A

SUMMER TRANING REPORT

ON

COMPENSATION MANAGEMENT
HANDFAB A LIVING (PANIPAT)

(SUBMITTED IN THE PARTIAL FULFILLMENT FOR THE DEGREE

OF
BACHELOR OF BUSINESS ADMINISTRATION

(SESSION)
SUBMITTED TO: MISS NISHA GUPTA SUBMITED BY:
ASHIMA JUNEJA B.B.A. III YEAR CLASS ROLL No. 7872 UNIVERSITY ROLL No..

I.B.(P.G.) COLLEGE AFFILIATED BY KURUKSHETRA UNIVERSITY, KURUKSHETRA

DECLARATION
I ASHIMA JUNEJA student of B.B.A. III year in I.B.(P.G.) College, Panipat hereby declare that the project report entitled

COMPENSATION

MANAGEMENT HANDFAB A LIVING submitted for the degree of B.B.A. III year is my
original work and the project report has not formed the basis for the award of any diploma, degree, associate ship, fellowship or similar other titles. It has not been submitted to any other university or institution for the award of any degree or diploma.

ASHIMA JUNEJA

ACKNOWLEDGEMENT
Survey is an excellent tool for learning and exploration. No classroom routine can substitute which is possible while working in real situations. Application of theoretical knowledge to practical situations is the bonanzas of this survey. Without a proper combination of inspection and perspiration, its not easy to achieve anything. There is always a sense of gratitude, which we express to others for the help and the needy services they render during the different phases of our lives. I too would like to do it as I really wish to express my gratitude toward all those who have been helpful to me directly or indirectly during the development of this project. I would like to thank my professor MISS.NISHA GUPTA who was always there to help and guide me when I needed help. Her perceptive criticism kept me working to make this project more full proof. I am thankful to her for his encouraging and valuable support. Working under her was an extremely knowledgeable and enriching experience for me. I am very thankful to her for all the value addition and enhancement done to me. No words can adequately express my overriding debt of gratitude to my parents whose support helps me in all the way. Above all I shall thank my friends who constantly encouraged and blessed me so as to enable me to do this work successfully.

ASHIMA JUNEJA

INDEX OF CONTENTS
INTRODUCTION TO THE INDUSTRY 1.0) INDUSTRY PROFILE

1.1) CARPET MANUFACTURERS IN INDIA 1.2) CARPET MANUFCTURING PROCESS 1.3) SWOT ANALYSIS OF CARPET INDUSTRY 1.4) OPORTUNITIES: TOPIC 2 INTRODUCTION TO THE COMPANY 2.0) INTRODUCTION TO HANDFAB 2.1) COMPANY PROFILE 2.2) COMMITMENTS 2.3) PRODUCTS 2.4) QUALITY 2.5) INFRASTRUCTURE 2.6) PRODUCTION CAPACITY 2.7) LOOMS AND MACHINES AVAILABLE WITHIN THE COMPANY 2.8) RESEARCH MARKETS

CHAPTER 3 INTRODUCTION TO COMPENSATION SYSTEM 3.0) INTRODUCTION

3.1) COMPONENTS OF EMPLOYEE COMPENSATION 3.2) IMPORTANCE OF COMPENSATION 3.3) CONCEPT OF FAIR WAGES: 3.4) ADVANTAGES OF FAIR WAGES 3.5) FACTORS INFLUENCING WAGE AND SALARY STRUCTURE 3.6) SYSTEMS OF WAGE PAYMENT 3.7) ADVANTAGES OF TIME RATE SYSTEM 3.8) DISADVANTAGES OF TIME RATE SYSTEM 3.9) MERITS OF PIECE RATE SYSTEM 3.10) DEMERITS OF PIECE RATE SYSTEM 3.11) INCENTIVE SYSTEMS OF WAGE PAYMENT 3.12) FEATURES OR REQUISITES OF A GOOD INCENTIVE PLAN CHAPTER 4 RESEARCH METHODOLOGY 4.0)INTRODUCTION 4.1) JUSTIFICATION OF THE STUDY 4.8) TOOLS USED FOR ANALYSIS 4.3) THE BASIC TYPES OF RESEARCH ARE AS FOLLOWS 4.4) RESEARCH DESIGN 4.5) SAMPLE DESIGN

4.6) METHODS OF DATA COLLECTION 4.7) DATA USED FOR THE PROJECT 4.2) OBJECTIVES OF RESEARCH TOPIC 5 FINDING & SUGGESTION 5.0) FINDINGS 5.1) RECOMMENDATIONS 5.2) CONCLUSION TOPIC 06 BIBLIOGRAPHY

EXECUTIVE SUMMARY

In this project, the researcher analyzed the different aspects of compensation system of . Prime objective was to understand and interpret the compensation structure which includes various components such as wages, salaries, incentives, perquisites & other benefits. As employee compensation is usually the single largest expense. So, organizations continuously try to optimize the cost. But these simple cost cutting measures are not always effective. And also employees create, deliver and maintain most of the organizations value and losing those valuable people in the organization can cost a lot. This project includes components of compensation, its importance in an organization, factors influencing compensation structure, wage payment system and all other aspects related to compensation. In this study, Descriptive Research Design has been used. This research design is about the characteristics of particular things. The data used in this project is collected from various websites, manuals, monthly periodicals etc. Researchers analysis of the study undertaken is quite satisfactory which shows that this company i.e. HANDFAB has good compensation system.

CHAPTER 1 INTRODUCTION TO THE INDUSTRY 1.0) INDUSTRY PROFILE

Carpet Industry is one of the oldest industries in India. Carpet Weaving was brought to India by Moguls. Some of the majestic carpets were woven during this Mogul era. Over the period, the weaver has become an artist, bringing the magical exotic colors to the Indian carpets. Artists bring aesthetic touch to the carpets by creating magic with colors and provide carpets an unusual beauty and elegance. Indian Carpet Industry has always been an important part of Indian export industry. Carpet holds recognition from over centuries. Earlier, only a few centers in India were involved in carpet weaving but slowly, due to several historical reasons and availability of resources various clusters have risen in northern part of India for the same purpose. Each center has its own competitive advantage. These centers employ nearly millions of people all across the country.

Major belts of carpets include Bhadohi, Mirzapur and Agra belt in Uttar Pradesh, Jaipur , Bikaner in Rajasthan, Panipat belt in Haryana and Kashmir belt. Carpets are broadly classified into two major categories, traditional and modern. Otherwise, Indian manufacturers make carpets in various types, these are; Chain Tufted Hand-knotted GABBE Pure Handmade Staple or Synthetic Carpets stich Woolen Woolen Woolen Silk Woolen Rugs Carpets Carpets Carpets Carpets Durries

Each type has its own individuality in terms of design, look and the wool used in its manufacturing. Variety in carpets fulfills various needs of customers. And the distinct variety added to the carpets is inclusion of silk and cotton which are innovatively mixing with the wool to give an attractive look to the carpets. Silk carpets are considered to be high quality pieces and are comparatively high in price. Indian carpets are following the old popular patterns such as floral, rhomboids, animal patterns and arabesques in its designs. These traditional styles are preferred even today. However, Indian carpet industry seems to be highly influenced by western patterns and designs which are giving a competitive edge to Indian traditional carpets, like Chinese patterns and Persian designs. Now, in India, the industry is glowing with its utmost glory from the states of Rajasthan, Kashmir, Punjab, Uttar Pradesh, Andhra Pradesh, and Himachal Pradesh. Today, carpet exports have been showing a steep rise. According to an article by Indian Brand Equity Foundation, India accounts for 61 per cent of the global loom age, 12 per cent of the world's production of textile fibers & yarn and 25 per cent share in the total world trade of cotton yarn. Exports of carpets have increased from US$ 654.32 million in 2004-05 to US$ 930.69 million in 2006-07, showing a growth rate of 42.23 per cent. During April-October 2007, carpet exports totaled as US$ 404.74 million. Hence, makes India the world leader in carpet exports with 36 per cent of the global market share.

