compensation management additional info fr diagrams

8/10/2019 Compensation Management Additional Info Fr Diagrams

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COMPENSATION MANAGEMENT

1. Compensation managementCompensation is what employeesreceive in echange !or their contri"#tion to the organi$ation.Totalcompensation % &irect ' In(irect Compensation) *ase Pay + )Incentives *ene,ts+

-. Components o! employee rem#neration em#neration /inancial Non0,nancial *asic wages Incentives In(ivi(#al plans 2o" contet Gro#p plansChallenging 3o" esponsi"ilities Growth prospects /ringe "ene,ts S#pervisionP./. Per4#isites 5or6ing con(itions Me(ical care Car 2o" sharing etc Acci(entrelie! Cl#" mem"ership 7ealth an( Pai( holi(aysGro#p ins#rance /#rnishe(ho#se Stoc6 option scheme 8iew sli(e

9. CONCEPT o! 5age an( Salary5age in a wi(e sense means anyeconomic compensation pai( "y the employer #n(er some contract to hiswor6er !or the service ren(ere( "y them an( in narrow term 5age are pricepai( !or the services o! la"or in the process o! pro(#ction an( incl#(e only theper!ormance wages 5AGES MONE: EA; MINIM it is the monetary !orm o! wage

payment.eal wage> tr#e val#e o! money wage in terms o! its p#rchasing

power.Minim#m wage> the wage which not provi(e not only !or the "ares#stenance o! li!e "#t !or the preservation o! the e?ciency o! wor6ers.

@. Concept o! ;iving 5ages;iving wage is the wage which provi(es thewor6men the necessaries !or li!e pl#s certain other amenities consi(ere(necessarily !or the well"eing o! wor6er ta6ing the social position o! them.the living wage sho#l( ena"le the mail earner to provi(e !or himsel! an( his!amily not merely the "asic essentials o! goo(s clothing an( shelter "#t a

meas#re o! com!ort incl#(ing 1.e(#cation !or chil(ren -.protection against illhealth 9.essential social nee(s =.ins#rence meas#res

. Concept o! !air wages/air wage is that wage which the la"o#rer gets

!or his wor6s 3#st near to minim#m wages an( living wages.It is somewhere

in "etween the minim#m wages an( the capacity o! in(#stry to pay.A wagerate is !air in the narrower sense when it is e4#al to the rate c#rrent !or similarwor6man in the same tra(e B neigh"o#rhoo( an( !air in the wi(er sense whenit is e4#al to the pre(ominant rate !or similar wor6 thro#gho#t the co#ntry.

. Components o! wage str#ct#re 5AGE 0ST


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1J. Overtime AllowanceOvertime allowance is pai( to wor6ers where the

employees has to wor6 "eyon( his normal (#ty ho#rs.In the early (ays the

concept o! OA was (i(nt eist "eca#se there was no ,e( ho#rs o! wor6.So

it meant !or chec6ing the eploitation o! wor6ers.A c#lt#re o! overtime is(evelope( in many in(#stries where the employer s#pplement their

pro(#ction an( the employees s#pplement their wages.

In some cases thewor6er earns more OA than his wages.

11. *on#s*on#s is pai( to employees in a((ition to their normal wage.

It is something pai( as a gest#re o! goo(will "y the employer to employee.It is an e0gratia payment to wor6ers which is not an o"ligation in the part o!the employers an( th#s cant "e claime( "y the employees as a matter o!right.*#t now the e0gratia has "een replace( "y o"ligatory payment.i+ a minim#m rates o!

wages !or Lme0wor6 to "e 6nown as minim#m time rateii+ a minim#m

rate o! wages !or piece0wor6 to "e 6nown as a minim#m piece0rateiii+ aminim#m rate o! rem#neration to apply in the case o! employees employe(on piece0wor6 !or the p#rpose o! sec#ring to s#ch employees a minim#m rateo! wages on a time wor6 "asis to "e 6nown as g#rantee( time0rate.iv+ aminim#m rate to apply in s#"stit#tion !or minim#m rate which wo#l(otherwise "e applica"le in respect o! overtime wor6 (one "y

