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The document discusses compensation and benefits, providing an introduction to key concepts. It defines compensation as all forms of pay arising from employment. Compensation objectives are outlined as efficiency, fairness, and compliance. The pay model is introduced as having three building blocks: compensation objectives, policies like internal alignment and external competitiveness, and techniques like job evaluation. Various forms of pay like base wage, incentives, and benefits are described. Non-financial returns like recognition are also noted as part of total compensation.
The document discusses compensation and benefits, providing an introduction to key concepts. It defines compensation as all forms of pay arising from employment. Compensation objectives are outlined as efficiency, fairness, and compliance. The pay model is introduced as having three building blocks: compensation objectives, policies like internal alignment and external competitiveness, and techniques like job evaluation. Various forms of pay like base wage, incentives, and benefits are described. Non-financial returns like recognition are also noted as part of total compensation.
The document discusses compensation and benefits, providing an introduction to key concepts. It defines compensation as all forms of pay arising from employment. Compensation objectives are outlined as efficiency, fairness, and compliance. The pay model is introduced as having three building blocks: compensation objectives, policies like internal alignment and external competitiveness, and techniques like job evaluation. Various forms of pay like base wage, incentives, and benefits are described. Non-financial returns like recognition are also noted as part of total compensation.
Meaning Gary Dessler, comp means all forms of pay or rewards going to employees and arising from their employment 4 perspectives: - Employer - Employee - Society - Stockholder By: Ms. Divya Prabhu P., Asst. Prof.@ MITE By: Ms. Divya Prabhu P., Asst. Prof.@ MITE By: Ms. Divya Prabhu P., Asst. Prof.@ MITE Forms of Pay Comp- all forms of financial returns and tangible services and benefits employees receive as a part of an employment relationship.
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Base wage (Basic) Paid for work performed Reflects value of ur work/skills Ignores differences btn individual e/e Wage/sal no much diff
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Merit Pay Increments to base pay in recognition of past work behaviour May or may not have formal evaluation
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Cost of living adjustment Like DA Increases to everyone irrespective of performance
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Incentives Directly based on perf Doesnt increase the base- re-earned each period Tries to influence future behavior unlike merit pay thats rewards past behaviour Can be given to indivi, team, buz unit or combi Obj: bring down cost, increase perf, volume, custo sats, revenues, ROIs, stk value etc By: Ms. Divya Prabhu P., Asst. Prof.@ MITE Income protection Legal requirements Ex.: insurance, healthcare, retirement etc Cheaper than e/e s can obtain them for themselves.
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Work life balance Prgms that help in integrating wk and life responsibilities Vacations Financial planning activities Telecommuting Sabbaticals, work schedule flexibility To ensure e/e are fully present at work
Non financial returns Effects e/e behaviour substantially Recognition E/t security Challenging work Learning opportunities
These are part of the total returns much
broader than total compensation
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE The Pay Model (vvv imp) Framework for examining the current pay systems. 3 building blocks: - Compensation objectives - Policies forming foundation of comp sys - Techniques in comp sys Now, refer the chart
Basic objectives as per the Pay Model Efficiency Fairness Compliance
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Efficiency To improve perf Increase the quality Delight customers and stockholders Control labour costs
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Fairness Fundamental obj To treat all employees fairly by recognising their contribution and needs
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Compliance Conforming to law Globally and locally Legally comply with rules and regulations
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Policy choices Guidelines for managing the Pay to accomplish the objectives Internal alignment External competitiveness Employee contributions Management of the pay system
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Internal alignment Relates to pay rates both for employees doing equal work and for those doing dissimilar work What is the pay for what job? It affects the objectives- are the e/e paid fairly? Complying to law? Also affects the workforce capabilities and efficiency. Basically a comparison among jobs & skill levels inside a single orgtn. By: Ms. Divya Prabhu P., Asst. Prof.@ MITE External competitiveness Compare pay with competitors How much do we wish to pay in comparison to what other e/r s pay and also of what mix we use? (mix- base, inc, stock, benefits etc) Impacts both efficiency and fairness
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
E/e contributions How much do you emphasise on merit/ perf? Affects e/e attitudes and work behaviours Usage of team-based pay and corporate profit sharing plans by companies brings a sense of belongingness amongst e/e. Affects fairness
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Management What is the policy in place to manage the pay system? Are right people getting the right pay? Are the right objectives achieved in the right way? 3Cs- Cost, communication and change
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Techniques Techniques tie the policies to the objectives Job analysis and evaluation Market definition and surveys Various incentive programs etc..
By: Ms. Divya Prabhu P., Asst. Prof.@ MITE
Best Practices v/s Best Fit The better the fit, the greater is the competitive advantage. Few disagree.. On the contrary, a set of best pay practices which are applied universally results in better performance with any strategy. Having a best pay practice makes an orgtn gain superior e/es leading to competitive advantage. But the challenge is which are the best practices??? By: Ms. Divya Prabhu P., Asst. Prof.@ MITE Guess what this means.. By: Ms. Divya Prabhu P., Asst. Prof.@ MITE By: Ms. Divya Prabhu P., Asst. Prof.@ MITE Some relevant messages for LIFE..