Indian carpets are famous worldwide for its magnificent designs and heart-winning workmanship. Hand-knotted woolen carpets, tufted woolen carpets, chain stitch rugs, pure silk carpets, staple/synthetic carpets, handmade woolen durries are some of the floor covering types for which there is a huge market demand in the European and American market.

The Indian carpet industry has considerable potential for growth. However, lesser innovation techniques, outdated technology, labor law issues and lack of

infrastructural facilities in some of the rural areas are major barriers that make this industry less competent as compared to other carpet supplying countries. With these factors, the Indian government has established Carpet Export Promotion Council of India (CEPC) to promote the exports of hand knotted carpets and other floor coverings. It provides the necessary support to the Indian exporters, identifies the markets, provides financial and marketing assistance, sponsors participation in fairs and exhibitions and also conducts publicity abroad.

1.1)CARPET MANUFACTURERS IN INDIA

The art of hand-knotted carpets probably originated in the Southern Central Asia during 3rd and 2nd millennium BCE. Turkmenistan and Persia (Iran) were the countries which served as a cradle of the art of carpet making.

The art of carpet making, in India was introduced with the beginning of the Mughal Dynasty in the early sixteenth century. The last successor of Babar extended his rule from Kabul to India to establish the Mughal Empire. Under their patronage, Indian craftsmen adopted Persian techniques and designs and gradually came with their own creativity. Carpets, which were woven in Punjab at that time (often-called Lahore carpets today), made use of motifs and decorative styles found in the Mughal architecture.

During Mughal period, the carpets made on the Indian subcontinent became so famous that demand for them spread abroad. These carpets had distinctive designs. Carpets made for the Mughal emperors, including Jahangir and Shah Jahan, were of the finest quality. Under Shah Jahan's reign, Mughal carpet weaving took on a new aesthetic level and transformed as unique classic art pieces.

That tradition of carpet weaving was carried from the Mughals to other dynasties and further taken down to generations and spread across various states. Every state

or region now has a unique mix of its own specialty and ethnic sense of carpet designing. And also, the quality and categories of carpets depend on the availability of raw materials and skill set of craftsmen of different regions.

The Indian subcontinent has always welcomed the new cultures and the person which has made the Indian culture richly diversified with art forms accumulated over the centuries. And this cultural impact is reflected on the carpet manufacturing art.

List of distinguished manufacturers of India below: Domotex International, New Delhi Jaipur Rugs Company Private Ltd, Jaipur Vimla International, Jaipur KK Overseas, Delhi Deepiga Tax, Tamil Nadu D-Raj International, New Delhi United Overseas, Panipat Vinaayak Fab, Tamil Nadu Oasis Agencies, Kolkatta Vaibhav International, Jaipur Anjani Carpets, Bhadohi Bansal Carpets, Agra Oriental Carpet Center, New Delhi Kashyap Carpets, Kashmir PKJ Exports, Mumbai Craft India International, Kanpu Versatile Trade, Delhi

 Monarch Exports International, Gurgaon Buoyant Export, Agra

1.2) CARPET MANUFCTURING PROCESS

Hand-made carpets are technically very different from machine-made carpets. As it is quite relevant from their names, hand-made carpets are woven by hands while machine-made carpets undergo treatments by various machines. 1) Process of Handmade carpets 2) Process of machine made carpets Hand-made V/s Machine-made carpets Carpet is a textile floor covering that is fixed to the floor surface and extends wall to wall. Such a textile floor covering is manufactured in two ways: hand-made or machine-made. One of the most prominent differences between hand-made and machine-made carpets is that the former holds a valuable impression. The other main difference between these two types of rugs is the actual manner of construction. Machinemade rugs consist of plastic derived fibers being glued onto a strong plastic base which makes them initially very durable, but over the time the adhesive degrades and the fibers detach easily from the base It is well said that for rooms with modern designs or active areas with high traffic or children, machine-made rugs with contemporary designs are excellent. While on the other hand, there is a common misconception that hand-made oriental rugs are delicate and not durable. Their ornate designs and soft feel often deceive many.More clarity on the differences can be explained in terms of: Knots used Sides and Ends sewn Back of the carpets Materials used Touch

Knots Machine-made rugs and carpets are not woven by hand but are loomed by a computer generated system or apparatus. There are no knots in machine-made rugs. Whereas in a hand-made rug, each knot is hand knotted and tied. In machinemade carpets, threads are glued or looped onto a hot latex (plastic) backing which cools and hardens. They show a complete and rigid uniformity in manufacture which transforms into a static design. Machine made rugs generally lacks spontaneity. SIDES AND ENDS In a hand-made or hand-knotted rug, the fringe is part of the rug. The fringe is not sewn on as an extension, as is the case in machine-made rugs. Machine-made rugs always have serged sides or machine stitching on both sides of the rug, as opposed to a hand-knotted which will be irregular.

Back In power loomed or machine-made rugs the stitching on the back is very consistent. They have extremely regular knots and even structure remains identical in all parts of the carpet. On the other hand, in hand-knotted rugs the stitching varies slightly due to different tensions on the wool as people hand-tie the knots. Most hand-made rugs and carpets are covered with a cotton or canvas. Materials Acrylics and other chemically processed materials are usually used to make machine-made carpets. Hand-knotted rugs and carpets use pure organic wools. Touch you can also differentiate a machine-made and hand-made rug simply by touching. If you place one finger on the front of a machine-made rug and your thumb on the back and pinch tightly, the rug will compress greatly and you will feel a sensation going right through one side to other side.

1.3) SWOT Analysis of Carpet Industry

Indian Carpet industry is a unique kind of industry. Its highly unorganized with lack of proper channels. Still, it has managed to show impressive performance in the past. What is behind this industry which drives the exports? One cannot forget that it had significant share in Indian exports till early 1990s. SWOT analysis will bring forth the value drivers and stumbling blocks in this industry.

STRENGTHS:Artistic skills:Over the period, major carpet centers have built huge network of artistic weavers. The industry currently is employing millions of people directly and indirectly. They are highly skilled in these areas.

Costs: India has an advantage in terms of costs. The labor costs in India are comparatively low. Also, total cost of producing a carpet is low compared to countries like Turkey, Iran without compromising on quality fronts heavily.

Innovations:Innovations is one of the major criteria for selling carpets. As carpets are considered as luxury items and consumer trends re changing continuously, innovation is a key for the success. The countries like China which produce low cost carpets lack in innovations.

Flexibility:Indian carpet industry can manufacture all kinds of carpets. Other countries have specialized in particular carpets. Also, the carpets of any size can be manufactured in hand knotted categories. This is not possible in machine made carpets. There are several kinds of manufacturers which can take small orders or big orders. Hence, Indian industry can offer wide options to a customer for carpet purchases.

WEAKNESSES:Unorganized:Indian carpet industry is highly unorganized. Therefore, a lot of activities are duplicated. Hence, it increases the cost of production. Also, it increases the time of delivery of carpets. Marketing Channels:The carpet manufacturers lack the proper marketing channels. They find it very difficult to access the customers is increase the market. Therefore, they are heavily dependent upon the buying agents.

