1

A
RESEARCH PROJECT REPORT ON

Compensation System
A Comparison of G.S Auto Ltd. & SIL

Submitted by

Jasvinder jit singh

ROLLNO.90632234420
in partial fulfilment for the award of the
degree of

MASTER IN BUSINESS ADMINISTRATION

RIMT- INSTITUTE OF MANAGEMENT AND COMPUTER

TECHNOLOGY

PUNJAB TECHNICAL UNIVERSITY, JALANDHAR

( 2009-2011 )
 2

Acknowledgement

The Punjab University has introduced the research project for M.B.A students to get the practical
hand and to introduce us the environment of industry. Therefore, I Sukeshi (university roll no.
95072238791) has undergone my project at G.S. AUTO INTERNATIONAL LTD as a part of my
curriculum of Masters of Business Administration.

Firstly, I would like to pay my sincere thanks to my research guide lecturer Mrs.URVASHI Who
has been consent source of inspiration to me.

I am highly obliged and thankful to Sardar Jasbir Singh, Chairman of the company who with his
open hands welcomed me to do research. I also wish to express my deep gratitude to Mr.
M.S.Mangat (Personal Manager) for providing me valuable information to make this research
successful.

I the end, all go to my parents who were always my true sense of inspiration ad the cause of what
I am today. Moreover, thanks to all those who made this project successful.
 3

PREFACE

The highly competitive world of business demands much more than a theoretical knowledge, due
to this, a good practice oriented management course must include project work in curriculum, and
this would be an essential part of Masters of Business Administration degree course. As it is a
well-known fact that both, the theoretical knowledge and practical skills are being more weight
age comparatively, as it quite evident from the prevailing environment.

The lectures in the classroom are no doubt instrumental I understanding the fundamental
concepts of management and they also facilitate the learning process but their application I real
life situation remains doubtful. Therefore, in order to achieve the effective results the classroom
learning needs to be effectively wedded to the realities of the practical situations.

How far the concept if management are applicable in real life situations can only be judged by
having a first hand experience so to develop healthy managerial and administrative skills. The
potential managers to the theoretical knowledge with the real business environment and enable
the management students to have a feeling of the working condition and atmosphere under which
they will have to work. In the future, the research work becomes a essential and indispensable
part of Masters of Business Administration course.

So to know about all these I have made my research project on `Compensation`. A sincere effort
has been made to being about the lucid facts and I hope that this report meets the given
expectation ad various requirement of the research.
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CERTIFICATE

This is to certify that jasvinder jit singh, Roll No. 90632234420 has done the Major
Research Project entitled ‘Compensation System – Comparison of G.S. Auto Ltd. & SIL’
under my supervision for the fulfillment of the degree of Master of Business Administration. The
work done by her is a sole effort & has not been submitted as or its part for any other degree.

MRS. URVASHI VASHIST

Lecturer

Department of Business Administration

RIMT-maec

Mandi Gobindgarh.

INDEX

CHAPTER NO. TITLE PAGE NO.

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1. Company Profile

i)G.S. Auto

ii)Shreyans Paper Mills

2. Compensation Introduction

3. Review of Literature

4. Research Methodology

5. Data Analysis and Interpretation

=> Objectives of Study

6. Findings, Limitations and Recommendations

7. Conclusion of Study

(i) Bibliography

(ii) Annexure
 6

Chapter 1
(Company Profile)

Introduction

Gone are the days when it took months to travel room one place to another but today thanks to
modern science ad technology, which has decreased the distance, now any one can reach
anywhere in the world. Thanks to Auto companies.
 7

In spite of mega advance I science and technology people are running short of time. Everyone is
racing against time all this has led to an increase in the demand for automobiles, ranging from
luxuries cars to large ad more advanced commercial vehicles.

Seeing this demand and potential to grow, the Indian automobile industry has been extensively
liberalized and due to this, the sales and production of automobiles have doubled, the number of
manufacturing and the choice of model in the automobile market has more than double the
standards of quality, customer expectations,

Awareness and even dealer services have considerably improved, and surprise of surprise now.

You ca get almost ay automobile off the shelf ay time. However, just manufacturing automobiles
is o longer a singular achievement. The most important aspect of present time is the demand of
such auto parts which are of high quality and which can pass through stringent conditions of its
applications.

