Slide 1

Module 5Compensation and industrial disputes

Compensation is used to mean employees gross earnings in the form of financial rewards and benefits as part of employment relationship.

It is divided into 2 components

Direct compensation basic pay, overtime-pay, shift allowance, incentive, bonus, commissions.

Indirect compensation- provident fund, pension scheme, medical and health insurance and sick leave and various other benefits and perks.

Factors Affecting the Wage MixInternal FACTORSCompensation strategy of organization Worth of job Employees relative worth Employers ability to pay

EXTERNAL FACTORSConditions of the labor market Area wage rates Cost of living Collective bargaining Legal requirements

The compensation should be

AdequateEquitableBalancedCost effectiveSecureIncentive providingAcceptable to the employer

Non financial compensation system

Enhance Dignity and Satisfaction from work performed Enhance Physiological health, Intellectual growth and emotional maturity Promote constructive social relationships with co workers Design jobs that require adequate attention and effort Allocate sufficient resources to perform work assignments Grant sufficient control over the jobs to meet personal demands Offer supportive leadership and management

Whom to reward?

Individual employees Teams Organisation Outsiders

What to reward?Performance Organizational level Unit/Departmental level Speed and efficiency Loyalty Innovation Technical Solution Learning Good Behaviour Sense of humour Teaching PublicationsEvent management Social concern

Total reward system should include:

Direct financial Indirect financial Identification Work content Career Opportunities

New trends in Compensation Management:

Gift voucherDinner with the CEOQuality awardBest R &D technique awardSportsman of the year awardGood health awardLong service awardCreativity award

3 P Compensation Concept

Pay for Position Pay for PersonPay for Performance

A Grievance is a sign of employees discontent with the job and its nature.

Characteristics of Grievance:

FactualImaginary Disguised

Need for Grievance:

It will disturb the employeeThey may not be solved by the first time supervisors Check on the action of management Helps for employee grievance outlet

Causes of Grievance:demand for individual wageb. Complaints about incentive systemc. Complaints about job classification, against particular foreman and against disciplinary measuresd. Objections to general methods of supervisione. Promotionsf. Transfer of departments

Grievant EmployeeDepartment RepresentativesSupervisorForemanDepartmental RepresentativesHODGrievance CommitteeManagerCommittee of Union and Management RepresentativeVoluntary ArbitrationGRIEVANCE PROCEDURE