Employee Compensation

Employee compensation refers to all forms of pay or rewards going to employees and arising
from their employment. It has two main components:
1. Direct financial payments: Wages, salaries, incentives, commissions, and bonuses.
There are two ways to pay directly:

o Time based pay: Daily, hourly, weekly, biweekly or monthly wages and salaries

o Performance based pay: Ties compensation directly to the amount of product the
worker generates.

2. Direct payments: Financial benefits like employer-paid insurance

Factors influencing the design of compensation plan

o Legal considerations in compensation

o Union influences on compensation decisions

o Corporate policies and competitive strategy

o Policy issues affecting the plan of an organization

Establishing Pay Rates

Step-1
The Salary Survey: A survey aimed at determining prevailing wage rates. A good salary survey
provides specific wage rates for specific jobs. Formal written questionnaire surveys are the most
comprehensive, but telephone surveys and newspaper ads are also sources of information.

Step-2
Job Evaluation: A systematic comparison done in order to determine the worth of one job
relative to another. Job Evaluation method includes:

1. Ranking: Involves ranking each job relative to all other jobs, usually based on overall
difficulty. There are several steps in this method:

o Obtain job information for each job

o Rank jobs by department or in clusters

o Select just one compensable factor

o Rank jobs

o Combine ratings
2. Job Classification: Categorize jobs into groups

3. Point Method: A number of compensable factors are identified and then the degree to which
each of these factors is present on the job is determined.

4. Factor comparison: Ranking jobs according to a variety of skill and difficulty factors, and
then adding up these rankings to arrive at an overall numerical rating for each given job.

Step-3
Group Similar Jobs into Pay Grades: A pay grade is comprised of jobs of approximately equal
difficulty.
Step-4
Price each Pay Grade-Wage Curves: This curve shows the relationship between the value of
the job and the average wage paid for this job.

Step-5
Fine-Tune Pay Rates: A series of steps or levels within as pay grade usually based upon years
of service.

Benefits
Indirect financial and non-financial payments employees receive for continuing their
employment with the company.
There are several types of benefits:
o Supplemental Pay Benefits

o Insurance Benefits

o Vacations and Holidays

o Sick Leave

o Parental Leave and Family Leave

o Medical Leave

o Retirement Benefits

Structure of BATB
BATB is a public limited company. Management Director is the operational head and appointed
by the British American Tobacco. Head of every department carries out their functions with the
help of line managers. Different departments have different structure according to their function
and responsibility.

The Board of Directors and Executive Committee (ExCo) govern the overall activities of the
company. The Board of Directors is composed of 7 members who are called Directors. The
Chairman heads the Board of Directors. Chief Executive of British American Tobacco
Bangladesh is called the Managing Director, who is normally appointed by BAT Holdings.
Managing Director of the company is the chairperson of the Executive Committee. This
committee includes the head of all the functional departments.
Conclusion:
British American Tobacco is one of the reputed multinational companies in Bangladesh. They
have continued their business with good reputation. As a leading company in cement industry
they always try to maintain the highest quality of their products. Their human resource
department is strong & treats their employees as an asset. BAT has already earned reputation as a
very potential Multinational Company of the country. This has been possible due to skilled
manpower, which has been developed by taking proper recruitment and selection strategies and
giving sufficient training and development opportunities and also retaining their employee
through providing adequate compensation and benefit. We write in no uncertain term that BAT
is functioning very well and we hope that it will continue its operations and will become the
trendsetter of the Human Resource Management practices of Bangladesh.