ORIGIN of AUTOMOBILIES

The history of automobile actually began about 4000 years ago when the first wheel was used for
transportation India. Several Italians recorded designs for wind-driven cars. The first was Guido
th
da Vigevano in 1335. I early 15 century the Portuguese arrived in China and the interaction of
two led to a variety of new technologies, including the creation of a wheel that turned under its
own power. By the 1600s small steam powered engine modals were developed but it was another
country before a full sized engine powered automobile was created.

The automobile was a four-wheeled vehicle powered by an internal combustion engine and used
primarily for the transportation of people. In the early 1800s, other inventors also experimented
with this idea and the steam-powered vehicle was put into production in Europe and the US. A
 8

breakthrough in developing gas-powered automobiles came in 1860, when an internal

combustion engine was patented in France. However, a prototype of the twentieth century
automobile was not "born" until 1885 when Germans Gottlieb Daimler (1834–1900) and Carl
Benz (1844–1929) (working independently of each other) developed the forerunners of the gas
engines used today. In 1891–1892 a French company, Pan hard et Levassor designed a front-
engine, rear-wheel drive automobile. This concept remained relatively unchanged for nearly one
hundred years. In 1896, the Duryea Motor Wagon Company turned out the United States' first
production motor vehicle. The gas-powered cars were available for purchase that same year..
However, the first decades of the 1900s saw the U.S. auto industry take the lead, establishing
Detroit, Michigan, as Motor City, U.S.A.

In 1908, Ford Motor Company (established 1903) produced the first dependable, easily
maintained, and widely affordable automobile—the Model T. American consumers bought
17,000 Model Ts the year they were introduced at the price of $850. The popularity of the "Tin
Lizzie" (it was also nicknamed the "Flivver") was met by stepped-up production: In 1917 Ford
produced 700,000 Model Ts. The innovation of the moving assembly line (1914) steadily
improved production time. This resulted in lowering of manufacturing costs and the decrease of
the price of the car to the consumer (in 1924 the Model T sold for just $295).

HISTORY of AUTOMOBILE in INDIA

Since the first car rolled out on the streets of Mumbai (then Bombay) in 1898, the Automobile
Industry of India has come a long way. During its early stages the auto industry was overlooked
by the then Government and the policies were also not favorable. The liberalization policy and
various tax relief’s by the Govt. of India in recent years has made remarkable impacts on Indian
Automobile Industry. Indian auto industry, which is currently growing at the pace of around 18 %
per annum, has become a hot destination for global auto players like Volvo, General Motors and
Ford.

The automobile industry comprises of heavy vehicles (trucks, buses, tempos, tractors); passenger
cars; and two-wheelers. Tata-Telco, Ashok Leyland, Eicher Motors, Mahindra and Mahindra, and
Bajaj dominate heavy vehicles section. The major car manufacturers in India are Hindustan
Motors, Maruti Udyog, Fiat India Private Ltd., Ford India Ltd., General Motors India Pvt. Ltd.,
 9

Honda Siel Cars India Ltd., Hyundai Motors India Ltd., and Skoda India Private Ltd., Toyota
Motors, Tata Motors etc. The dominant players in the two-wheeler sector are Hero Honda, Bajaj,
TVS, Honda Motorcycle & Scooter India (Pvt.) Ltd., and Yamaha etc.

In the initial years after independence, Indian automobile industry was plagued by unfavorable
government policies. All it had to offer in the passenger car segment was a 1940s Morris model
called the Ambassador and a 1960s Suzuki-derived model called the Maruti 800. The automobile
sector in India underwent a metamorphosis because of the liberalization policies initiated in the
1991. Measures such as relaxation of the foreign exchange and equity regulations, reduction of
tariffs on imports, and refining the banking policies played a vital role in turning around the
Indian automobile industry. Until the mid 1990s, the Indian auto sector consisted of just a handful
of local companies. However, after the sector opened to foreign direct investment in 1996, global
majors moved in. Automobile industry in India also received an unintended boost from stringent
government auto emission regulations over the past few years. This ensured that vehicles
produced in India conformed to the standards of the developed world.

