Scribd Logo
Upload

Welcome to Scribd!

  • 2 views

    hrm unit 4

    Uploaded by

    anandkumar209478
    Jjj

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content

    You might also like

    hrm unit 4

    Uploaded by

    anandkumar209478
    2 views52 pages
    Jjj

    Copyright

    © © All Rights Reserved

    Available Formats

    PDF or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    Jjj

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    Download as pdf
    2 views52 pages

    hrm unit 4

    Uploaded by

    anandkumar209478
    Jjj

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
    Flag for inappropriate content
    Download as pdf
    of 52
    Compensation e refers to as a wide range of financial and non-financial rewards given to employees for their services rendered to the organization, id in the form of wages salaries and employee benefits such paid vacation, insurance, maternity leave, free traveling facility, retirement benefits, etc. Objectives / Function Attracting High Skilled Employee Improv iciency Establish Equity Increase worker Efficiency Avoid Conflicts Legal Compliance Encourage Healthy Competition Retaining Employees Components of Compensation Basic Salary (varies with seniority and rank) Incentives Bonus Employees Benefits (Fringe Benefits) Health benefits, Retirement Benefits (Gratuity, Pension, Security etc.) PF Overtime Pay Allowances DA, HRA, TA, Children Education Allowances, Medical Allownaces, City Compensatory allowance ete. Pay Structure e Pay or salary is fixed compensation e Periodically paid for work done e It shows the breakup of the salary into various components Normally Pay Structure includes Basic Pay + Allowance + Fringe Benefits + Incentives Pay Structure Components of Pay Structure e Basic Pay/Salary amount of mancy that an eraployce receives prior to any extras being added or payments deducted e@ DA (Dearness Allowance) . to offset the impact of inflation is % of original salary e@ HRA (House Rent Allowance) To meet the cost of rented house, Exemption is given in FT Act, e@ Gross Pay individuat’s total earnings throughout a given period before any deductions are made e@ Take Home Pay (Net Salary) e@ Other Components like TA, Bonus, Incentives Method of Payments @ Time Rate System © wages are paid in terms of time spent, it decrease the morale of efficient ones. © Time Spent (Attendance) * Wage Rate Per hour/Day/Week/Month e Piece Rate System © wages are paid to a worker on the basis of output produced by him without considering the time taken in performing the work. © Output * Piece Rate ADVANTAGES of TIME RATE SYSTEM : 1] Simple to understand and easy to operate. 2) Provides regular and stable income to the workers. 3] Greater Care and attention to quality and workmanship. 4) Beneficial to average and below-average workers. 5] Ensures quality assurance to workers. DISADVANTAGES of TIME RATE SYSTEM : 1] No incentive for efficient workers. 2) Does not encourage initiative. 3] Production may decrease. 4] Requires close supervision. 5] Labour cost may rise due to decrease in productivity. Advantages- a) b) ¢) qd) e) f) Incentives to efficient worker. Increase in production. Lower cost Equitable Decrease in supervision Simple and easy, Any Fringe Benefits benefit you offer employees in exchange for their services (not including salary) is a fringe benefit are additions to compensation that companies give their employees. any non wage payment or benefit CB. ° like a company car, pension plans, profit-sharing programs, vacation pay, and company-paid life, health, and unemployment insurance programs granted to employees by employers. ‘Types of Fringe Benefits Paymert for Time Employee Safety and——Welfare recreational ot porkod security health facilities Hours of Paid Slit Holiday Paid work holidays premium — pay vacation] Retrenchment Layoff compensation compensation Sdoty ‘Workmen's Health measures componsation benefits t T T T i T T T T T T 7 Canteens Consumer Credit Housing Legal ad Employee — Wel Holday Educational Trans- Partes & Misce- societies societies counselling organi lons homes facilites portation picnic Haneous Provident fund Deposit inked insurance Allowance amount of something that is allowed, especially within a set of rules and regulations or for a specified purpose. © Dearness Allowance ~ This allowance is given to protect real income of an employee against price rise. Dearness allowance (DA) is paid as a percentage of basic pay. © House Rent Allowance — Companies who do not provide living accommodation to their employees pay house rent allowance (HRA) to employees. © City Compensatory Allowance ~ This allowance is paid basically to employees in metros and other big cities where cost of living is comparatively more. City compensatory allowance (CCA) is normally a fixed amount per month, like 30 percent of basic pay in case of government employees. e@ Transport Allowance/Conveyance Allowance ~ Some companies pay transport allowance (TA) that accommodates travel from the employce’s house to the office. A fixed amount is paid every month to cover a part of traveling expenses. Wage and Pay commissions Pay Commission is set up by Government of India, Gives its recommendations regarding changes in salary structure of its employees set up in 1947, Since India’s Independence, 7 pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India. Headquartered in Delhi(India) , the commission is given 18 months from date of its constitution to make its recommendations. Minimum wages Act- 1948 An Act of Parliament concerning Indian labour law sets the minimum wages that must be paid to skilled and unskilled labours. Empowers the Central and state government to fix minimum wages time to