Emerging problems in administering Management

Compensation Program

COMPENSATION &BENEFITS MANAGEMENT

MINI PROJECT

M MADHUSOODAN
MBA 2nd YEAR
Ph: 9884316138
madhusoodanmurali@gmail.com

Under the guidance of

Dr. K. Santhana Lakshmi
Assistant Professor
Ph:9894228738
Santhanalakshmi.k@smuniv.ac.in

SRM INSTITUTE OF SCIENCE AND TECHNOLOGY

Kattankulathur
 TABLE OF CONTENTS

• Abstract 1
• Keywords 1
• Introduction 2
• Review of Literature 2
• Concept &Meaning 2
• Percentage analysis 3
• Findings 11
• Conclusions 12
• References 13
ABSTRACT

This study shows that corporate purpose and the responses given by respondents.The analysis
has been made on the emerging problems in administering Management Compensation
Programme.This study shows that corporate purpose varies according to the nature of firm
ownership,compensation of CEO’s.The greater the pay gap between CEO’s and employees,the
lower the sense of corporate purpose within the organization.There are differences between the
employer and employees in many factors.In today’s tight job market,employers must focus on
how to attract and keep top talent.If employees are affected by the salary differentiation or low
compensation,then it may lead to many consequences.The questions where asked from the
companies perspective whether to disclose the employee compensation.

The pay disparity matters in different ways to firm employees,and creates a negative impact on
employee satisfaction.I had come up with analysis,findings and asked feedback/suggestions from
the respondents.The use of questionnaire was employed ro gather necessary data from the
respondents.

From the results of the study,it can be concluded that there is a significant relationship between
compensation management and employees performance,compensation management and
improved productivity.

KEYWORDS:

Compensation Philosophy,Pay Philosophy,Entitlement Philosophy ,Balanced

Compensation,Employee involvement,health and safety,Workmen’s
Compensation,Incentive,Internal equity,Internal parity,External parity,Employee retention.
INTRODUCTION:

Compensation management is a critical part of talent management and employee

retention.It uses financial and non-financial benefits to attract recruits,reduce turnover,boost
employee engagement.

A formal compensation administration program is an useful tool for ensuring employees

satisfaction with their pay and benefits,both internal and external equity.It is an important area in
HR Management because policies,programmes and their effective execution is essential to
procure,maintain and develop HR of the organization to get effective result from employees.

Problems would occur in the administration of managing the compensation programme if there is
no proper relationship between

MEANING:

Compensation Administration is a segment of management focusing on planning,organizing

and controlling the direct and indirect payments employees receive for the work they perform.

Compensation includes direct forms such as base,merit and incentive pay.

Indirect forms such as vacation pay,deferred payment and health insurance.

CONCEPT:

Concept of Compensation Administration is employees perform tasks for employers and so

companies pay employees wages for the jobs they do.

Compensation Administration model describes about the creation and management of a pay
system based on 4 factors.

1. INTERNAL CONSISTENCY
2. EXTERNAL COMPETITIVENESS
3. EMPLOYEE CONTRIBUTIONS
4. ADMINISTRATION OF THE COMPENSATION PROGRAM.
PERCENTAGE ANALYSIS:

I had prepared questionnaire on the topic and came up with good percentage of people based
on their given responses.From the total of 30 respondents I had come up with findings given by
their suggestions on how to solve the problems.

The following are the questions I had framed in my questionnaire.

• Performance management systems are designed to reward employees for achieving

target?
• There should be consistency in terms of pay between employees and peers.
• Employees leave the companies due to poor relationship with managers?
• Employee opinion surveys is important for administration?
• Compensation is judged by employees regarding the employer's competitive wages
• Employers who implement changes based on employee opinion are more likely to
experience higher retention rates.
• Internal Equity involves how a company values each job and how employees are
compensated.
• Problems with Internal equity can occur when employee's work doesn't match his pay
• Employee opinion survey concerning leadership effectiveness must be handled carefully
• Compensation Philosophy is important for Management?
• Incentive plans remain unchanged for long periods of time?
• Rewards philosophy has been developed, but not properly communicated to employees?
• Is switching of the department option is given to employees in companies?
FINDINGS:

I had come up with the findings and suggestions which has helped in making this research
successful.

1. Can be solved with practical case study by meeting the employees in the organization and
management can come up with solutions.

2. Current days loyalty is associated with compensation an employee gets. The truth is 'Fish rots
from its head'. Believe in regular trainings, stay-in interviews, 360 degrees appraisals and
sincerely practice exit interviews. A people's manager who is equally firm in conveying the
requirement for the office is more important. Those who practice micro-management will only
bring in a sense of fear and it can only soelly a doom.

3. Compensation has to be judged by employers with the discussion among their superiors and
they should decide based on the employees skills and performance.

4. Compensation is to motivate employee to do work,which results in organizational growth.

5. HR Management must address the problems regarding the compensation

6. More of employee engagement may help in getting the views, opinions and to know the need
of their employees.

7. Employees must be communicated and address their problems to their superiors regarding
compensation.

8.Regarding incentives its not consistent for an employee.It may vary from time to time.

9.Work culture is that an environment created by fellow employees.

Hawthorne Studies- Elton Mayo proved that people with effectiveness in leadership,Internal
consistency can succeed in an organization.

The human were considered as machines and they were working all the day.It has to be changed.

Each and every employee should be checked by his team manager once in three months at least
to know the pros and cons of working atmosphere. This will help employee to improve his
performance.

Also each and every employee must attend at least two training programs in a year and also he
should be given cross functional knowledge so that he can be shifted to the needy department in
case of sudden attrition in a team.

CASE STUDY EXAMPLE:

In Infosys,the group which is given targets and more time to execute the work.They would be
having flexibility,whereas,other group has no fixed time of work comfort and they would be
facing hectic schedule.The results are same for both the cases but there may be a difference in
compensation,time management and employee engagement.Also interchanging people groups
are there where most of the HR people are confused and overwhelmed about.

CONCLUSION:

The compensation management programmes are effective when employees are involved in their
work with involvement.They have to be given financial benefits as well as non-financial benefits
like rewards,encouragement,good work culture environment.The administration management has
to take good decisions and address the problems like employee’s pay which doesn’t match his
experience(if he is getting low salary),then he would be having problems with the management
and his opinions.So the HR Manager should be proper in managing the compensation benefits
and who implement changes based on employee opinion,can replace them in other department in
the organization in order to excel in cross functional departments in order to experience higher
retention rates and avoid attrition.

References:

John Vic,Compensation and Benefits Management,2001.

Compensation Management,Dipak Kumar Bhattacharya.

Harvard Business School

Scribd.com

Sage journal.com

Emeraldinsight.com