Indian automobile industry has matured in last few years and offers differentiated products for
different segments of the society. It is currently making inroads into the rural middle class market
after its inroads into the urban markets and rural rich. In the recent years Indian automobile
sector has witnessed a slew of investments. India is on every major global automobile player's
radar. Indian automobile industry is also fast becoming an outsourcing hub for automobile
companies worldwide, as indicated by the zooming automobile exports from the country. Today,
Hyundai, Honda, Toyota, GM, Ford and Mitsubishi have set up their manufacturing bases in
India. Due to rapid economic growth and higher disposable income, it is believed that the success
story of the Indian automobile industry is not going to end soon.
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COMPANY PROFILE of G.S. AUTO

In 1956, Babba Gurumukh Singh in Ludhiana founded GS Auto. By his professional expertise
and commercial and service approach, the company soon became a leader in the automotive
components manufacturing field, making truck repair and heavy repair parts. In 1990, Sardar
Paramjit Singh (M.D.), an efficient and dynamic manager, founded B.G.S. Auto Pvt. Ltd. With his
technical competence, the organization started manufacturing highly compatible universal joints
crosses, for trucks, cars, van jeeps etc. to fill the technical gap in the market for the clients'
benefit. The organization today is head by his son Sardar Manraj Singh, the proprietor of the
company with a positive approach towards the highly competitive International market
developing and reconfirming the faith of customer worldwide.

A loyal staff and future-oriented creative management make sure that the enterprise has been able
to preserve its excellent reputation internationally. With a rational structure, talented expertise
and technical knowledge acquired over the years, the company makes sure that the best of quality
output isdelivered.
 11

They have registered a steep growth in their business and have earned the recognition of being
one of the most efficient and reliable manufacturing companies catering to the domestic markets
in Punjab, Haryana, Guwahati, Calcutta, Maharashtra, Jammu, Karnataka, Madhya Pradesh.,
Rajasthan, Gujarat etc. They also cater to the international markets of U.A.E., Iran, Libya, Syria,
Germany, America, Russia, Afghanistan, Holland, Malaysia, Kenya, Uganda, Egypt, Nigeria and
Australia.

Products:
They are Manufacturer, Traders and Exporter of automotive components such as auto steering
parts, jeep steering parts, universal joints etc.

1. Steering Parts: - Auto Steering Parts for cars, vans, jeeps etc. -Steering Assembly Parts for
light and heavy commercial vehicles: - Steering Parts for agriculture vehicles and equipment.
-Steering Parts for off road commercial vehicles.

2. Universal Joints: - For light & heavy commercial vehicles -With four ground round bearings:-
With four plain round bearings. -With two welded plates & two plain round bearings. -With four
welded plates: - With two ground and two plain round bearings. For agricultural machinery -With
outside seal UJ Crosses -UJ Crosses with inside seal

3. UJ Crosses: - For off road / heavy earth moving machinery & vehicles – U j Crosses with four
wing bearings. –U j Crosses with two-wing bearing & two ground bearings:-With two wing
bearings and two plain round bearings. –U j Crosses with two welded plates and two high wing
bearings
 12

IMPORTAT LANDMARKS

1938: Start business actively

1973: Govt. converted into Pvt. Ltd. Company

Gurumukh Sigh & Son’s Pvt. Ltd on 29 June.

1985: Renamed as G.S Auto international ltd. on 5 August.

1990: Rayait Exports was established to cater to export market.

1997: ISO 9002 certification in March by BVQI, U.K.

1999: QS 9000 certification I Dec. by BVQI, U.K.

2003: Re-certified QS9000 I June by BVQI, U.K

2005: ISO/TS 16949 certification I April by BVQI, U.K.

2006: a) Commissioning of transfer line (14 station with twin robotic arms)

To manufacture spring pins (first its kind in Asia-pacific)

b) Formation of GS Automotives Ltd. to manufacture caste components.

c) International business tie up with V. Orland

of Italy to introduce their.

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d) Establishment of G.S auto comp Ltd. To market

Various automotive companies of G.S. group and supporting companies.

e) Manufacturing facility at Tata Nagger, Jamshedpur.

2007: Trailer Excels.

G.S AUTO ITERNATIOAL COMPANY LTD.

