compensation concept and policies base and supplemetry

compensation

1. COMPENSATION- CONCEPT AND POLICIES, BASE AND SUPPLEMRNTARY UNDER GUIDANCE OF:- DR.RAVISH CHANDRA VERMA NAME:-ISHA KUMARI ROLL:-MGCU2021CMRC4005

2. COMPENSATION Compensation is defined as the total amount of the monetary and nonmonetary pay provided to an employee by an employer in return for work performed as required. It's a combination of the value of your pay, vacation, bonuses, health insurance, and any other perk you may receive, such as free lunches, free events, etc

3. Types of compensation: 1) Base compensation 2) Supplementary compensation

4. BASE It involves monetary benefit to the employees in the form of wages and salaries. It is giving the remuneration to the workers for doing the work. Wages are generally given to the workers based on hourly, daily, weekly or monthly basis. But salary is the compensation given to the office employees. Wages may be based on the number of units produced i.e. piece wage system or the time wage system i.e. the time spent on the job. But salary is always based on the time spent on the job. When it is difficult to judge the production of the company then the compensation is paid in form of salary

5. SUPPLEMENTARY Now days the organizations use supplementary compensation over and above the base compensation. It helps in satisfying the employees as well as retaining them for long time. It can be given in form of various services like housing, medical, educational facility. Supplementary compensation is also called fringe benefit as well as hidden payroll. The basic purpose of fringe benefit is to maintain efficient human resources in the organization and to motivate the employees.

6. Supplementary compensation is divided into following types: 1) Protection against hazards: supplementary compensation helps in protecting against the hazards of illness, injury, old age, death, permanent disability. 2) Employee services: some big organizations provide housing, low-cost loan, food, medical, and day care centre for children, educational facilities to their employees for their services. 3) Payment for time not worked: the employees are also paid for the time they are not working like wash up time, lunch period, vacations, holidays, sick leave etc. 4) Legal payments: payment under this category involves unemployment; layoff compensation, old age benefits etc.

7. Compensation Policy The compensation policy is the basic document, which drives the detail of the compensation practices in the organization. As the compensation strategy sets the high level compensation goals of the organization, the compensation policy describes the details of the individual compensation components, their behavior and their role in the compensation scheme of the organization.

8. What is important in the compensation policy? The compensation policy has to be transparent and it has to provide just the only way of the interpretation. It is extremely important, the employees and managers are not unsure about the compensation component and they understand clearly, what conditions are applied for the approval of the specific compensation component.

9. THANK YOU…..