MANAGEMENT DEVELOPMENT INSTITUTE, GURGAON

Part-time PGPM
(April-2008 and October 2008)
Management Development Institute
Elective Course
Compensation Management

COURSE OFFERED BY:

Tanuja Sharma
Room no.-C-6
Contact No: MDI Phone nos., Office Extn: 304,
0124-4560304 (D)
Emails-tanujasharma@mdi.ac.in

COURSE OBJECTIVES:

It matters what you pay for and it matters how you pay. Both these challenges have been crucial in
today’s business world. Companies have recognized the fact that to attract, retain, reward, and motivate
the employees, a sound understanding and designing of Compensation Management is a must in todays’
strategically managed Global world. In addition these need to be easily communicated and understood
by organization members, be cost effective, and need to be unbiased and objective.

The course on Compensation Management will help in understanding, appreciating, internalizing and
implementing the major challenges in this field.

The Course aims at orienting and exposing students to

• Concept and components of fundamental compensation tools.

• The pay system strategies and Pay Model for internal equity.
• Benchmark to appropriate/comparable “markets”, i.e. external equity.
• Reconcile internal and external equity for “job slotting” in new pay range
• Pay for performance & Benefit options.
• Emerging trends in compensation

METHODOLOGY FOR SESSIONS

An experiential exercise has been planned to begin the session. Aim is to develop conceptual clarity of
Compensation Management. In addition various methods to be used are
• Active discussions in the class
• Class room cases for analytical sharpening.
• Real life case presentation by Industry Invitees.
• Class room presentations by students (Individual/ Groups) for skill building.
• Best Practices White Paper/ Project Report.

1
The evaluation components with their weightages would consist of the following:

 Quiz (two) 10 marks

 Class presentations (Individual/ Group Presentations) 10 marks
 White Paper/ Project Report (Group work) 15 marks
 Midterm 25 marks
 End Term Exam 40 marks

Broad Course Outline and session Plan

Day Topic Method

1 An Introduction to Compensation An experiential exercise – for
Compensation management, Philosophy & understanding and concept clarity.
Policy.

2 Components of Compensation System. Case: Compensation Management

Readings: Chapter-1 ((Milkovich & Newman- and Workforce Diversity.
Indian edition)
Class presentation
Quiz 1
3 Compensation Strategy and Objectives. Case: HBR
Total Compensation Model – Strategic
Perspectives, Pay model. Rated assignment-Article
Integration with business. presentations

Readings: Chapter-2 ((Milkovich & Newman- Quiz 2

Indian edition)

4 Job Evaluation Methods Case based exercise on Job

Analysis and Job Evaluation
Readings: Chapter-4 &5 ((Milkovich &
Newman-Indian edition)

5 Class presentations based on book topics Rated assignment

Part Five & Part Six (Milkovich & Newman-
Indian edition)
Mid Term (Written exam) Weightage-25%
6 Market Pricing & Compensation Benchmarking Salary surveys.
Compensation surveys, Source of data
Collection, process of carrying out surveys, Guest lecture by expert from
Job Pricing, Compensation Levels. Hewitt
Readings: Chapter-7 ((Milkovich & Newman-

2
 Indian edition)
7 Designing the Compensation Programme Real life cases
Pay levels, Pay Structures and Pay systems.
Pay ranges and Bands. Quiz-3

Readings: Chapter-8 & Appendix –B, 263-265

(Milkovich, 8th Edition).
Developing Pay Structures, Pay Curve, Pricing
Jobs, Treating Anomalies. Wage structure, Pay
Grades, Pay adjustment Matrix. Broadbanding.

Readings: Page 217-239 of the book Reward

Management.
8 Pay for Performance, Rewarding –performance, HBR case
psychological theories related to rewards. Quiz-4

Readings: Part 3 &4, Milkovich, 8th Edition

9 Challenges to Pay for Performance, Merit pay, Class discussion &
Incentive pay etc. Guest speaker.
Employee Benefits, Key Issues, Benefit
planning, designing and administration,
administering Benefits. Benefit Options.
10 White Paper/project report presentation Weightage -15%

End Term (Written exam) Weightage-40%

Recommended Reading: Compensation (9th edition) By Milkovich, Newman& Venkata Ratnam.

, Tata McGraw Hill Publishing company., New Delhi.

Suggested readings :
1. Armstrong,M and Murlis,H (1998) Reward Management,A handbook of Remuneration Strategy
and Practice,4th edition Kogan Page Ltd./IPM,London,Published in association with Hay
Management Consultants.

2. Bergmann, Thomas, J. & Scarpello, Vida G. (2002) Compensation Decision Making,4th

Edition,South-Western.

3. Henderson, Richard I. (2006) Compensation Management in a Knowledge-Based World, 9th

edition,Prentice Hall, (Indian Edition-Pearson Education).

4. Martocchio Joseph J.Strategic (2006). Compensation-A Human Resource Management

Approach, 3rd Edition, Pearson Education.

5. John Stredwick (1997), Cases in Reward Management, Kogan Page Ltd.London

6. Desslar Gary (2000) Human Resource Management, 8th Edition, Pearson Education, Asia.