LIST of BOARD of DIRECTORS As on 30th MAY 2009

Chairperson

Sardar Jasbir Singh

MANAGING DIRECTOR

Sardar Surider Singh

DIRECTORS

Ms. Dalbider Kaur

Ms. Amarjeet Kaur

Mr. Makhan singh

Mr. Sewa singh

 14

PRODUCT RANGE

They specialize in Suspension Components (Machined, Forged and Cast) for Commercial
vehicles (LCVs, MCVs and HCVs ) and passenger Cars for various makes/ models of Vehicles:

For Indian Market:

They have a range of following components for

Tata
Ashok Leyland
Maruti, Swaraj Mazda
Hindustan Motors Ltd.
VOLVO
Mahindra & Mahindra etc.

For Overseas markets:

They have components for Volvo, Mercedes, Scania, Hino, Peykan and other trailers and trucks.
They develop components based on Customer's Specifications and Drawings and provide
Designing solutions to our customers for enhanced product performance and improved quality.
 15

GROUP COMPANIES

1. G.S. Automotive (P) Ltd.:

At G.S. Automotive Limited, a team of 1000 young dedicated technicians work in close co-
operation with each other and have succeeded in bringing to our customers these Automotive
components, unchallenging in quality and workmanship.

2. G.S. Auto camp (P) Ltd.:

Group Company is manufacturing propeller shafts and suspension components. Also markets
auto parts manufactured y other smaller companies of G.S cluster in Indian market.

3. G.S Foods.:

One of the leading companies of northern India established in 1999 dealing in packaged food
products.
 16

SOCIAL CONCERN

1. EDUCATION:-

Children , the future of our nation, have the right to receive attention and proper
nurturing. The human approach of GS is manifested I the activities of education ad social
concerns

Its having following institutes:

 Guru Nanak public school

 Ramgarhia Girls College

 Ramgarhia Middle School

 Ramgarhia Senior Secondary School

2. MEMBERSHIP:-

GS group participate I the activities of important and international association via -

 Society of Automotive Engineers, USA

 Confederation of Indian Industry (CII)
 Engineering Export Promotion Council
 Auto parts Manufacture Association, Ludhiana
 Institute of Professional Innovators, Detroit
 17

DEPARTMENTAL ANALYSIS

1. Production Department

Mr. V.K. Sharma handles the production department, president of plant. Approx 5000 employees
are working under him. He has one general manager Mr. Sanghotra and two senior i.e. Mr.
Raman and Mr. Ranbir under him.

For this Mr. Sharma with help of his senior engineers has designed two machines and working on
designing more machinery in order to increase the capacity of plant.

Functions:-

 To provide maximum goods as per the demand.

 To provide quality products to its customers.

 To update themselves from time to time in order to remain in competition.

2. Personal & Administration Department

Mr. M.S. Mangat, GM, one assistant manager handle Personal & Administration
department and five other employees assist him. They check daily attendance of resource by
employing the right man at the right place. The workers are treated as family members aspiring to
achieve goals of company.
 18

Functions:-

 To harmonize the relations between the management and workers.

 To increase the productivity of workers.

 Development of employees at all levels of the organization through continues

training and education

 A sense of belongings is created among workers, which drives them to excel in

their activities and enables G.S Autos to attain new heights.

3. FINANCE and ACCOUNTS DEPARTMENT

Mr. Niraj Tuli heads this department 10 other employees assist him in handling day to day
finance of G.S Autos. Earlier company has relied heavily on bank loans and borrowings.

In 1992, the company declared a sick unit but now it has turned into financially strong company
still there is lot that is to be done in this field.

Functions:-

 Procurement of funds, which is done through banks, own generation and timely
realization from customers.

 Proper utilization of funds.

 19

4. Department Electronic Data Processing

This is one of the most important departments of the company. This department helps in
providing the information to all the departments’ e.g., if marketing department wants to check the
sales trend then they can check the sales trend, they can check it either items wise, part wise or
city wise.

Functions:-

 The main objective of EDP department is to provide service, which all departments
require in the area of computerization.

 They are responsible for implementation of documented quality system in EDP

department and provide assistance in troubleshooting. They are responsible for identifying
continuous improvement and communicate to concern to HOD’s.

5. Purchase Department

The purchase department procures all the materials right from pin to vast machinery.

Five other employees assist Sr. Basant Singh heads the department.

Functions:-

 To ensure purchased material quality.

 Vendor department evaluation.

To provide material at right time.

 20

6. Marketing Department

Marketing includes all sets of activates necessary to direct and simplify the flow of goods and
services from manufacturing to consumers through distribution network.