1=. Minim#m rates o! wages may "e ,e( "y one or more o! the!ollowing wage perio(snamelyi+ "y the ho#rii+ "y the (ayiii+ "y the month

1@. Proce(#re !or ,ing an( revising minim#mwagesThe appropriateGovernment shall a(opt any o! the !ollowing proce(#res in ,ing minim#mrates o! wages in respect o! Sche(#le( employmentA+appoint as manycommittees an( s#"0committees as it consi(ers necessary. to hol( en4#iriesan( a(vise it in respect o! s#ch ,ation or revision as the case may "e.or*+"y noti,cation in the o?cial Ga$ette p#"lish proposals !or the in!ormation o!persons li6ely to "e aHecte( there"y an( speci!y a (ate not less than two M on t h s !rom the (ate o! noti,cation on which the proposals will "e ta6en intoconsi(eration


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1. 5age &etermination Process2o" Analysis 5age ;egislation 5age S#rveyAn( Analysis o! 5age Str#ct#re2o" &escription 2o" elevantAn( Eval#ationOrgani$ational2o" Speci,cation pro"lems #les o! a(ministration&iHerentialPer!ormance Employee appraisalStan(ar(s 5age Payments

1. A(ministration o! 5ages an( Salaries7r &epartmentCommittee 0

Approval an( recommen(ation to mgt. on 3o" eval#ation metho(s an(,n(ings 0 eview an( recommen(ation o! "asic wage an( salary str#ct#re 07elp in the !orm#lation o! wage policies !rom time to time 0 Co0or(ination an(review o! relative (epartmental rates to ens#re con!ormity 0 eview o! "#(getestimates !or wage an( salary a(3#stments an( increases

1D. Principles o! 5age an( Salary A(ministration1. &iHerences in pay !or3o"s are "ase( #pon variations in 3o" re4#irements )s6ill responsi"ilityphysical con(ition etc.+-. ;evel o! wages an( salaries sho#l( "e reasona"le inline with that prevailing in the la"o#r mar6et.9. The plan sho#l( care!#lly(isting#ish "etween 3o"s an( employees.=. E4#al pay !or e4#al [email protected]#ita"le practice sho#l( "e a(opte( !or the recognition o! in(ivi(#al

(iHerences in a"ility an( contri"#tion. Clearly esta"lishe( proce(#re !orhearing an( a(3#sting wage complaints.

1. . Comm#nication to employees regar(ing the proce(#re #se( toesta"lish ratesD. 5age sho#l( "e s#?cient to ens#re !or the wor6er an( his!amily reasona"le stan(ar( o! living.. 5age an( Salary str#ct#re sho#l( "eFei"le so that changing con(itions can "e easily met.1J. Prompt an( correctpayments o! the (#es o! the employees m#st "e ens#re(11. Perio(icalrevision o! wages.1-. 5age an( salary payments m#st !#l,ll a wi(e variety o!h#man nee(s li6e sel!0act#ali$ation.

-J. Theory o! wages S#"sistence Theory> )&avi( icar(o+ The theory "ase(

on the ass#mption that i! the wor6ers were pai( more than s#"sistence wagetheir n#m"ers wo#l( increase as they wo#l( procreate more an( this wo#l("ring (own the rates o! wages. I! the wage rates !all "elow the s#"sistencelevel the n#m"er o! wor6ers wo#l( (ecrease. 5ages ten( to settle at a level3#st s#?cient to maintain the wor6er an( his !amily at minim#m s#"sistence.5ages /#n( Theory> )A(am Smith+ I! the !#n( was large wages wo#l( "e highi! it was small. 5ages wo#l( "e re(#ce( to the s#"sistence level. S#rpl#s8al#e Theory o! 5ages> )Qarl Mar6s+ esi(#al Claimant Theory> )/rancis A.5al6er+ Marginal Pro(#ctivity Theory> )Phillips 7enry 5ic6stee( an( 2ohn *atesClar6+ *argaining Theory o! 5ages> )2ohn &avi(son+

