GROUP NO: 4

SONAM HARMALKAR -518

HINAL KOTHARI -523
PRIYA MITRA 527
MANSI PALVE -528
MANALI SHUKLA -549
BINAL FURIA -559

TYBBI - 2010-11
 TYBBI

ACADEMIC YEAR – 2010-11

 HRM IN
BANKING & INSURANCE

COMPENSATION
MANAGEMENT
 WHAT IS COMPENSATION/
WAGE ?
• Compensation/wage may be defined as money
received in performance of work and many kinds of
services and benefits that an organization provides to
their employees.

• Systematic approach of providing monetary value in

exchange of work performed.
IMPORTANCE OF WAGE PAYMENT
 TO THE EMPLOYEES/WORKERS
 Provides bread to the worker & his family.
 Changes their life welfare & social status.
 Demand higher wages through union.
 Changes attitude towards
employer/ management.
 TO THE EMPLOYER:
 Profit depends on wages paid.
 Moral & social responsibility to pay fair wages.
 Full co-operation from the employees.
 Earn profits by paying attractive wages.
 Reduction in labour problems
and disputes &
increases efficiency.
 TO THE GOVERNMENT:
 Industrial development, productivity &
industrial peace.
 Introduction of Minimum Wages Act.
 Wage rates of government servants are
revised from time to time.
 FACTORS AFFECTING WAGE/SALARY LEVELS

UNION REMUNERATI
GOVERNMEN FIRM’S
PRESSURE PRODUCTIVIT COST OF ON IN
T ABILITY TO
AND Y LIVING COMPARABLE
LEGISLATIONS PAY
STRATEGIES INDUSTRIES
 OBJECTIVE OF WAGE AND
SALARY ADMINISTRATION
1. Acquire qualified competent Personnel.
2. Retain the present employees
3. Secure internal and external equity.
4. Ensure desired behaviour.
5. Keep labour and administrative cost in line.
6. Promote organization feasibility.
WAGE DETERMINATION PROCESS
JOB ANALYSIS

JOB EVALUATION

CONDUCT THE SALARY SURVEY

GROUPING OF SIMILAR JOB INTO SIMILAR GRADES

(PAY GRADE)

PREPARATION OF WAGE STRUCTURE

DEVELOPING PAY RANGEWAGE ADMINISTRATION RULES

METHODS OF WAGE FIXATION
LEGISLATION

WAGE BOARDS

PAY COMMISSION

JOB EVALUATION

COLLECTIVE BARGAINING

ARBITRATION AND
ADJUDICATION
 INCENTIVES
 Wage Incentive is also called as
“Payment by Results”

 Attracts workers and motivates them to

work.

Incentive payments is based on either

Individual output or Group Output
ESSENTIALS OF SOUND WAGE SYSTEM

It should be just and reasonable.

Guarantee of living wage.
Simplicity.
Flexibility.
Promptness.
Gradual increase.
Equal pay for equal work.
Periodical review.
 COMPONENTS OF EMPLOYEE REMUNERATION

NON-
WAGE/ FRINGE
SALARY BENEFITS INCENTIVES PERQUISITES MONETARY
BENEFITS
SYSTEMS OF WAGE PAYMENT
1. TIME RATE SYSTEM
 In this method wages are paid as per time spent
by worker in the factory.

2. PIECE RATE SYSTEM

 In this method, wages are paid as per the output
or production given by the worker and not as per
the time spent by the worker in factory.
BENEFITS OF INCENTIVE PLANS
 Beneficial to both employer and employees.
Helps attract and retain employees.
Reduce employee absenteeism and turnover.
Motivates employee to work more..
Higher performance Higher
Rewards.
 FRINGE BENEFITS
 It is defined as wide range of benefits and
services that employees receive as an integral
part of their total compensation package.

 They are supplements to regular wages

received by workers.
NEED FOR FRINGE BENEFITS
 Employee demands.
 Trade Union demands.
 Employers’ preference
 As social security.
 To improve human relations.
 To develop good corporate image.
 To motivate employees &
boost their morale.
 Types of Fringe Benefits
Welfare
Payment for Time Employee Safety & Recreational Old age &
not Worked Security Health Facilities Retirement
Canteens benefits
Retrenchment Safety
Hours Measures Consumer Societies Provident
of Work Compensation Fund
Workmen’s Credit Societies
Lay-off Deposit
Paid Compensation Linked Ins.
Compensation Housing
Holidays
Health Legal Aid Gratuity
Shift Benefits
Premium Employee Medical
Counseling Benefit
Holiday
Pay Welfare Org.
Pension
Holiday Homes
Paid
Vacation Education Facilities

Transportation

Parties & Picnics

Miscellaneous
 FEATURES OF GOOD
FRINGE BENEFITS
• It should be provided for genuine well-being
of employees.
• It should be based on practical realities.
• Administration should be simple,
direct & quick.
• It should be fixed after consulting
the union & employees.
 ADVANTAGES
 Support employee remuneration.
 Raise employee efficiency and productivity.
 Add attraction
 Raise moral.
 Develop corporate image.
 Act as motivation.
 FRINGE BENEFITS IN INDIA
1. EMPLOYEE SECURITY
2. WORKMEN’S COMPENSATION
3. SAFETY & HEALTH BENEFITS.
4. OLD AGE BENEFITS.
• Provident Fund Act
• The Payment Of Gratuity Act
5. MEDICAL BENEFITS.
• The Maternity Benefit Act, 1961
6. WELFARE & RECREATIONAL FACILITY
7. PAYMENT FOR TIME NOT WORKED.
• Hours of work
• Paid holidays
• Shift premium
• Paid vacation.
 BIBLIOGRAPHY
BOOKS
Compensation Management –
Dr. Kanchan Bhatia.

Human Resource &

personnel Management – K.
Ashwatthapa.

 Essentials of HRM
&Industrial Relations –
P.Subbharao.