Compensation Management in Human Resource Management.pptx

compensation management

1. Compensation Management in Human Resource Management Prepared by: Md. Maruf hasan nahid

2. Introduction • Compensation management is a vital function of HRM. • It involves designing strategies to reward employees fairly and competitively. • Effective compensation attracts, retains, and motivates employees.

3. Definition and Meaning • Compensation management refers to planning and administering pay systems. • Includes monetary and non-monetary rewards. • Ensures equity, motivation, and legal compliance.

4. Objectives of Compensation Management • Attract and retain skilled employees. • Ensure internal and external equity. • Motivate employee performance. • Comply with labor laws and control costs.

5. Components of Compensation • Direct Compensation: Salary, bonuses, incentives. • Indirect Compensation: Insurance, retirement plans, paid leave. • Non-Financial Rewards: Recognition, career development, flexible work.

6. Importance of Compensation Management • Motivates employees and improves job satisfaction. • Reduces turnover and improves retention. • Ensures fairness and transparency. • Boosts productivity and organizational performance.

7. Factors Affecting Compensation • Internal Factors: Company policy, job evaluation, employee performance. • External Factors: Market trends, cost of living, labor laws. • Balancing both ensures fair and competitive compensation structures.

8. Process of Compensation Management 1. Job Analysis and Evaluation 2. Salary and Market Surveys 3. Designing Pay Structures 4. Implementation and Communication 5. Monitoring and Review

9. Modern Trends in Compensation Management • Performance-based and skill-based pay • Flexible benefits and wellness programs • Equity-based compensation such as stock options • Technology-driven compensation analytics

10. Conclusion • Compensation management motivates and retains employees. • Strategic pay systems support organizational success. • Regular review ensures competitiveness and equity. • Effective compensation fosters productivity and satisfaction.