Compensation and Benefits
Compensation and Benefits
Compensation and Benefits
and Benefits
Rewards
Incentives
Things of value
Pay Surveys
Pay-for-knowledge
involves compensating
employees for learning
specific information.
Skill-based pay
rewards employees for
acquiring new skills.
Wage and Salary Administration
Wage and salary administration is the
ongoing process of managing a wage and
salary structure.
All managers must be sensitive to these
costs and must be vigilant about managing
them properly.
Issues in Compensation Management
Internal Equity Versus External Equity
Fixed Pay Versus Variable Pay
Performance Versus Membership
Job Versus Individual Pay
Elitism Versus Egalitarianism
Below Market Versus Above Market
Compensations
Monetary Versus Non-Monetary Rewards
Open Versus Secret Pay
Centralisation Versus Decentralisation of Pay
Decisions
Pay Secrecy
Job Analysis
Contents and Requirements of a job
Job Evaluation
Relative Value of Every Job
Wage Survey
Wage/salary levels prevailing in the region or
industry for similar jobs
Process of Wage Determination
Contd…
Developing Wage Structure
Legislation relating to Wages
Payments equal to, more or less than prevailing
wage rates
No and width of pay grades
Jobs to be placed in each grade
Provision for Merit Increases
Differentials between pay plan and
Dealing with wages/salaries that are not of line
with structure
Process of Wage Determination
Contd…
Most senior
executives receive
their compensation
in two forms:
1. Base salary
2. A form of incentive pay
(usually a bonus which
is based on company
performance)
Legal Issues in Compensation
The Minimum Wages Act includes
provisions for the minimum wage,
overtime, and child labor.
HR managers must
adhere to overtime
laws.
Wage Policy in India
Basic Wage
Minimum Wage
Sufficient to cover the bare physical needs of a
worker
Need Based Wage
The Standard working class family should be taken
to comprise 5 consumption units
2,700 calories of food, Clothing 80 yards, rent at the
cost of subsidized industrial housing scheme
Fuel etc at 20% of total min wage
Wage Policy in India
Fair Wage
Productivity of Labour
Prevailing Rates of Wages in the same or
similar occupations in the same region or
neighbouring regions
Level of National Income and its Distribution
The place of the industry in the economy of the
country
Employer’s capacity to pay
Wage Policy in India
Living Wage
Not only bare essentials
Frugal Comfort Living
Requirements of Social needs
Insurance including Old Age Requirements
State Regulations of Wages
The Minimum Wages Act, 1948
The Payment of Wages Act, 1936
The Equal Remuneration Act, 1976
Section 529-A of the Companies Act, 1956
The Industrial Disputes Act, 1947
Wage Boards
Pay Commissions
Wage Boards – Factors considered
Need Based Minimum Wages
Industry’s Capacity to Pay
Productivity of Labour
Prevailing Rates of Wages
Various Wage Legislation
Level of Income and its Distribution
Place of the Industry in the Economy
Requirements of Social Justice
Need to Provide Incentive for Improving
Productivity
Administration of Fringe Benefits
Assess Competitiveness