Challenges in

current
Compensation
Management

PRESENTED BY: TEAM NO-6

 What is compensation management ?
 Compensation management is designing and implementing total
compensation package with a systematic approach to providing value to
employees in exchange for work performance.

Compensation is a systematic approach to providing monetary value to

employees in exchange for work performed by them.

 Compensation managers responsible for working with employment data and

keeping up with complex benefits administration rules and regulations.

 Compensation management plays a large role in HR because it can impact

employee retention, the hiring process, company performance, and team
engagement.
OBJECTIVES To recruit and
01
retain qualified
employees.

02 To increase or
maintain morale.

03 To determine basic
wage and salary.

04
To reward for job
performance.
 PURPOSE OF COMPENSATION

Compensation may achieve several purposes assisting in recruitment, job

performance and job satisfaction.

It creates a base for happiness and satisfaction of the workforce that limits
the labor turnover and confers a stable organization.

It enhances the job evaluation process, which in return helps in setting up

more realistic and achievable standards.

There are four basic purpose of compensation:

1. Focusing your employees efforts
2. Attracting quality employees
3. Retaining top performers
4. Motivating your employees.
TYPES OF COMPENSATION
CURRENT
COMPENSATION PLANS
IN BUSINESS
Base pay (hourly or salary wages)
Sales commission
Overtime wages
Tip income
Bonus pay
Recognition or merit pay
Benefits ( insurances, standard
vacation policy, retirement)
Stock options
Other non-cash benefits
 Challenges in Compensation Management

External competition
Executive compensation
Internal equity
Gaps in employee expectations
Lack of digitization
Overcoming Challenges in Compensation
Management
A strong compensation strategy should be connected to business goals and
financial data so that a company can get a complete picture of its
effectiveness

When wrongly handled, it can cause a rift between employees and

management

Though these challenges may seems daunting, proper planning and diligent
efforts can help the organization overcome them.

The right tools will help the organization move beyond manual work and
transactions and focus on what’s important- motivating the employees and
building a great culture.
 Conclusion
We can say that good compensation
helps in increasing the productivity in
the firm.

Pay policies may differ from different

employers, some will focus on cash
compensation.

The employer’s main goal is to structure

the compensation and benefits programs
to attract and retain the right employees
needed to help the employer to be
competitive.