Infrastructure:The infrastructure is very poor leading to higher time for production and costs. Also, buyers find it difficult to visit places like Bhadohi for looking designs. Most of the manufacturers do not have showrooms in the cities to showcase their creations. There is only one institute which provides courses related to carpet industry.

Professional Approach:Majority of players lack professional approach for doing the business. They do not respect delivery time and quality issues. Therefore, buyers like to deal only through buying agents to control them.

Internal Competition:Many players have entered the industry increasing the competition. There is a tremendous competition among players on price front and are willing to offer very low prices even though some one has already taken order.

Intellectual Property Rights:Many players in the industry copy designs from each others. There is a lack of respect for intellectual property rights

1.4) OPORTUNITIES:-

Globally, Home furnishing market is moving towards Carpet industry. Hence, this movement offers a new market for Hand tufted Carpets which are comparatively cheaper to hand-knotted carpets.

Traditionally, the carpets were purchased by old people. The evolution of modern design has attracted youth market as well. This segment can be further expanded. After dealing with China for some time, many players think that India provide better option and flexibility. This kind feeling can further be tapped

Carpets are generally considered to be expensive. With use of modern technology, prices can further be reduced. Also, cutting middlemen will directly benefit the consumers thereby increasing the demand.

Organized operations can enhance the image of Indian Carpet industry.

The companies like IKEA, Wal-Mart, etc can offer new and larger market to the manufacturers provided this market is properly tapped.

THREATS:o If not handled properly, current rebound in the industry may not be sustainable o Unhealthy competition in the industry kills each other. o Indian Carpet industry has not completely got rid off of issues like Child labor. Hence, risk of possible backlash on the industry is going to be there for considerable time in the future although some action is being taken on this front.

Present & Future Growth Drivers of the Industry

Low End Carpets Low end carpets such as hand-tufted carpets are currently driving the growth of industry. These carpets have expanded the market as these carpets are cheaper and affordablefor many consumer segments. Due to which these segments aregoing to drive future growth for a considerable time.

Modern Designs As in the case of low end carpets, modern designs are also expanding the market. Modern designs are attracting young consumers. Also, there are a great number of consumers who prefer modern designs compared to traditional designs. These designs are prominent in countries like Germany, Scandinavia, etc.

New Markets Traditionally, carpets industry was dominated by buyers from USA & Germany. However, new markets are emerging for carpets and they are growing fast. These are basically in developing countries or lesser developed countries like Spain, etc. Growth in income level is the major driver for these markets.

Big Retailers Big retailers like Wal-Mart, Ikea can also drive the growth inthe carpet industry and these players have huge networkwith a large customer base. Low-end carpets can be amajor product that can be targeted by these players or big retailers.

Cost Management In Todays competitive market, price is considered as animportant factor. Therefore, better price can be offeredthrough better costs management. Effective

costsmanagement will prove to be a competitive advantage toany player. This trend is common in every industry.Carpet industry is no exception to this. Better cost managementwill decrease the price which can lead to increase involume sales.

TOPIC - 2

INTRODUCTION TO THE COMPANY

2.0)INTRODUCTION TO HANDFABS
HANDFAB is a leading manufacturer and exporter of hand tufted and hand woven carpets for the last 15 years based inPanipat, well known for home furnishing goods from India. In the fifteen years of operations they have continuously moved ahead with desire to learn and excel in field of carpet production. PRESIDENT:MR. Abhinavgarg

Product range includes:

Hand Tufted Woolen Carpets Hand Woven Woolen Carpets Sea Grass Carpets Jute Carpets Persian Tufted carpets Bath Mats Rugs Durries

2.1) COMPANY PROFILE Company has an extremely efficient production infrastructure equipped with all the facilities under one roof which is capable in performing in the most competitive environments. Apart from quality ,their focus on Prompt and on-schedule deliveries has led to rapid growth and progress which in turn further enabled them to develop a strong customer loyalty in Indian and global markets.

Company Profile Company Name: HANDFAB

Business Type:

Manufacturer, Trading Company, Distributor/Wholesaler

Product/Service

Carpet, Bathmat, Shaggy, Rugs, Area Rugs

Product/Service (We Buy):

Tufting Machinery, Latexing Plant, Machine Made Carpet

Number of Employees:

101 - 500 People

Main markets:

South America and Western Europe

2.2) Commitments:

Competitive market price. Quality products. Timely deliveries. Use of safe, eco friendly dyes for healthy environment. No Child Labor at all Clean and healthy working environment at working place. Progressive company policy for workers.

2.3) Products

Rugs: Rugs and carpets usually they both have no difference except in size and usage. Rugs usually have multiple uses. Rugs may be used as central flooring

furnishing, foot rug, wall dcor, sofa throws and other decorative utilities. They usually have an artistic or stylish touch in terms of patterns, shape or color.Whether traditional hand knotted hand tufted or the modern machine made variety, a rug will set off any interior with their finer finish and intricate patterns. Carpets: Carpets are usually larger in size than rugs and these are mainly used as floor covering. Carpets may be used as wall to wall floorings or wide centerpieces .Carpets can be hand-knotted, tufted, bonded or machine made.

2.4) Quality
At HANDFAB, Quality is corporate mantra at every level of production and administration that ensures maximum customer satisfaction The in-house quality checks done under professional personnel make sure that the carpets meet all international standards.

Fig. 1.1 Quality at the company

They have a team of highly talented designers who are continuously coming out with exquisite designs, magnificent cuts and fabulous colors to appeal the clients all over the globe. They are engrossed in bringing forth a collection of products which is a combination of modernity and tradition.s real strength lies in the weavers working on the state-of-the-art looms. These master craftsmen have woven pieces that have enabled them deliver quality products to the clients for one and half decades now. They understand that each rug needs specific attention and it is because of this emphasis on

quality that they have successfully achieved customer appreciation resulting in long term relations

2.5)Infrastructure
HANDFAB has the infrastructural set up to undertake complete carpet production process within its factory premises at Panipat, India. They possess state-of-the-art production unit equipped with state-of-the-art looms and hi-tech machines that enable them to carry out production indigenously. Their looms for gun tufting, handlooms, finishing unit, washing unit, latex section and drying chamber enables them to deliver products with unmatched quality and finish.

Fig. 1.2 Companys infrastructure

2.6)PRODUCTION CAPACITY
Hand tufted 10000sq meter per month

 Hand woven Bath Mats

25000sqmeterper month 20000sq meter per month

2.7)Looms and Machines available within the company

60 Handlooms 40 Hand Tufted Looms. (With manual & electric gun machines) 90 Pit looms 35 Eight needles bathmat machines 80 Single needle bathmat machines 3 Carpet drying chambers Cobble tufting machine with Multi Needles

2.8)Research Markets
EUROPE, UK, USA, JAPAN, MIDDLE EAST, HONG KONG, SOUTH AFRICA, NEW ZEALAND AND AUSTRALIA.

CHAPTER 3 INTRODUCTION TO COMPENSATION SYSTEM

3.0) INTRODUCTIONCompensation or Reward system plays vital role in a business organization. Since, among four Ms, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Land, Labor, Capital and entrepreneur are four major factors of production. Every factor contributes to the process of production/business and expects return from the

business process. The labor expects wages from the process. Wage is a monetary payment, which is made by the employer to his employee for the work done or services rendered. It is a monetary compensation for the services rendered. Wages are usually paid in cash at the end of one day; one month etc. Money wage is the monetary compensation paid by the employer to his employee for the services rendered. Such compensation is also called wage or salary or reward given by an organizationto a worker.