To facilitate all activities Mr. Anadi Sharma heads marketing department. Who is assistance by
10 other employees of department, their main functions to market the company products,
providing services to the customers, creating demand for the developed products and discovering
and translating consumer’s needs and desires into products and services.

SWOT Analysis of G.S AUTO

Ø Strengths

 All India Presence

 Brand Pull
 21

 Better organized as compared to competitor’s

Ø Weaknesses

 Fragmented

 Prices are high as compared to other Manufacture

Ø Opportunities

 Growing Market

 All VM’s increasing their Production

 Difficult Business Environment for SME’s Player

Ø Threats

 Load Restrictions

 New Entrants at Local and Regional Levels

 Improvement in Vehicles Quality

 Increasing Prices of Steels

 Freight Trains

 Foreign Competition

COMPANY PROFILE OF SHREYANS INDUSTRIES LIMITED

Shreyans Papers, the flagship company of Shreyans Group was incorporated in 1978. The
company commenced the commercial production of writing and printing papers in 1982 using
agricultural residues with an installed capacity of 10,000 MTs per annum.

SHREYANS PAPER:
 22

Before 1987, this company was under the management of Vardhman Group. In 1987 under a
family settlement, this company was taken over by Mr. D.K Oswal. Subsequent to this, numbers
of modernization-cum-expansion schemes were taken up at Ahmedgarh unit and present capacity
stands at 45,000 MTs per annum, which existed in 1987. This unit is considered as market leader
in agro based paper mills of the country and is one of the most modern plant and machinery set
up. This unit has been recipient of Productivity Awards instituted by National Productivity
Council for five years. On environmental front this unit was first in Asia to set up a Chemical
Recovery Plant suitable for agro based units which was part financed by USAID. This unit meets
all the standards as laid down by various environmental laws and is fully compliant.

CAUSTIC RECOVERY:

During 1995, the company implemented a scheme for recovery of caustic soda at an estimate cost
of Rs 113 Million. The scheme was to give two-fold benefit

• Reduce the cost of caustic Lyle

• Reduce the pollution level of water being discharged from the unit.
The scheme was completed in 1996. The caustic recovery of the company has been operating
satisfactorily. The company has been utilizing the caustic recovery facilities for production of
soda ash as the company do not possess the required equipment for the extraction of caustic soda
from black liquor (by product of the paper pulp making process) & also because, on account of
current market conditions, the extraction sale of soda ash is more beneficial than the extraction &
captive consumption of caustic soda. The company has been recovering approximately 85% of
soda ash & selling the same in the open market.
CO- GENERATION:
Both paper divisions have Co-generation plants attached to them and meet almost 90% of their
power requirement through these plants at very economical cost. The total combined capacity of
the Company is 78,000 MTs per annum.

COMPANY EXPANSION:
In the meanwhile, encouraged by the experienced gained in paper industry, the company took
over a paper division of M/S Zenith Limited (A Ashok Birla Group Company) in February 1994.
 23

At the time of takeover, the capacity of the unit was 9,000 MTs per annum which has been raised
to 33,000 MTs per annum now. Major expansion-cum-modernization project was taken in this
unit has been raised the capacity to preset level.

TYPES OF PAPERS:
Shreyans produces different varieties of writing and printing papers for different uses including
waste mark papers, super calendar and other varieties of papers for various state Government,
Education Boards, Shreyans also produces the inland letter and envelop papers to be used for
postal and special papers for railways for their computerized tickets. Keeping in view the market
condition, Company has introduced new quality papers named High-Bright Super Printing Papers
in Ahmedgarh unit and Crystal paper in Banah unit

Shreyans is always ready to give top-level services to its customers ad is very friendly to
environmental to produces a paper without cutting ay tree or bamboo.

