3.6 b task 4 - compensation management

8/12/2019 3.6 b Task 4 - Compensation Management

1/17

Todays Agenda

Completion of last Task of Compensation Management

Role Play on BARS Method - To be done by you

Presentation on Use of Tax planning in compensation

managementTo be done by you

Any Questions - ?


2/17

Road map

Statutory provision governing different components of

reward system

Working of different institutions related to reward

system like Wage boards, pay commissions

Role of trade unions in compensation management

Tax planning


3/17

Statutory provision governing different

components of reward system


4/17

Different Components

ofReward System - I
http://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20REWARD%20SYSTEM%20-%20I.bmp


5/17

Different Components

ofReward System - II
http://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmphttp://localhost/var/www/apps/conversion/tmp/scratch_8/COMPONENTS%20OF%20REWARD%20SYSTEM%20-%20II.bmp


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Working of different institutions

related to reward system

Parameters Wage Board Pay Commissions

Sectors Private Public

Employees Limited range Wide range

Pay Structure of

Employees

Recommended by Owner Recommended by Government

Pay Set at irregular intervals Set at regular intervals

Function Statutory and Non-statutory Non-statutory

Commission Comparison within

employees

Equal pay for equal work within

employeesTypes of Pay

Commission Plans

No First, Second, Third, Fourth, Fifth

and Sixth

Reward System Performance driven COLA

Egs Newspaper establishments

and working journalists

Nationalized Banks and Industrial

establishments


7/17

Role of trade unions incompensation management


8/17

Trade Unions

"Trade Unions" means any combination, whether temporaryorpermanent, formed primarily for the purpose of regulating the

relations between workmen and employers or between workmen

and workmen, or between employers and employers, or for

imposing restrictive conditions on the conduct of any trade or

business

A trade unions may be defined as an organization of employees

formed on a continuous basis for the purpose of securinga

diverserange ofbenefits


9/17

Trade Unions

Trade unions are formed toprotectand

promote the interests of their members.

Their primary functionis to protect the

interests of workers against discriminationand unfairlabor practices


10/17

Role of trade unions in

compensation management

By helping in the recruitmentand selectionof workers

By maintaining disciplineamong the workforce

By enabling settlement of industrial disputesin a rational manner

By helping social adjustments

Workers have to adjustthemselves to the new working conditions, the new rulesand policies

Workers coming from different backgroundsmay become disorganized,unsatisfied and frustrated. Unionshelp them in such adjustment.


11/17

Taxplanning

Contributionto State

revenue legallylevied

on person, property,business, etc

Tax return is declaration

of income etc for

taxation purposes

Parameters for Tax Planning

Age (Senior Citizen..)

Income level (Slab level) Financial goals (depends on

situation)

Risk appetite (More Benefit

and Less risk) Awareness about tax


12/17

Use of Tax Planning in

Compensation

Presentation should be done by you..


13/17

You are working as HR Manager in ABC

Consultant. Your employer / supervisor isnot happy with the implementation of

current performance management system.

You are told to write a letterto youremployer / supervisor describing about the

improvement of Performance Management

System.


14/17

The income tax rates for Individuals and HUFs for

FY 2010-11 are as follows

Net Taxable Income (in `) Rate

Upto 1,60,000 Nil

Upto 1,90,000 (for women)

Upto 2,40,000 (for senior citizens 65/>)

1,60,001 to 5,00,000 10%

5,00,001 to 8,00,000 20%8,00,001 & above 30%

Moreover you would also have to pay an education

cess @ 3% on your tax liability computed.


15/17

The income tax rates for Individuals and HUFs

for FY 2011-12 are as follows

Net Taxable Income Rate

Upto 1,80,000 Nil

Upto 1,90,000 (for women)

Upto 2,50,000 (for senior citizens 60/>)

1,60,001 to 5,00,000 10%

5,00,001 to 8,00,000 20%

8,00,001 & above 30%


16/17

www.youtube.com/watch?v=hbkJ5MKEVEE

(Behavioral Economics of Intrinsic

Motivation)

http://www.youtube.com/watch?v=vRTPeQZfp

_A(HR Management: Compensation &

Incentives )
http://www.youtube.com/watch?v=hbkJ5MKEVEEhttp://www.youtube.com/watch?v=vRTPeQZfp_Ahttp://www.youtube.com/watch?v=vRTPeQZfp_Ahttp://www.youtube.com/watch?v=vRTPeQZfp_Ahttp://www.youtube.com/watch?v=vRTPeQZfp_Ahttp://www.youtube.com/watch?v=hbkJ5MKEVEE


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3.6 b task 4 - compensation management

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