Labor plays significant role in bringing about the process of production/business in motion. Labor therefore expects to have fair share in the business/production process. Compensation is what an employee receives in return for his or her contribution to the organization. Compensation occupies an important place in the life of an employee. His or her standard of living, status in the society, motivation, loyalty, and productivity depend upon the remuneration he or she receives. For the employer too, employee compensation is significant because of its contribution to the cost of production. Compensation is a key factor in attracting and keeping the best employees and ensuring competitive edge in this increasingly competitive world.Generally, compensation payable to an employee includes the following three components:

Basic compensation for the job (wage/salary) Incentive compensation for the employee on job Supplementary compensation paid to employees (fringe benefits and employee services)

3.1) COMPONENTS OF EMPLOYEE COMPENSATION

The compensation of an employee includes wage/salary, incentives, fringe benefits, perquisites and finally non-monetary benefits. The following chart presents the compensation payable to the workers or the components which contributes to the component.
Remuneration Packet of an employee

Wage/ Salary

Incentives

Fringe benefits

NonPerquisites monetary benefits

Total
Compensation

Payable

Fig. 1.3 Components of compensation 1. Wages and salary: Wages meanshourly rates of pay, and salary implies monthly rate of pay, irrespective of the number of hours put in by the employee. Both are subject to the annual increments. They differ from employee to employee, and depend upon various factors such as- the nature of job, seniority, and merit.

2. Incentives:Incentives are those which are paid in addition to wages and salaries and are also called payments by results. Incentives depend upon productivity, sales, profit, or cost reduction efforts.These are: (a) Individual incentive schemes (b) Group incentive programmes.

Individual incentives are applicable to particular employee performance. But, where a given task demands group efforts for completion, incentives are paid to the group as a whole. The amount is then divided among group members on an equitable basis. 3. Fringe benefits: These are monetary benefits, which are provided to employees which include the benefit of: (a) Provident fund (b) Gratuity (c) Medical care (d) Hospitalization payment (e) Accident relief (f) Health and Group insurance (g) Subsidized canteen facilities (h) Recreational facilities and (i) Provision of uniforms to employees (j) travelling allowance etc. 4. Perquisites: There are special types of benefits offered to managers/executives. The purpose behind this is to retain competent executives. Perquisites include the following: (a) Company car for travelling, (b) Club membership, (c) Paid holidays, (d) Furnished house or accommodation, (e) Stock option schemes, etc. 5. Non-monetary benefits: These benefits provide psychological satisfaction to employees even when financial benefit is not available. These are:(a)Recognition of merit through certificate, etc. (b) Offering challenging job responsibilities, (c) Promoting growth prospects, (d) Comfortable working conditions, (e) Competent supervision, and (f) Job sharing. Through these benefits employees are motivated a lot, which ultimately proves to be beneficial for the organization.

3.2) IMPORTANCE OF COMPENSATION

1. to worker:

Wage payment is important to all categories of workers. Wage is a matter of life and death to workers/employees. Their life, welfare and even social status depend on wage payment. It is only source of income to large majority of workers. They and their unions always demand higher wages and other monetary benefits. Majority of labor problems and disputes are directly related to wage payment. The efficiency of workers and their interest and involvement in the work depend on wage payment. Even their attitude towards employer depends on wage payment. In brief, wage payment is a matter of greatest importance to workers. Wage problem is the most persistent problem before the entire labor force. 2. to employer: Wage payment is equally important to employers as their profit depend on the total wage bill. An employer in general is interested in paying low wages and thereby controls the cost of production. However, low wages are not necessarily economical. In fact they may prove to be too costly to the employer in the long run. As if workers are not paid properly then it is difficult for the company to retain them. An employer has a moral and social responsibility to pay fair wages to his worker as they are equal partners in the production process. He should give fair wages which will benefit to both the parties. Employees will offer full co-

operation to the management when they are paid attractive wages. On the other hand, strikes and disputes are likely to develop when workers are paid low wages or when they are dissatisfied and angry due to low wage rates. It is possible to earn more profit by paying attractive wages to workers. 3. to government: Government also give special importance and attention to wages paid to industrial workers as industrial development, productivity, industrial peace and cordial labormanagement relationship depend on the wage payment to workers. Government desires to give protection to the working class and for this minimum wages act

and other Acts are made. In India, wages are now link with the cost of living. This

is for the protection of workers. And Government is the biggest employer in India and the wage rates of government servant and employees of public sector organizations are decided by government itself. And Revision of pay scale of government employees made for adjusting their wages as per the cost of living. For this purpose, Pay Commission is appointed and pay scale is adjusted as per the recommendations made.

3.3) CONCEPT OF FAIR WAGES:

Fair wages is the wage which is above the minimum wage but below the living wage. The lower limit of the fair wage is the minimum wage and the upper limit is set by the ability of the industry to pay. Between these two limits, fair wages should depend on the factors like:1. Prevailing rates of wages in the same region or neighboring areas 2. Employers ability to pay 3. Level of national income and its distribution 4. Productivity of labor 5. Status enjoyed by the industry in the economy 6. Prevailing wages rates in the same occupation

Hence it can be said that fair wages are determined on industry cum region basis. When fair wages are paid employees enjoy higher standard of living. It is accepted fact that wages must be fair and reasonable. Wages are fair when the employee is able to meet its essential needs and enjoy reasonable standard of living. Equal pay for equal work serves as base of fair wage

3.4) ADVANTAGES OF FAIR WAGES Therefore, there are certain advantages of providing fair wages to the workers. The fair compensation system will help in the following manner: 1. If an ideal compensation system is designed, it will have positive impact on the efficiency and results produced by workmen. 2. Such system will encourage the normal worker to perform better and achieve the standards fixed. 3. This system will encourage the process of job evaluation. It will also help in setting up an ideal job evaluation, which will have transparency, and the standards fixing would be more realistic and achievable. 4. This system would be well defined and uniform, which will be applied to all the levels of the organization as a general system. 5. This system would be simple and flexible so that every worker/recipient would be able to compute his own compensation receivable. 6. Such a system would be easy to implement, so that it would not penalize the workers for the reasons beyond their control and would not result in exploitation of workers. 7. It will help in raising the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to all workers. 8. Such system would help management in complying with the various labor acts.

9. Such system would also bring about settlement of disputes between the workmen union and management. 10.The system would embody itself the principle of equal work equal wages. Encouragement for those who perform better and opportunities for those who wish to excel. 3.5) Factors Influencing Wage and Salary Structure The organizations ability to pay: Compensation paid to the workers depends upon organizations ability to pay, to a large extent. Companies which have good sales and therefore high profits tend to pay higher wages than those which are running at a loss or earning low profits because of the high cost of production or low sales. Supply and demand oflabor: If the demand and certain skills of labor are high and the supply is low the result is rise in the price to be paid for these skills and the other alternative is to pay higher wages if the labor supply is scarce and lower wages when it is excessive. The cost of living: When the cost of living increases, workers and trade unions demand enhanced wages. But, when living costs are stable or decline, the management does not resort with this argument as a reason for wage reduction. The living wage: Employers feel that the level of living prescribed in workers budget is opened to argument as it is based on subjective opinion. Job requirements: Jobs are graded according to the given skill, responsibility and job conditions required. Accordingly, wage structure is decided.

 Trade unions bargaining power: Trade unions do affect the rate of wages. Generally the stronger and more powerful trade union, higher the wages. Prevailing market rate: This is also known as comparable wages or going wage rate. Reason behind this is competition. It means that competitors adhere to the same relative wage level.

Skill levels available in the market: With the rapid growth of industries and business trade there is shortage of skilled resources. The technological development and automation has been affecting the skilled levels at a faster rate. Psychological and social factors: These factors determine in a significant manner that how hard a person will work for the compensation received or what pressures he will exert toget his compensation increased.

