Chapter 7: Compensation & Benefits

Group 2CW
Chapter 7: Compensation
Compensation System

Job Evaluation

Incentives System

Benefits Structure
 Case Study :Telecommunication Compensation System.
 Grameenphone, widely abbreviated as GP, is the
leading telecommunications service provider in
Bangladesh, with 82 million subscribers and
46.5% subscriber market share.
 It is a joint venture between Telenor and
Grameen Telecom Corporation.
American International Journal of Research in Humanities, Arts and Social
Sciences
 Robi Axiata Ltd. Also has a robust position in
telecommunication industry in Bangladesh.
 It’s the 2nd largest mobile network operator in
Bangladesh.
 It is a joint venture company between Axiata Group
and NTT DOCOMMO INC, Japan
Agenda
Name Topic

Ahmed Senosy  Introduction & Compensation System (From 1 to 6)

Mohamed Essam  Incentives system design (From 7 to 11)

Sherif Mounib  Comparison between the 2 companies Incentives System (12 &13)

Moamen Amin  Benefits Program design (From 14 to 17)

Magda Ahmed  Benefits types comparison between the 2 companies (18 to 21)

Sherif Mounib  Benefits Structure Evaluation (22 & 23)

Hassan Adel  Compensation System Evaluation & Conclusion

 Compensation System

 The 2 Companies offers a Compensation package that includes salary, a wide range of cash and non-cash
benefits and services:
 Monthly guaranteed cash and admissible variable components
 Yearly cash and non-cash benefits and long term/ deferred benefits
 Compensation System

 The compensation structure of the 2 companies is designed in such a manner that attracts, retains and
motivates qualified and skilled employees at all levels.

 The following factors are considered to reward and set a competitive compensation structure:

1. Market 2. Internally consistent and 3. Recognize individual performance and 4. To have a fair and
dynamics fair contribution transparent system
 Incentives System

Introduction
 Incentives programs are an increasingly popular mode of compensation in
today's business world.
 These programs, which are also sometimes referred to as "pay-for-
performance" or "at-risk" pay plans, provide some or all of a workforce's
compensation based on employee performance or on the performance of a
team.
 Variable pay proponents contend that providing tangible rewards for superior
performance encourages hard work and efficiency and serves as an effective
deterrent to mediocre or otherwise uninspired work performance.
 Incentives System

Advantages:
 The good bonus program should be to make the company stronger,
purpose of a more competitive, able to react quickly to change and
prosper through growth.
 Huge Motivation for Employees.
 Financially Self Supporting.
 More Loyalty to the Company.
 Reduced Staff Turnover.
 Strengthened Work Relationships.
 Incentives System

Criticism
 In a report published by the Institute of Management & Administration entitled ”Companies Are
Not Getting Full Value from Variable Pay Programs”
 Most criticisms of variable pay can be traced to concerns about the nature, implementation, and
execution of such programs rather than the theories upon which they are based.
 In practice, many companies fail to make variable pay programs meaningful to individual
employees, which in turn robs the program of much of its power to facilitate increased
productivity
 One of the key differentials between companies with a positive and those with a negative
experience with variable pay programs was the selection of appropriate performance measures.
 Those measures are the primary motivation for employees and they communicate to employees
what the objectives of the company are.
 Incentives System

Establishing an Incentives system

 Employees must have control over their performance. 
 Differences in performance must mean something to the business.
 Business goals must be clearly defined and adequately disseminated to employees,
and they should be arrived at with their assistance.
 Performance must be measured regularly and reliably.
 A clear system of performance appraisal and feedback must be put in place, with
regularly scheduled meetings as one component.
 Businesses should make sure that their variable pay plans reward employees for
actions or skills that actually further the aims of the company.
 Incentives System

Financial Non Financial

 Employee of the Month

 Bonus payments  Thank you mails,
 Annual incentives  Performance Feedback
 Individual incentive plans
 Cash profit-sharing plans
 Technical achievement awards;
 Small group incentives
 Payments for newly acquired skill and knowledge
 Gainsharing
 Incentives System

Grameenphone Robi Axiata

 Monthly / Annually Performance Bonus  Monthly / Annually Performance Bonus

 Overtime  Overtime
 Commission (Sales)  Commission (Sales)
 Profit sharing  Profit sharing
 Festival Bonus  Festival Bonus
 Recognition and achievement awards  Recognition and achievement awards
 Benefits Structure

Introduction
 In addition to direct compensation employers provide
employees with indirect compensation, commonly known as
benefits
 Benefit programs are designed to increase employees
retention and to promote loyalty.
 Employers also gain from benefit programs since they
promote the company brand name, help recruit and retain
good caliber and provide tax privileges.
 Benefits Structure

Design Employee Benefit Program

Step 1: Identify the Organization's Benefits Objectives and Budget

 Sample objective: 
To establish and maintain a competitive employee benefits program based
on employees' needs for paid time off and protection against the risks of
old age, loss of health and loss of life.
 Benefits Structure

Design Employee Benefit Program

Step 2: Conduct a Needs Assessment
 A needs assessment should be conducted to determine the best
benefits selection and design based on the needs and wants of the
employees.
 A benefit needs assessment is used to compare the employee needs
and existing set of benefits.