MANAGEMENT PROFILE of SIL

BOARD OF DIRECTORS
SH. RAJNEESH OSWAL, Chairman and Managing Director
SH. VISHAL OSWAL, Vice Chairman and Managing Director
SH. ANIL KUMAR, Executive Director and C.E.O.
SH. KUNAL OSWAL
SH. A.K. CHAKRABORTY, Additional Director
Mr. S.K. SHARMA, Director (Technical)
 24

DR. (MRS.) H.K. BAL

SH. R.C. SINGAL
SH. M.L. GUPTA

COMPANY SECRETARY
MR. VIPIN KUMAR BHATIA

BANKERS
STATE BANK OF PATIALA
BANK OF INDIA
STATE BANK OF MAURITIUS

WORKS
1. SHREYANS PAPERS, AHMEDGARH, DISTT. SANGRUR (PB.)
2. SHREE RISHABH PAPERS, VILLAGE BANAH, DISTT. NAWANSHAHAR (PB.)
 25

Chapter 2
(Compensation Introduction)

COMPENSATION

Workers' compensation is a form of insurance that provides compensation medical care for
employees who injured in the course of employment, in exchange for mandatory relinquishment
of the employee's right to sue his or her employer for the tort of negligence. The tradeoff between
assured, limited coverage and lack of recourse outside the worker compensation system is known
as "the compensation bargain." General damages for pain and suffering, and punitive damage for
employer negligence, are generally not available in worker compensation plans.

Employees' compensation laws are usually a feature of highly developed industrial societies,
implemented after long and hard-fought struggles by trade unions. Supporters of such programs
believe they improve working conditions and provide an economic safety net for employees.
 26

Conversely, these programs often criticized for removing or restricting workers' common-law
rights (such as suit in tort for negligence) in order to reduce governments' or insurance
companies' financial liability. These laws first enacted in Europe and Oceania, with the US
following shortly thereafter.

With the technological developments taking place at a higher rate, the salary packages are too
increasing at a much higher rate. Pay packages in India have witnessed an increase of more than
14% in 2006 over last year’s salary packages. The compensation package comprises of monetary
and non-monetary benefits that includes salary, special allowances, house rent allowance, travel
allowance, mobile allowance, employee stock options, club memberships, accommodations,
retirement benefits and other benefits.

A wage is compensation, usually financial, received by workers in exchange for their labor.

Compensation in terms of wages given to workers and compensation in terms of salary is given to
employees. Compensation is a monetary benefit given to employees in return for the services
provided by them.

Salary is a form of periodic payment from an employer to an employee, which may be specified
in an employment contract. It is contrasted with piece wages, where each job, hour or other unit is
paid separately, rather than on a periodic basis.

From the point of a business, salary can also be viewed as the cost of acquiring HR for running
operations, and is then termed personnel expense or salary expense. In accounting, salaries are
recorded in payroll accounts.

Acc. to the national commission on labor :-

“Wages incentives are extra financial motivation. They are designed to stimulate human effort by
rewarding the person, over and above the time rated remuneration for improvements in the
present or targeted results”
 27

Wages and salary administrative affect levels of employee commitment to the organization’s
large part of the compensation that people receive from work is monetary. Wage and salary
administration has increased as industrialized economies have become more complex.

In the evolution of economies, the role of financial rewards has grown.

Administration of employee compensation is called wage and salary administration.

Acc. To S.P. ROBBINS:-

“The term compensation administration or wages and salary administration denotes the process
of managing a company’s compensation programmed. The goals of compensation administration
are too design a cost-effective pay structure that will attract, motivate and retain competent
employees

Key Features

§ Determines optimum payout structures with powerful modeling tools

§ Customizes your payout schedules

§ Presents product and revenue analyses

§ Provides firm, branch, and investment professional rankings

§ Provides daily, month-to-date, and year-to-date commissions tracking

§ Captures historical data

Benefits

1. Gives you a competitive advantage by helping reduce costs while improving investment
professional profitability and productivity

2. Enables you to easily evaluate performance and quickly adjust compensation

3. Facilitates an optimum payout structure.

28
29
 30

AMOUNT OF COMPENSATION:-

The amount of compensation depends upon:-

1. The nature of the injury caused by accident

2. The monthly wages of the worker

3. The relevant factors for working out lump sum equivalent of

compensation amount as specified

Under this compensation is payable for:-

1. Death

2. Permanent total disablement

3. Permant partial disablement

4. Temporary disablement

Compensation for death:-

50*monthly wages* relevant factor for age 20

100

Or Rs. 80,000 which ever is greater

Compensation for permanent total disablement

60*monthly wages*relevant factor for age 20

100

Or Rs. 90,000 which ever is greater

Compensation for permanent partial disablement

60* monthly wages*relevant factor for age20

40% of 100
 31

CHAPTER 3
(Review of Literature)