3.6) SYSTEMS OF WAGE PAYMENT

A) TIME RATESYSTEM B) PIECE RATE SYSTEM Time rate system: It is the oldest and simplest method of wage payment used mainly in the industrial as well as government departments. Wages are paid to the workers as per the time spent by the workers in the factory. The production done by them is not taken into consideration. Time rate system is also known as day wage system. In the time rate

system, efficiency, sincerity, ability of the worker is not given attention and all the workers are paid at one and the same rate as per the period spent in the factory.

3.7) ADVANTAGES OF TIME RATE SYSTEM:

1) Easy and simple: Time rate is easy to understand and simple to follow and calculate. Each worker knows how much wage payment he is entitled to at the end of the month. 2) Guarantee of minimum wage: It gives the guarantee of certain minimum wage payment to every worker irrespective of their working capacity which gives a sense of security to all workers as regards wage payment. 3) Maintains quality of production: Quality of production is maintained as the workers are not in a hurry to complete the work. So, they do not spoil the quality because of the temptation to earn more. 4) Avoids quarrels among workers: Time rate avoids quarrels among the workers as uniform wages are paid to all. 5) Support from trade unions: Workers and trade unions support time rate system as all workers are placed in one category as regards wage payment which ensures unity among workers. Trade unions normally prefer this system of wage payment. 6) Convenient in modern factory system: Time rate payment is convenient in modern factory system where production process is continuous and integrated. It is not possible to measure the work completed by one individual worker and hence time rate system is convenient.

3.8) DISADVANTAGES OF TIME RATE SYSTEM:

1) Not scientific: Time rate is not scientific system of wage payment as there is no direct linking between wages and production/productivity. 2) Absence of positive encouragement: In the time rate system, there is no positive encouragement to workers to improve their efficiency/ performance as the wage rate is uniform to all workers; efficient and inefficient. 3) No initiative to workers: Time rate fails to encourage workers to take more interest and initiative in their work. In fact, it encourages them to follow go slow policy. As wage payment is not linked with the production given. 4) Strict supervision: In the time rate strict supervision on the workers is essential as payment is for period and not production. This raises the expenditure on supervision. 5) No distinction between workers: In the time rate system of wage payment, no distinction is made between efficient and lazy worker, both are paid at one rate which is unfair. This system does not prove to be beneficial to sincere and efficient workers. They are discouraged because they are paid less than what they deserve due to which, they may even leave the job. 6) No effect on productivity/ efficiency: Time rate fails to raise productivity and efficiency of labor force as it is not an incentive system of wage payment. 7) Labor cost may increase: In the time rate system, there is a possibility of increase in the labor cost without corresponding increase in the production. As workers may work with slow speed, give less production but collect the wage as per time or day fixed. Piece rate system: This is yet another or an important system of wage payment. It is opposite to the time rate. It is treated as an incentive wage system as it encourages workers to produce more and also to earn more. In the piece rate system, wages are paid as per

the output given by the worker and not as per the time spent by the worker in the factory. Payment is made according to results in terms of output given. Wage rate is fixed per piece of work or for certain quantity of production. The production given by a worker at the end of the day is counted and payment is made accordingly. 3.9) MERITS OF PIECE RATE SYSTEM: 1) Linking of wages with production: Here wages are linked with production or productivity. It raises the productivity of labor. 2) Distinction is made between efficient and inefficient workers: Distinction is made between efficient and inefficient worker and full justice is done to efficient worker as he gets payment in proportion to the production given. 3) Encourages workers to take initiative in the work: Piece rate system encourages workers to take more interest and initiative in the work as every worker gets full reward of his efforts. 4) Fair to employer and employees: This system is fair to employers as well as employees. The employees get income in proportion to production given by them and the employer gets production in proportion to the wage paid. 5) Incentive system: This system serves as the incentive system. Workers work efficiently and take interest in the work due to corresponding benefit/ reward in the form of higher wage payment. 6) Limited supervision: In this system strict supervision on the workers is not necessary as workers work sincerely because their wage payment is directly linked with their sincerity and ability. 7) Freedom of work to workers: Workers get more freedom of work and there is effective control on the cost of production in the piece rate system. 8) Brings cordial relations: Piece rate brings cordial labor- management relations and industrial peace.

3.10) DEMERITS OF PIECE RATE SYSTEM 1) No guarantee of minimum wage payment:According to thissystem, certainty for minimum wage payment to a worker. This may prove to be dangerous particularly to a newly recruited worker. 2) Complicated system: Piece rate system is complicated and difficult as it is difficult to understand by ordinary workers. Management has to keep elaborate records of production given by each worker. 4) Disturbs unity of workers: Piece rate affects the unity among workers as wage payment will not be uniform to all workers. This will lead to quarrel among workers. 5) Not fair to trainees: Piece rate system does not seems to be fair to trainees, as their capacity to produce is less and naturally they will get less wages. 6) Quality of production is adversely affected: It affects the quality of production as workers may work with speed and this may bring down the quality of production.

3.11) INCENTIVE SYSTEMS OF WAGE PAYMENT

The wage plan should be highly incentive means it should encourage workers to take more interest in the work, produce more and also earn more. The wage plan which serves all these purposes related to work is called incentive wage plan. Such an incentive plan is beneficial to both - employers and employees. Incentives include monetary as well as non-monetary benefits. Incentives lead to motivation among workers. In every incentive plan, wages/salaries are linked with the given output. Incentives are not fixed as wages and salaries. They vary from

individual to individual.ILO defines incentives as "payment by results". Incentives can also be stated as "incentive systems of payment. TYPES OF INCENTIVE PLANS: There are two types of incentive plans as given below:(a) Individual incentive plans (b) Group incentive plans Individual incentive plan is provided for individual employees. Employee has to work hard i.e. efficiently, produce more and share the monetary benefits for himself. The incentive benefit is directly linked with his ability, efficiency and capacity. In the group incentive plan, the incentive is not for individual employee but for the group of employees working in one department or area. The group will work collectively, give more production and share the incentive benefit. Initially the benefit will be given to the group and further, it will be divided among the members of the group. 3.12) FEATURES OR REQUISITES OF A GOOD INCENTIVE PLAN:

Simplicity: A good incentive plan is one which is easy to understand and simple to apply. An average worker must be able to understand the incentive offered and what he is expected to do. The monetary as well as non-monetary benefits which are to be offered must be made clear to all workers.

Encourage initiative: A good incentive plan should create initiative among workers to work more and to earn more and more. It must offer more profit/production to the firm or company.

Definiteness and flexibility: A good incentive plan should be definite which means frequent changes should not be made as regard rates, etc. as such type of changes create confusion and doubts in the minds of workers. In addition to this, an ideal incentive plan should be flexible. It should consider technological and other changes taking place from time-to-time. There should be suitable provision for making such adjustment.

Wide coverage and equitable: A good incentive plan should not be for employees in some departments only. It should have a wide coverage and almost all employees should be covered under such plan. Such wide coverage makes the plan popular among all categories of workers. An incentive plan must be equitable which means it should provide equal opportunity to all employees to show efficiency and earn more. And hence avoids dissatisfaction among employees and makes the plan just and fair to all employees.

Guarantee of minimum wage payment: An incentive wage plan should include certain minimum wage amount to every worker per month. This should be irrespective of the production, that employee gives. Such provision of guarantee payments creates a sense of security and confidence among workers at all levels.

Scientific fixation of standard workload: Under the incentive plan, as extra payment is given for the extra work i.e. work which is over and above certain quality. Such standard work-load must be clear, specific and fixed with scientific studies so that majority of employees will be able

to give extra production for extra payment.