 The HR professional does a gap analysis to identify what the

organization’s benefits package should and should not include.
 Benefits Structure

Design Employee Benefit Program

Step 3: Formulate a Benefits Plan Program
 Once the benefits needs assessment process is completed, and benefits to be used are identified, the next
step is to combine them with the compensation structure to generate the final compensation and benefits
model.

 The benefit plans must address the needs of various categories of

employees on number of scales:
 Age
 Gender
 Marital status

 Types of benefits will vary, based upon employee lifestyle.

 Benefits Structure

Design Employee Benefit Program

Step 4: Communicate the Benefits Plan to Employees

Step 5: Develop a Periodic Evaluation Process to Determine Effectiveness of Benefits

The benefits program must be assessed on a regular basis
to determine if it is meeting the organization's objectives
and employees' needs
 Benefits Structure

Benefits Types
 There are a variety of benefit programs in the Egyptian local market.

• Paid Vacations
• Health & Life Insurance
• Legal Retirement Benefits/End of Service Benefits
• Car Allowance
• Company Cars
• Company Picnics or Social Events
• Flexible working hours
• Mobile Phone bill
• Gymnasium membership
• Iftar Ramadan
• Club Membership
 Benefits Structure
Grameenphone
 Health Plan
 Insurance
 Disability
 Employee transportation
 Mobile phone allowance
 Long service awards
 Children education allowance
 House Rent
 Medical allowance
 Holiday Allowance
Robi Axiata
 Soft furnishing
 Child Birth Gift
 Marriage gift
 Wedding Loan
 Meal Allowance
 Long Service Awards
 Medical allowance
 Holiday allowance
 Accommodation allowance
 Daily allowance for overseas travels etc.
 Benefits Structure

 Grameenphone provides several benefits to their employees

common with Robi;
 But Grameenphone provides children education allowance which
Robi still not introduced for their employee’s children.
 So spouse family income continuation is followed properly in this
case by Grameenphone.
 Grameenphone also enable employees for pay for time not worked
or paid vacation.
 Benefits Structure

 Robi is one step advance from Grameenphone Ltd.

 Robi arrange for their employee’s child birth gift during the birth of any employee’s child,
 Soft furnishing allowance,
 Marriage gift,
 Wedding loan to help their employees financially during their marriage time,
 Holiday allowance ,
 Meal allowance,
 Accommodation allowance,
 Daily allowance for overseas travels etc.
 These benefits packages makes Robi Compensation Package most competitive from others telecom
companies in Bangladesh
 Benefits Structure

 Robi, Grameenphone is superior to Promote Constructive Social Relationships with Coworkers and the people of
Bangladesh as well.
 Grameenphone defines Corporate Responsibility as an admiring combination of ethical and responsible corporate
behavior as well as creating value for the society and community at large by addressing the development needs of
the countries.
 Whereas Robi follows to Enhance Physiological Health, Intellectual Growth, and Emotional Maturity by safe
equipment, risk free work environment, avoidance of heat, cold and humidity, elimination of content with
radiation, carcinogens, other disease related materials; emotional strains etc.
 All Robi offices contains fire extinguishers and first aid box and Robi is in the brink of establishing a
comprehensive safety and security policy for safeguard of their employees and properties as well.
 Benefits Structure

 Grameenphone and Robi also follows some non-compensational process also to motivate their
employees:

Dimensions of benefits system

Offer Supportive Leadership and Promote Constructive Social

Management Relationships with Coworkers

Enhance Physiological Health, Intellectual Allocate Sufficient Resources to Perform

Growth Work Assignments
 Compensation System Evaluation

 The criteria shows that, Grameenphone and Robi-both follows the same process to compensate their
employees.
 Meanwhile, both company have a competitive compensation package and issue Bonus for their employee’s
on monthly and yearly basis.
 So the Pay for Work and Performance are almost same for both the company.
 Compensation System Evaluation

In view of the 2 company’s compensation system, both of them set their structure according to:
 Strategic objectives
 Unique characteristics and environment prevailing in the telecommunication industry,
 Both of them consider the below to determine an attractive compensation system:

Cash and non-cash benefits Competitiveness Performance based pay

Internal and external equity Consistency

 Compensation System

 From the study, it has been seen that Grameenphone and Robi follows more or less “The Eight Dimension
of Compensation”.

Dimensions of a compensation system

Pay for Work and Performance Deferred Income

Disability Income Continuation Health, Accident, Liability Protection

Pay for Time Not Worked Loss of Job Income Continuation

Spouse (Family) Income Continuation Income Equivalent Payment

 Conclusion

 Pay and benefits are extremely important to both new applicants and existing employees.
 The compensation received from work is a major reason that most people seek employment.
 Compensation not only provides a means of sustenance and allows people to satisfy their materialistic and
recreational needs, it also serves their ego or self-esteem needs.
 Consequently, if a firm's compensation system is viewed as inadequate, top applicants may reject that
company's employment offers, and current employees may choose to leave the organization considering so
many factors which needs to be cared off.
Thank You