Types of compensation

this slide give a detail account on compensation and it;s type's

1. MEMBERS Zafarullah khan 03-135161-031 Syed tayyab sagheer 03-135161-028 Furqan 03-135161-010

2. Types of Compensation that a firms offers

3. Compensation?

4. The Importance of Compensation Impacts an employer’s ability to attract and retain employees . Ensure optimal levels of employee performance in meeting the organization’s strategic objectives . Compensation’s components Direct compensation in the form of wages or salary Indirect compensation in the form of benefits

5. Theory Behind Compensation Equity Theory Comparing inputs and outputs of a similar co-worker Perceived inequity affects employee effort Expectancy Theory People are motivated by intrinsic and extrinsic outcomes they desire. People will only be motivated if outcome is possible. People will only be motivated if outcome is contingent.

6. Equity Theory Internal equity Comparison of my input or reward ratio with that of similar others. Employees may seek to address imbalance by changing their inputs. Fairness of pay differentials between different jobs in the organization can be established by job ranking, job classification, point systems and factor comparisons. External equity Fairness of organizational compensation levels relative to similar jobs in other organizations.

7. Monkeys Demand Equal Pay A recent study shows brown capuchin monkeys refused to play along when they saw another monkey get a better payoff for performing the same work. The monkeys were trained to trade a granite token for a piece of cumber. When the reward was the same for both monkeys, they took the cucumber 95 percent of the time. But it was a different story when one monkey was given something better -- namely, a grape. Then, the other monkey often pitched a fit -- either throwing the token, refusing to eat the cucumber or giving it to the other monkey. Associated Press 2003

8. Types of Compensation

9. Direct compensation Direct compensation includes basic annual salaries or hourly wages paid to workers in return for their services to the company account…..

10. 1-Salary….

11. 2-Wage

12. 3-Base Pay Base pay  is the initial rate of compensation an employee receives in exchange for services. It excludes extra lump sum compensation such as bonuses or overtime pay , as well as benefits and raises. An employee's  base pay  can be expressed as an hourly rate or as a weekly, monthly or annual  salary .

13. 4-Merit Pay It provides bonuses for workers who perform their jobs effectively, according to easily measurable criteria

14. 5-Incentive Pay Bonus Commission Piece Rate Profit Sharing Stock Opinion Shift Differential

15. 6-Deferred Pay Saving Plan Stock Purchase Annuity

16. Indirect Compensation Non-monetary remuneration provided to employees, including annual leave, overtime allowance, health insurance, life assurance, company car and mobile and pension funds.

17. 1-Protection Program Medical Insurance Life Insurance Disability income Pension Social Security

18. 2-Pay for Time not worked Vacations Holidays Sick leave Jury Duty

19. 3-Services & Perquisites Recreational Facility Car Financial Planning Low-cost or f ree meal

20. Wipro Flexible benefits Medical assistance plan and medical claim benefits Group life insurance program and employee deposit linked insurance program kids@wipro (fun way of learning)