Justice to employer and employees: A good incentive plan should do justice to both parties- employer and the employee. The employer must get additional production along with extra profit and the workers must get extra payment for extra production.

3.13) FRINGE BENEFITS:

Fringe benefits may be defined as wide range of benefits and services that employees receive by the employer as an integral part of their total compensation package. They are based on critical job factors and work performance. Fringe benefits include indirect compensation as they are usually extended as a condition of employment and not directly related to performance of concerned employee. Fringe benefits are just supplements to regular wages received by the workers at a cost of employers. They include benefits such as paid vacation, pension, health and insurance plans, medical allowance etc. Such benefits are measured in terms of money and the amount of benefit is generally not predetermined. The purpose of fringe benefits is to retain efficient and capable employee in the organization over a long period. They boost loyalty and acts as a securitybase for the employees.

FEATURES OF FRINGE BENEFITS:

 Different from regular wages:Fringe benefits are different from regular wages as such benefits are those payments, which an employee enjoys in addition to basic wages he receives. It is a supplementary payment andprovides support and satisfaction to an employee. Employee motivation: Fringe benefits are not given to employees for performing certain work instead the purpose is to encourage them to take more interest in the assigned work. Useful but avoidable expenditure:Fringe benefits constitute a labor cost for the employer as these are paid by the employer. Not directly linked with efforts:Fringe benefits are not directly linked with efforts made or the production given by an employee. Beneficial to all employees:Fringe benefits are a labor cost but its benefits are made available to the entire labor force and not to a small group of employees.

OBJECTIVES OF FRINGE BENEFITS: To supplement direct remuneration:Fringe benefits supplement the regular pay of employee. It raises the total earnings of an employee and hence provides better life and welfare to him. Employers prefer fringe benefits:Employers prefer this indirect remuneration instead of direct pay increase. To retain competent employees:Fringe benefits create happy and satisfied labor force. In addition, the management can attract and retain competent personnel in the organization by offering fringe benefits. To develop good corporate image : Fringe benefits help to develop a good image of the corporate.

 To raise employee morale: Liberal package of Fringe benefits raises the morale of employees.

LIMITATIONS OF FRINGE BENEFITS:

There are some limitations of Fringe Benefits. These are: Fringe Benefits may lead to unhealthy competition among employees which may create unrest situation. The expected benefit may not be available if the monetary benefits are not adequately attractive to all the employees. The motivation may not be as per expectation if the implementation of the benefits scheme is not transparent to all.

ADVANTAGES OF FRINGE BENEFITS

There are certain advantages of Fringe benefits. These are: Fringe benefits serves as support to remuneration paid to employees. Fringe benefits improve efficiency and productivity of employees in the organization. Fringe benefits act as added attraction to the employees. Fringe benefits reduce monotony of employees. They make employees cooperative for whatever organizational changes required to be introduced. Fringe benefits raisethemorale of the employees. Fringe benefits develop good corporate image which raise market standing of the organization. Fringe benefits act as motivating force. They motivate employees and

encourage them to work for the progress and prosperity of the organization.

TYPES OF FRINGE BENEFITS: (1) Payment for time not worked by the employee in the organization: Vacations. Leave with pay and allowances.

(2)Contingent and deferred benefits: Pension payment. Group life insurance benefit. Group health insurance. Sick leave, maternity leave, etc. Suggestion or service award

(3)Legally required payments: Old age, disability payments and health insurance Unemployment compensation facilities. Worker's compensation.

(4) Misc. benefits: Travel allowances. Company car and membership of clubs, etc Moving expenses. Child care facilities. Tool expenses and meal allowances, etc

CHAPTER - 4

RESEARCH METHODOLOGY

4.0) INTRODUCTION

Research methodology is a way to systematically represent a research on any problem. It tends to describe the steps taken by the researcher in studying the research problem along with the logic behind them. . The methodology combines economy with efficiency. The procedure adopted for conducting the research requires a lot of concentration as it has direct bearing on accuracy, reliability and adequacy of results obtained. Research in common language refers to a search for knowledge. Research can also be defined as a scientific and systematic search for pertinent information on a specific topic. Research is an art of specific investigation. Research is an academic and as such the term should be used in a technical sense. It is a voyage of discovery. Research methodology is a way to systematically study and solve the research problems.

4.1) JUSTIFICATION OF THE STUDY

The study is significant as it helps to know the perception of the employees about the compensation system of the company. Compensation is considered as a key factor in attracting and keeping the best employees and ensuring competitive edge in this increasingly competitive world. It helps in motivating the employees to put their best towards work and also fair compensation helps in achieving employee satisfaction. The study explains the compensation system or pay structure followed within the company. So the study becomes relevant to understand the various components of compensation and its relevance in attracting and retaining competent employees in todays business environment.

4.2) OBJECTIVES OF RESEARCH

MAIN OBJECTIVE

The main motive behind this research is to study the compensation system prevailing at HANDFABS. Sub objectives: To understand the compensation structure and its segregation into various components. To assess the satisfaction level of employees regarding the compensation system of the company

4.3)The basic types of research are as follows

1) Descriptive vs. analytical: Descriptive research includes surveys and fact-finding inquiries of different kinds. The main purpose of descriptive research is description of the state of affairs as it exists at present. In analytical research, on the other hand, the researcher is required to use facts or information already available. 2) Applied vs. Fundamental: Applied research is done for a particular problem or finding a solution for a particular problem. On the other hand, fundamental research is the basic research.

3) Quantitative Research: It is based on the measurement of quantity or amount. It is applicable that can be expressed in terms of quantity phenomenon. 4) Conceptual Research vs. empirical research Conceptual research is related to some abstract ideas or theory. Philosophers and thinkers, to develop new concepts or to reinterpret existing ones generally

use it.

On the other hand empirical research depends on experience or

observation alone, often without due regard for system and theory.

4.4) Research Design

The research design used in this project is Descriptive in nature. Descriptive research includes surveys and fact-finding enquiries of different kinds. The main purpose of this descriptive research is description of the state of affairs as it exists at present. The main characteristic of this method is that the researcher has no control over the variables; he can only report what has happened and what is happening.

WHY DESCRIPTIVE TYPE RESEARCH METHODOLOGY?

The purpose of descriptive research design is in descriptive state. The main characteristic is that the research has no control over the variables; he can only report what has happened or what is happening. In this project all primary data has been taken by researcher to know about the compensation system followed in the company for the employees. These primary data have been collected from various employees of the company.

4.5) SAMPLE DESIGN

The sample design used in this study is PROBABILITYRANDOM SAMPLING.

UNIVERSE
In statistics, universe or population means an aggregate of items about which we obtain information. A universe or population means the entire field under investigation about which knowledge is sought. A population can be of two kinds (i) Finite and (ii) Infinite.

But in this research project, only finite population is used as the employeesofHANDFAB.

SAMPLE SIZE
A part of population is called sample. In other words, selected units from the population are known as sample. In fact, a sample is that part of the population which we select for the purpose of investigation. In this research project, the sample size of this study is 150. This would help in easing up of Analysis and Interpretation and is also going to be reasonable to reach any conclusions.

4.6) METHODS OF DATA COLLECTION

To determine the appropriate data for research, mainly two kinds of data was collected: 1) Primary Data 2) Secondary Data Primary data Primary data is that data which is collected for the first time. These data are basically observed and collected by the researcher for the first time. Secondary data Secondary data are those data which are primarily collected by the other person for his own purpose and now we use these for our purpose secondly.