time. The act provides fixing wage rate (tim employment that has at least 1000 workers. OBJECTIVE » To provide minimum wages to the workers working in organized sector » To stop exploitation of the workers » To empower the government to take steps for fixing minimum wages and to revising it in a timely manner » To apply this law on most of the sections in organized sector (scheduled employment) , piece, guaranteed time, over time) for any ‘Wage e a fixed regular payment earned for work or services, typically paid on a daily or weckly basis. o Minimum Wage © Fair Wage (More than Minimum wage, secing present market rate) © Living Wage (More than fair wage, for Luxurious life) Equal Remuneration Act-1976 e An Act to provide for the payment of equal remuneration to men and women workers e and for the prevention of discrimination, on the ground of Gender, against women in the matter of employment and for matters connected therewith Objectives of the act The equal remuneration act,1976 aims : 1. 2. To pay equal remuneration to men and women workers. To prevent discrimination, on the grounds of sex, against women in the matter of employment. To provide increasing opportunity to women. To set-up advisory committees to promote employment opportunities for women. WHAT IS COMPENSATION? salar. inistrati ———— anagement, or reward management. \h _uetd management * Compensation is the human resource | management function that deals_with every eeard ni nneotine mate eee | an organizational task. | —. . * Compensation is a seoleyece receive in exchange for their work. ° According to people for work”? * Compensation management, also known as wage and. | uv OBJECTIVES OF COMPENSATION MANAGEMENT YS 44 td + Acquiring qualified and skilled employees. * Retaining current employees + Motivating and rewarding g work ]_~- * Maintaining and controlling costs: ho? pay level positions must be met net by the compensation system (EgGitable} Care should be taken so that each employee ispaid’ {~ green line with his/her abilities, efforts, , education, training, ( enn ences, competencies, and ,and so on. SO On.” Sécurer Employees security needs must be as coveréd (epi compen the ¢ compensation package. Cost-Effective? Pay must be snares “considering what an organisation can afford to a ee, aan a . ee employees undefalas pay system well and accept it. “e (WS ] External Factors —\La . Demand and ind and supply going 3 rate pay syste Pay system ] External Factors\— Cost of Living * Every year theres rab iniaon Me té that must be considered while designing compensation pacl =@— ae * Company don’t disturb t! * Arise in the cost of living is t to be compensated b d{ dearness-allowanice, AX =o Lag j External Factors C Labour Unions > * The presence or absence Qf Tabor organizations pften determine the quantum of wages paid mployee: = company. eee “Employers th rhancunionized factoties Eni se. Because of large-sc ployment, these y employers hire workers af‘(ittl ven lessthan legatminimum wages. * The employees of (5 rongly unionized_cdmpanies too, have no freedom in wage and, s ion. They are forced to yield to the press F Tab ressure of labour repr itatives in determining and revising pay scales, — ee Oe * Some oj} SR CRT Wace ae ene central laws which have a bearing on employee remuneration are thas of Wes At 1236 Minirrtm Wages Act, 1948; the Paymet f_Bonus Equal Remuneration Act, 1976; and the Payment of Gratuity i 3 Zz a * All these Agt/guide and_control the ° The “Supreme Court Yrom its very inception, has had Cadjudicate) ad _dispuites-particularly disputes relating to wages and allied problems of financial wer to eee workers, e\\s As 2 eva We compensation need to be on See a ut KA * While if the economy is going throug ession, then most of the origination revise tl eir compensation structure — \ 1 * There cowld p aco’ the employees fee i stress on their a = ] Internal Factors — Factors Affecting Employee Pete eater) | Internal Factors Lee Tea loca Labor Market Going Rate Productivity Business Strateg Job Evaluation and = Cost of Living ~\ Performance Appraisall oo union Employee Labor Laws ————— j Internal Factors -\Ability to Pay )}—2 —) * The prosperous or Ge companies: an pay higher fompensation-as compared tothe competing fin 1s 7 @® frAysiy * Howeverssmaller companies \5 — Sompanies generally don’t have huge funds and that’s why they can’t afford to pay as per the industry standards. > —— = ln the ( aBBrEsive Jand compete with the geste need skilled workforce and for that the iey have to pay-a-high 5 * Whereas, if the company wants to(go smooth fad is managing with the available workers, will give relatively leSs pay or equivalent to what others are paying * The job evaluatios n includes the evaluatio to understand th Nn eéch and every job @ Necessan y skills, abilities, and Nowledge “If the job require hig n level of skills then ‘Ou competitors and the industry. * Performance Appraisal helps and reward the employee: * If the perfo pay higher to retain the talent- Or Me in analyzing the Performance of t! 'S accordingly. (SSeztemeuon and Performance Ap raisal &t every level forthe jab — have to pay little higher th INE 10 pay little higher than the he employees ne employees , 1 is extraordinary then compan u j Internal Factors — Employee: Oo Gar Eompensationn one of the following ways. © Fetomane better perf fetches more pay to the employee, Jand thus Wi a ereased compensation, they get motivated and perform their oes As the Thployeg EVOTESTIS VERT) yee devotes his years in) he one, xpects to “=getatrincreased pay for his experience. _[ Potential { Potential} The ere ee it getg Therefore, a companies do pay extra to the em do pay extra to the 1e employees t te better oe as gs

    You might also like