COMPENSATION MANAGEMENT

Harsheen Kaur
2K18/MBA/066
 Sources of Employment Law

Do Contracts of Employment have

to be in writing?
• Code of Obligations
• Labour Act
• Terms agreed in the contract of employment
 COMPENSATION BREAKUP

Compensation
•Basic Pay Variable Pay
Wages Bonuses
Salaries Incentives

Benefits
Total Health/ Medical Insurance Retirement
Life disability Insurance Educational Assistance
Rewards Paid Time off Work Life Support

Performance and Talent Management

Performance Appraisals Human Resource Development
•Goal Setting Career and Succession Planning
Training
 Factors determining Base Salary

• Job content is the most important determinant of base salary, with performance,
seniority and experience also factoring in.
• Seniority based pay is in use, but has been decreased in recent years.
• Previous salary is taken into account in the pay level of a new recruit.
 Interesting News

https://www.swissinfo.ch/eng/bloomberg/switzerland-rejects-world-s-highest-minimum-wage-of--25-per-
hour/38606686
Who earns how much?
 9,98,937

5,29,763

4,20,788

3,69,352

6,81,093

4,72,225

4,60,165

3,72,331

3,72,331

3,05,783

8,47,607

7,87,090
https://www.lohncomputer.ch/en/wages/
 POVERTY LEVEL?????
• The poverty level in Switzerland is defined as a monthly income of 2,300 CHF for singles, 3900 CHF for a
single mother/father with two children and 4,800 CHF for a couple with two children.

• All persons in Switzerland aged between 20 and living in a household whose monthly income after
deduction of social security and taxes is below the poverty level are considered as poor.
• People working at least one hour per week and living in a household with at least a full weekly workload

(i.e. all household members work together at least 36 hours per week) are called working poor.

• The working poor rate for all people living in Switzerland aged between 20 and 59 amounted in 2008 to

3. 598% corresponding to 118,000 persons.

Medical Benefits
Service provided by Doctor: Compulsory health insurance will
normally pay for all treatments carried out by a doctor

Complementary Medicine: Acupuncture, Anthroposophical

medicine, traditional Chinese Medicine pharmacotherapy,
homoeopathy, phytotherapy

In Hospital: You may choose your hospital from the hospital list
kept by the canton in which you live. If you choose to receive
treatment in a hospital that is not on the list of your canton of
residence, the costs for stay and treatment in the general ward will
be covered only upto amount that would be reimbursed for the
same treatment in a hospital on the list of your canton of residence
Maternity Insurance
• The compulsory health insurance pays CHF 150 towards the cost of individual or group antenatal classes run by
midwife or midwives association or towards the cost of a consultation with a midwife or midwives association.
• Birth: Your compulsory health insurance pays for the birth of your baby at home, in a hospital or a birth centre,
provided the latter two institutions are listed on the hospital list of your canton of residence (see page 6/7 on
hospitalisation). Care by a doctor or a midwife are included in the benefits
• Hospital care for your new born baby: The hospital and nursing costs incurred for a healthy new born baby
while its mother is still in hospital are part of the mother’s maternity benefits, i.e. they are covered by the
mother’s health insurance (there is no cost-sharing). However, if the baby becomes ill, the associated costs are
covered by the baby’s insurance (with cost sharing).
 Maternity Leave
Paternity Leave
• Employers must grant time-off to fathers with a new child, but this is limited to a
• Statutory leave is 14 weeks, starting on the day of delivery.
couple of days.
• It is obligatory to take eight weeks leave. In practice however, many collective agreements provide
• Therefor are statutory
16 weeks rights to longer paternity leave, but some collective
paid leave.
• Between
bargaining the 9th andprovide
agreements 16th week
forafter birth,
a right to women covered by
take paternity the Employment Act cannot be
leave.
compelled to return to work. However, only 14 weeks are covered for payment by the statutory
Maternity leave insurance.
• Employed women can be exempt from work before birth for medical and health reasons and in this
case, salary payment continues for a limited period, provided the employment relationship has
lasted for or was concluded no longer than 3 months prior, and that the employee has proved her
incapacity to work, which is usually done through a medical certificate.
 Sick Leave
• Employees who have worked for an employer more than 3 months are entitled to a
certain amount of paid sick leave (up to 3 weeks during the first year of employment).
• The longer an employee is employed by an employer, the greater their paid sick leave
entitlements.
• Paid sick leave entitlements vary between cantons. Employers are responsible to
cover the cost of paid sick leave, though many take out paid sick leave insurance to
cover this risk.
 Accident Insurance
• If you work at least 8 hours per week, you are insured through your employer against work-
related and non-work-related accidents under the Accident Insurance Law. If you have an
accident, this insurance will provide benefits.
• If you do not have compulsory accident insurance, you will need to take out accident
insurance with the company that provides your health insurance. This will increase your
insurance premium slightly. If you have an accident, your health insurance must then provide
the same benefits as it would if you were ill.
• The accident insurance that employees get through employer covers medical expenses and compensates
loss of income (80% of one’s salary).
 Unemployment Insurance
• All employees earning at least CHF 500 per month must contribute to an unemployment
insurance scheme.
• This insurance provides an income equal to a minimum of 70% of your salary (high salaries)
and a maximum of 80% of your salary after you become unemployed.
• The length of time during which you receive this compensation depends on how long you
were employed prior to being laid off.
 Social Security
• Social security (pillar 1a) provides a disability pension after paid sick leave and accident insurance
entitlements expire.
• Social security also provides a basic old-age pension when you reach retirement age and a basic pension
to your spouse or dependent children when you pass away.
• The pensions paid out are based on the size and number of contributions made.
• Employees and employers share the cost of old-age social security contributions.
THANKS…Any questions???