Sources of secondary data are Internet. Books and Journals. Company reports. Research work of others.

4.7) DATA USED FOR THE PROJECT

For the study conducted both kind of data have been used, primary as well as secondary. Primary Data-With the help of questionnaire and own observation or through communication with the company officials.

Secondary data- With the help of journals and internet.

4.8) TOOLS USED FOR ANALYSIS

Graphical and Tabular analysis The tools used for the analysis are as follows:Tables: Tables are used to represent the response of the respondents in a precise term so that it become easy to evaluate the data collected. Pie-charts: Pies charts have been used to express that how much percentage of the respondents have positive attitude and how much has negative attitude toward a particular situation. Graphs:-Graphs are nothing more than a graphical representation of the data collected in tabular form.

LIMITATION OF THE STUDY

 Findings are based on the views expressed by the respondents of different occupation and age so it may suffer from biased prejudices. The study has not been intended on a very large scale, have the possibility of errors, which cant be ruled out. The misunderstanding of the terms used in questionnaire by the respondents. Lack of awareness and knowledge among the selected sample unit. Some of the workers did not respond properly as they thought HR Department was carrying on some performance assessment or performance grading, on the basis of their responses. Time limitation was another constraint. Workers were not able to entertain properly due to their busy schedules.

DATA ANALYSIS AND INTERPRETATION TABLE 4.1 EMPLOYEES SATISFACTION WITH CURRENT SALARY PACKAGE

OPINION

NO.OF RESPONDENTS

% RESPONDENTS 60 40

OF

YES NO

90 60

EMPLOYEES SATISFACTION WITH CURRENTY SALARY PACKAGE

% OF RESPONDENTS 70 60 50 40 30 20 10 0 YES NO 60 40

Figure 4.1

INTERPRETATION The above table and chart shows that the majority of respondents i.e. 60% of the respondents are satisfied with their current salary package. And 40% of the respondents are not satisfied with the current salary package provided by the company.

TABLE 4.2 SATISFACTION LEVEL FOR COMPENSATION BASED ON

QUALIFICATION AND EXPERIENCE SCALE NO.OF RESPONDENTS A B 40 75 %OF RESPONDENTS 26.67 50

C D E

10 20 5

6.67 13.33 3.33

Figure 4.2

SCALE A =MOST SATISFACTORY B = SATISFACTORY C = NEUTRAL D = DISSATISFACTORY E = MOST DISSATISFACT

INTERPRETATION The above table and scale shows the employees satisfaction regarding compensation based on qualification and experience. Among them, 40 out of 150 feels most satisfactory 75 respondents are satisfactory. 10 respondents show their neutral response towards this. 20 showed their dissatisfactory response. 5 respondents out of 150 are most dissatisfactory with the compensation based on qualification and experience. It is interpreted that majority of the respondents are satisfied with the current compensation, considering their qualification and experience into account.

TABLE 4.3 BESIDES SALARY, ANY BENEFITS PROVIDE TO EMPLOYEES OPINION NO. RESPONDENTS YES NO 105 45 OF % RESPONDENTS 70 30 OF

BESIDES SALARY, ANY BENEFITS PROVIDED TO EMPLOYEES

30% YES 70% NO

Figure 4.3

INTERPRETATION It can be interpreted from the above table and pie chart that 70% of the respondents i.e. 105 employees agree that besides salary, other benefits are provided to employees. Whereas 30% of the respondents or 45 employees says that no other benefits are provided. So it implies that majority of the employees are availed of other benefits besides salary such as bonus, incentives etc

TABLE 4.4 SATISFACTION REGARDING INCENTIVES BENEFITS

OPINION

NO.OF

%OF

RESPONDENTS RESPONDENTS YES NO TO EXTENT 75 25 SOME 50 50 16.67 33.33

Figure 4.4 INTERPRETATION Hence concluded that 50% of the respondents are satisfied with the incentive benefits as provided by the company. 16.67% or 25 respondents out of 150 are not satisfied with theincentive benefits. Where 33.33% or 50 respondents are satisfied with the incentive benefits to some extent. TABLE 4.5 IS TIMELY COMPENSATION PAID TO EMPLOYEE

OPINION

NO.

OF %

OF

RESPONDENTS YES NO SOMETIMES 90 30 30

RESPONDENTS 60 20 20

IS TIMELY COMPENSATION PAID TO EMPLOYEES

20% yes 20% 60% no sometimes

Figure 4.5 INTERPRETATION From this pie chart it can be concluded that regular or timely payment is made in the company to employees as 60% of the employees are in favour of this. 20% of the respondents states that sometimes company make timely payment and sometimes not. And only 20% of the respondents says that they do not get timely compensation. TABLE 4.6

IS THERE ADEQUATE INCREEMENT IN PAY FOR EXTRA WORK OPINION NO.OF %of

RESPONDENTS RESPONDENTS ALWAYS 120 80 20 0

SOMETIMES 30 NEVER 0

Figure 4.6 INTERPRETATION: From the above table and figure, it can be interpreted that as per the feedback from the respondents of the company, 80% implies that for every additional work, there is always an adequate increment in pay structure. And 20% of the respondents states that company sometimes pay extra for extra work and sometimes not. But none of the employees says that there is not an adequate increment in pay for additional work.

TABLE 4.7 Is Organizations pay policy clear regarding salaries, pay &bonus Opinion NO. RESPONDENTS Yes no 105 45 OF % RESPONDENTS 70 30 OF

CLARITY OF ORGANISATION PAY POLICY RELATED TO SALARY, PAY , BONUS

30% YES NO 70%

Figure 4.7 INTERPRETATION Here it can be concluded from the above table and pie chart that there is clarity of organizations pay policy relating to salary, pay, bonus to 70% of the respondents.

And organizations pay policy is not clear to rest of the respondents i. e.30%. It can be interpreted that most of the employees understands the pay policy of the company. TABLE 4.8 Is there any biasness in the compensation package for similar jobs within the Organization?

OPTIONS

NO. RESPONDENTS

OF % RESPONDENTS 30 70

OF

YES NO

45 105

Figure 4.8

INTERPRETATION This figure shows that as per the opinion of the 70% of the respondents, there is not any biasness in the company in the compensation package for the similar jobs. Rest 30% of the respondents states that there is biasness in the company for compensation .In all, it can be concluded that Company is not so partial in providing compensationto its employees. Hence, there is similar pay for similar work in the company or internal equity is met in the company.

TABLE 4.9 BELIEF IN PERFORMANCE BASED PAYMENT SYSTEM OPINION NO.OF RESPONDENTS YES NO 115 35 % RESPONDENTS 76.67 23.33 OF

BELIEF IN PERFORMANCE BASED PAYMENT SYSTEM

23.33 Yes No 76.67

Figure 4.9 INTERPRETATION From the above pie chart and table it can be stated that 76.67% of the respondents or 115 employees are in favor of performance based payment system and 35 or 23.33% of the respondents do not believe in performance based payment system.