-1. *ehavio#ral Theories> )Marsh B Simon o"ert "in Eliot 2ac4#es+0

The employees acceptance o! a wage level0 The internal wage str#ct#re 0Social stat#s internal consistency maim#m an( minim#m wage(iHerentials (eman( !or specialise( la"o#r.0 5age an( Salaries an(Motivators

--. Metho(s o! 5age /iation;egislation );egal Enactments+Govt.PoliciesCollective "argaining2o" Eval#ation5age "oar(s

-9. wAgE vs Sa;ayCompensation > its the money receive( in theper!ormance o! wor6 pl#s the many 6in(s o! "ene,ts or the services that theorgani$ation provi(es to its employees.A wage is the rem#neration pai( !or

the service o! the la"or in pro(#ction perio(ically to an employee or wor6er.

Salary normally re!ers to the wee6ly or monthly rates pai( to clericala(ministrative an( pro!essional employees. the white collar employees+


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-=. /aCtOrS iN!;#NcInG 5aGe B Sa;aystr#ct#reOrgani$ation a"ility to

pay&eman( an( s#pply o! la"o#rPrevailing mar6et rateCost o! livingThe living wage> the wage pai( sho#l( "e a(e4#ate to ena"le an employee tomaintain himsel! an( his !amily at a reasona"le level o! eistence.

Pro(#ctivity> the ratio "etween o#tp#t an( man ho#r.Tra(e #nion "argaining

power also aHect the wages.

Managerial attit#(es

-@. &iHerences> organi$e( an(#norgani$e( sectors.The organi$e( sectoren3oys "etter con(itions o! wor6 protection #n(er la"or laws are "etter#nioni$e( an( most en3oy collective "argaining rights when compare( to their#norgani$e( sector co#nter parts.On the other han( the (egree o!protection B tra(e #nion rights availa"le !or #norgani$e( sector is limite( >Rhowever varies (epen(ing on eten( o! #nioni$ationKpolitical climate o! thestate. )QeralaK5est0*engal+. In s#ch cases they en3oy near e4#al protection.

-. &iHerences> Government P#"lic an(Private sector wor6ers.Government wor6ers en3oy high level o! 3o" protection tra(e #nion

representation witho#t collective "argaining rights.P#"lic Sector wor6ersen3oy tra(e #nion an( collective "argaining rights.Private sector wor6ersen3oy tra(e #nion an( collective "argaining rights li6e p#"lic sector. C#rrenttren( to non0#nion wor6places.ight to stri6e !or government employees Rprohi"ite( "y S#preme Co#rt o! In(ia in -JJ-. O?cersKeec#tives in anysector R no tra(e #nion collective "argaining rights.

-. /ramewor6 !or wage calc#lationOrgani$e( Sector>0 The (aywee6 an( month are the "asic #nits !or wages calc#lation.


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91. Committee on /air 5ages 1=Minim#m 5age> 0 "are s#"sistence o!

wor6er eno#gh !or health e?ciency an( wor6ing capa"ility./air wage>

A"ove minim#m wage;iving wage> male wor6er not to provi(e !or himsel!"#t !or !amily R not 3#st "are necessities "#t !r#gal com!ort e(#cation !orchil(ren social sec#rity etc.Nee( "ase( minim#m wage.

9-. Instit#tions involve( in wage(etermination.5ages ;egislation.

)covers organi$e(K#norgani$e(+5age *oar(s )covering select private an(p#"lic sectors+. Pay Commission )!or governmentKP#"lic Sector+. Collective*argaining )!or covere( wor6ers+. Government &irectivesKSpecialcommissionsSalary S#rveysKCompensation Cons#ltants R !or private sectornon o?cer ca(re.

99. 5ages ;egislationMinim#m 5ages Act 1=DPayment o! 5ages Act

19.E4#al em#neration Act 1Companies Act [email protected] )s+>Payment o! *on#s Act

compensation management additional info fr diagrams

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