tool to fetch loans from a financial institute. It also provides for tax benefits to the employers.Company makes annual contributions in a special

trust set up for ESOPs.

Flexible BenefitsFlexible benefits allow employees to pick

benefits that meet their needs. The idea is to allow each employee to choose a benefit package that is individually tailored to his or her own needs and situation.

Flexible BenefitsThe three most popular type of

benefit plans are: - modular plans, - core-plus options and - flexible spending accounts.

Modular PlansModular plans are pre-designed packages of

benefits, with each module put together to meet the needs of a specific group of employees.

So a module designed for single employees with no dependents might include only essential benefits.

Another, designed for single parents, might have additional life insurance, disability insurance, and expanded health coverage.

Core-plus PlansCore-plus plans consist of a core of essential

benefits and a menu-like selection of other benefits options from which employees can select and add to the core.

Typically, each employee is given “benefit credits,” which allow the “purchase” of additional benefits that uniquely meet his or her needs.

Flexible Spending PlansFlexible spending plans allow employees to

set aside up to the amount offered in the plan to pay for particular services.

It’s a convenient way, for example, for employees to pay for health-care and dental premiums.

Flexible spending accounts can increase employee take-home pay because employees don’t have to pay taxes on the amount they spend out of these accounts.

Benefits and Perks at GooglePhysical FitnessHealthy Eats - a chef makes custom cook every single

day RejuvenatingDry-cleaning and alterationsCar washUnrestricted dress codeDVD rentalBike repairsHaircutsTheatres House Rent allowance Transport and fuel for a specific project, amount

returned after service