Compensation Benefits and diffrent kind of compensation plans

the job evaluation approach to compensation management enables organizations to create a systematic, transparent, and equitable pay structure by evaluating the relative worth of different jobs. This helps align compensation with organizational goals and ensures fairness across roles.

1. Compensation Planning

2. Compensation Planning Refers to a wide range of financial and non-financial rewards given to employees for their services rendered to the organisation. It is paid in the form of wages, salary, and employee benefits such as paid vacation, insurance, maternity leave, free travelling facility, retirement benefits etc.

3. Objectives/Function Attracting high skilled employee Improves efficiency Establish equity Increase worker efficiency Avoid conflicts Legal compliance Encourage healthy competition Retaining employees

4. 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 Allowance, Medical Allowance, City Compensatory allowance etc.

5. Pay Structure Pay or salary is fixed compensation Periodic paid for work done It shows the breakup of the salary into various components Normally Pay Structure includes Basic Pay + Allowance + Fringe Benefits + Incentives

6. Pay Structure Components of Pay Structure Basic Pay/Salary Amount of money that an employee receives prior to any extra added or payment deducted DA (Dearness Allowance) To offset the impact of inflation Is % of original salary HRA (House Rent Allowance) To mean the cost of rented house. Exemption is given in IT Act.

7. Pay Structure Gross Pay Individual’s total earnings throughout a given period before any deductions are made. Take Home Pay (Net Salary) Other Components like TA, Bonus, Incentives

8. Method of Payment 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 Piece Rate System Wages are paid to a worker on the basis of output produced by him without considering the time taken by performing the work. Output x Piece Rate

9. Advantages and Disadvantages of Time Rate System Advantages Simple to understand and easy to operate Provide regular and stable income to the workers. Greater Care and attention to quality and workmanship Beneficial to average and below average workers, Ensuring quality assurance to workers. Disadvantages No incentive for efficient workers Does not encourage initiative Production may decrease Requires close supervision Labour cost may rise due to decrease in productivity

10. Advantages of Piece Rate System Advantages Incentive to efficient worker Increase in production Lower cost Equitable Decrease in supervision Simple and easy

11. Fringe Benefits Any benefit you offer employees in exchange for their services (not including salary) is a fringe benefits Are addition to compensation that companies gives their employees. Any non wage payment or benefit Eg : Like a company car pension plans profit sharing programs. Vacation Pay and companyt paid life, health and unemployment insurance programs granted to employees by employers.

12. Type of Fringe Benefits There is 5 kinds of Fringe benefits : 1) Payment for Time not workrd : a) House of work b) Paid holidays c) Shift premium d) Holiday Pay e) Paid vacations 2)Employee Security a) Retrenchment compensation b) Layoff compensation 3)Safety and Health a) Safety measures b)Women’s compensation c)Health benefits

13. Type of Fringe Benefits 5) Old age and retirement benefits Provident fund Deposit linked insurance Gratuity Medical benefits Pension

14. 14 Thank you