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presented by:-

Anukampa Shekhawat


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Compensation Management is a systematic approach to provide

monetary value to employees in exchange for

work performed.

Compensation is what employees receive in

exchange for their contribution to the organization.

Compensation is the remuneration received by an employee in

return for his/her contribution to the organization.


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y It is an organized practice that involves balancing the work-

employee relation by providing monetary and non-monetary

benefits to employees.

y According to Robbins Compensation management is a process

of determining cost effective pay structure, designed to attract and

retain, provide an incentive to work hard, and structures to ensure

that pay levels are perceived as fair.

y Cascio has defined compensation as "Compensation includes

direct cash payments, indirect payments in the form of employee

benefits and incentives to motivate employees to strive for higher

levels of productivity.y Compensation management, also known as wage and salary

administration, remuneration management, or reward

Management.


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1. Base pay: it is the basic compensation an employee gets,usually as a wage or salary.

2. Variable pay: it is the compensation that is linked directly toperformance accomplishments (bonuses, incentives, stockoptions).

3. Benefits: these are indirect rewards given to an employee or

group of employees as a part of organizational

membership (health insurance, vacation pay,

retirement pension, etc).


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Compensationsystem

Directcompensation

Base pay

Wage

salary

Variable pay

Incentives

bonus

Indirectcompensation

Protection

programs

Medicalinsurance

life insurance

pension

Pay for timenot worked

Vacations

Holidays

Services and

perquisitesRecreationalfacilities

Car

Low cost orfree meals


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y Attract and Retain qualified employees.

y Increase or maintain morale/satisfaction.

y Reduce turnover and encourage company loyalty.

y Provide social status to employees.

y Ensure equity.

y Reward and encourage peak performance.

y Create a healthy competition among employees.

y Provide better quality of life.

y Comply With Legal Regulations.


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y Improve efficiency and results produced by

employees.

yHelps in running an organization effectively andaccomplishing its goals.

y Increases self-confidence.

y Every employees will give their best to the

organization.

y Job satisfaction and Motivation.


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y Low Absenteeism.

y Minimizes the labor turnover.

y Retain the best talent.

y Help in organizations success and prosperity.

y A rational compensation system will minimize the complaints

from the employees.

y Help management in complying with the various labor acts.


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Compensation can be viewed as -

y a system of rewards that motivate employees

to perform.

y a tool used by organizations to foster the

values, culture and the behavior they require.

y an instrument that enables organizations to

achieve their business objectives.


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y Compensation is a primary motivator for employees. People look

for jobs that not only suit their creativity and talents, but

compensate themboth in terms of salary and other benefits.

y Compensation is also one of the fastest changing fields in Human

Resources, as companies continue to investigate various ways of

rewarding employees for performance.


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Internal factors

y Business strategy

y Corporate culture and philosophy

y Performance appraisal

y employee himself or herselfy Costs/resource availability

External factors

y Competition

y Labor Market

y Cost of Living

y Labor Unions

y Globalization

y

Government Legislations


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y Minimum Wages Act, 1948

y Payment of Wages Act , 1936

y Employees Provident Fund Act , 1952

y Employees State Insurance Act, 1948

y Employees Pension Scheme, 1955

y

The Workmens Compensation Act,19

23y The Payment of Bonus Act , 1965

y Payment of Gratuity Act,1972


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