TABLE 4.10

MOTIVATIONAL FACTORS AT WORK PLACE FACTORS NO. OF % OF

RESPONDEN TS INCREMENTS BETTER AMENITIES SCOPE OF ADVANCEMENT BETTER WORKING CONDITIONS BETTER WORKLIFEBALAN CE FACILITIES 15 30 10 70 25

RESPONDENTS

46.67 16.67

6.66

20

10

MOTIVATIONAL FACTORS IN WORK

% of respondents
50 40 30 20 10 0

Figure 4.10

INTERPRETATION With this bar chart, various motivational factors at workplace can be seen. Among them, majority of the respondents as 46.67% or 70 respondents think increment in the compensation is supposed to be the motivational factor in their work. 16.67% or 25 employees feel better amenities as the motivational factor, whereas 6.67% of the respondents or only 10 respondents take scope of advancement as the motivational factor at their work place. 20% considers better working conditions as the motivational factor.10% of the respondents consider better work life balance facilities at work place as the motivational factor. TABLE 4.11 AGREEMENT WITH PAY ACCORDING TO RESPONSIBILITIES HANDLED

SCALE

NO. RESPONDENTS

OF % RESPONDENTS 36.67 23.33 20 13.33 6.67

OF

STRONGLY AGREE AGREE NEUTRAL DISAGREE STRONGLY DISAGREE

55 35 30 20 10

AGREEMENT WITH PAY ACCORDING TO RESPONSIBILITIES HANDLED

40 35 % OF RESPONDENTS 30 25 20 15 10 5 0 STRONGLY AGREE AGREE NEUTRAL SCALE DISAGREE STRONGLY DISAGREE 13.33 6.67 23.33 20 36.67

Figure 4.11 INTERPRETATION: From this bar graph, it can be interpreted that 36.67% of the respondents or 55 out of 150 respondents strongly agree with this system of paying according to responsibilities handled by the employees. 23.33% or 35 out of 150 respondents agree with paying according to responsibilities handled. Then there are 20% of the

respondents who have neutral response towards it. 13.33% or 20 out of 150 respondents disagree with this system of payment. And 6.67% or 10 out of 150 respondents strongly disagree with this payment system.

TABLE 4.12 WILLINGNESS TO TAKE ADDITIONAL RESPONSIBILITY WITH INCREASED COMPENSATION OPINION NO. RESPONDENTS YES NO 105 45 OF % RESPONDENTS 70 30 OF

WILLINGNESS TO TAKE ADDITIONAL RESPONSIBILITY WITH ENHANCED COMPENSATION

30

YES NO 70

Figure 4.12 INTERPRETATION

From the above table and figure it can be concluded that 70% of the respondents are willing to take additional responsibility, if increased compensation is provided to them. But 30% of the respondents do not show willingness to take additional responsibility with increased compensation too. So it can be concluded that compensation alone is not sufficient to please the employees. TABLE 4.13 SATISFACTION WITH PIECE RATE SYSTEM OPINION NO. RESPONDENTS SATISFIED DISSATISFIED NEUTRAL 90 45 15 OF % RESPONDENTS 60 30 10 OF

SATISFACTION WITH PIECE RATE SYSTEM

60 60 % OF RESPONDENTS 50 40 30 20 10 0 SATISFIED DISSATISFIED NEUTRAL 10 30

Figure 4.13 INTERPRETATION It can be interpreted from the above table and chart that 60% of the respondents are satisfied with the payment system followed in the company i.e. piece rate payment

system. Where, 30% of the respondents are dissatisfied with this system. And 10% says that they are neither satisfied nor dissatisfied.

TABLE 4.14 IS NON MONETARY INCENTIVES NECESSARY FOR IMPROVING PERFORMANCE OPINION NO. RESPONDENTS YES NO SOMETIMES 75 30 45 OF % RESPONDENTS 50 20 30 OF

IS NON MONETARY INCENTIVES NECESSARY FOR PERFORMANCE IMPROVEMENT

30 YES 50 NO SOMETIMES

20

Figure 4.14

INTERPRETATION

It can be interpreted that majority of the respondents i.e.50% of the respondents feels that non monetary incentives are necessary for improving their performance because these leads to motivation of the employees. 20% respondents stated that non monetary incentives are not needed at all. But 30% says that for improvement in the performance, non monetary incentives are sometimes essential. TABLE 4.1 SATISFACTION WITH COMPENSATION SYSTEM OF COMPANY OPINION NO. RESPONDENTS FULLY SATISFIED NOT SATISFIED TO SOME EXTENT 105 30 15 OF % RESPONDENTS 70 20 10 OF

EMPLOYEES SATISFACTION WITH COMPENSATION SYSTEM OF COMPANY

% OF RESPONDENTS
80 60 40 20 0 FULLY SATISFIED NOT SATISFIED TO SOME EXTENT 70 20 10

Figure 4.15 INTERPRETATION It can be implied that on asking regarding satisfaction with compensation system of the company, 70% respondents showed their full satisfaction, 20% are not

satisfied, and remaining 10% are satisfied to some extent. It implies that most of the employees are satisfied with the prevailing compensation system. TABLE 4.16 EMPLOYEES FEEDBACK OR RATING FOR COMPANYS

COMPENSATION SYSTEM

SCALE

NO. RESPONDENTS

OF % RESPONDENTS 30 40 10 10 10

OF

EXCELLENT VERY GOOD GOOD AVERAGE NOT GOOD

45 60 15 15 15

RATING FOR COMPENSATION SYSTEM OF COMPANY

40 40 35 % OF RESPONDENTS 30 25 20 15 10 5 0 EXCELLENT VERY GOOD GOOD AVERAGE NOT GOOD 10 10 10 30

Figure 4.16

INTERPRETATION The above table and graph shows the feedback or the rating of the employees towards compensation system of the company. Where 30% of the respondents have rated companys compensation system of the company as excellent, 40% has rated as very good. 10% of the respondents stated that it is good. 10% consider compensation system as average. 10% respondents or 15 out of 150 respondents think that companys compensation system is not good. This shows that there is scope for improvement in the Compensation and Benefits Management System.

TOPIC 5

FINDING & SUGGESTION

5.0) FINDINGS
The major findings of the project are stated as: Majority of the respondents are satisfied with the compensation based on qualification and experience. Most of the respondents think that the organizations pay policy is clear, related to the salaries, pay and bonus. Almost all the respondent employees believed in performance based compensation system. More than Fifty percent of the respondents agreed that the Organization they work for provides pay in accordance with the job responsibilities they handle. Most of the respondents are willing to take additional responsibility, in case the compensation is increased. Some of the respondents feel that there exists bias in the compensation package of similar jobs within the organization. More than half of the respondents gave the rating for the Compensation and Benefits Management system of the company as GOOD. Only 10% respondents think that companys compensation system is not good and

there is need to make changes in the existing compensation and benefits package.

5.1) RECOMMENDATIONS
There needs to be more focus on employee potential and current performance while formulating the compensation and benefits package. Inclusion of good overtime pay package in the compensation, as work load is high during the project completion period. Also Compensation packages should be based on quantity, quality and impact of work. The Compensation has to be balanced properly across the employees of organization who have the same number of years of experience and also the nature of work being same. Provision of short term and medium term education course packages, helps the Competent employees to develop their skills and enhance their knowledge, which in turn helps the organization to grow. Monthly rewards for star performers should be included which will motivate the employees as for most of the employees, compensation play a crucial determinant.

5.2) CONCLUSION
Thestudy revealed the compensation system followed by HANDFAB.The results of the study indicate that with the changing organizational working patterns and employee needs,there is a need to bring in changes in the compensation systems of the company.Further the study reveals that perfect compensation system, with properly designed features like loyalty pay and Flexible Benefit Plan along with timely increments, andperformance incentives, leads to happy and satisfied workforce. The employees not only look for monetary benefits, but also look forward to various things like wok-life balance facilities, better amenities, better scope of advancement etc. So, there should also be non monetary incentives for employees which motivate the employees to put their best in work. The company can think of expansion and growth if it has the support unskillful, talented and happy workforce. Therefore a fair compensation system is required for every business organization.The sound compensation system is a good sign of organizations success and prosperity.

TOPIC 06

BIBLIOGRAPHY

BIBLIOGRAPHY
Books

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