Review of Literature
 32

STEVE WERNER & STEPHAINE G. WORD (1996) JAMES H. DULEBOHN

& STEPHEN E. WERLING (2007)

Past compensation, research has reflected organization character & personnel practices that had
an internal rather than an external focus. Internal labor market typically characterized
organizational following up until the 1980s. Consequently, compensation research focused on
issues related to managing compensation in this type of structure that emphasized areas such as
internal equity job evaluation &individual reaction to pay. Recent changes in the environment
have resulted in a greater role of external factors, such as external competitiveness on
compensation practice. While practitioners today have more of an external focus in compensation
system design, present compensation research has not kept pace. In the following paper we argue
there is a need to redirect future compensation research to include a consideration of external
factors.

They review the literature of compensation & compensation related issues within the field of
management. After reviewing 6867 articles include 20 top journals over the past 7 years 396
articles were group in 12 categories. Upon synthesis of these articles, we analyze the linkage
across these categories & also suggest areas for future research. We conclude with some
observation on the current state of compensation research.

MARYLENE GAGNE &JACQUES FOREST (2003)

 33

Although compensation specialist generally argue for incentives systems that link rewards to
performance, self determination theory argues that such contingent rewards can have determinant
effects on autonomous motivation. The authors present a model of the motivational effects of
compensation system that attempts to reconcile the awards. We replaced a nearly fixed salary
academic physician compensation model with decision-based productivity. The base salary
system was stratified according to rank & clinical experience. The supplementary pay was linked
to electronic patient’s records & a scheduling database to awards point.

JANIKAN SUPANVANIJ & MARIA GOLATI (2008)

This research based on the performance management & executive compensation. This examines
the relation between corporate performance & executive compensation 1994-2005. Its also
examines whether the relationship various across industries. Economic value, market value added
methods as performance measures results show that the fixed managerial compensation are
linked to the firm performance differently there is no evidence related to long term compensation.
The form of compensation is also co-related with the firm compensation.

.
 34

CHAPTER-4
(Research Methodology)

RESEARCH METHODOLOGY

MEANING OF RESEARCH METHODOLOGY:

 35

Research is a common parlance refers to a search for knowledge. One can define research as a
Scientific Research and a systematic search for pertinent information on a specific topic. In fact
research is an art of scientific investigation.

According to Clifford Woody, “Research comprises defining an and redefining problems,

formulating hypothesis or suggested solutions, collecting, organizing and evaluating data making
and researching conclusions and at least carefully testing the conclusions to determine whether
they fit the formulating hypothesis.

Objectives of Research

 To gain familiarity with new insights.

 To portray accurately the characteristics of particular individuals, situation to a group.

 To determine the frequency with which something occurs or with it is associated with
something else.

 To test a hypothesis of a casual relationship between variables.

Research Design:

Research design constitutes the blueprints for the collection, measurement and analysis of data.
The design includes an outlay of the researches will do from writing the hypothesis and its
operational implications to the final analysis of data.

Need For research design:

Research Design is need because it facilitates the smooth sailing of the various research
operations, thereby making research as efficient as possible as yielding maximum
information with minimum expenditure of effort, time & money.
 36

Data Collection:

The task of data collections begins after a research problem has been defined and research
design is made. While declining about the method odd data collection, a researcher should
keep in mind two types of data i.e. primary and secondary

Primary Data:

Questionnaire Design: Items are generated based on studying the various aspects in books
and magazines and based on personal judgments.

A structured questionnaire covering important aspects of compensation, management

policies, personal and organizational factors that are responsible for compensation in the
organization.

Convenient Sample Size: - 80 people

Scope of the Study: - G.S Auto Ltd., Ludhiana. and Shreyans Industries Ltd.,
Ahmedgarh.

Secondary Data: It was collected from books, journals and company’s websites.
 37

CHAPTER-5
(Data Analysis and Interpretation)

Research Work at G.S. Auto Ltd.

 38

1 Compensation

What type of compensation provided to you by the company?

Response Percentage

Wage salary 60%

Incentive plan 0%

Fringe benefits 40%

TABLE-5.1

FIG-5.1

This table and figure shows that out of 80 employees get 60% benefit from wage
& salary compensation and 40% fringe benefits. However, the company ever
provides them the facility of incentive plans.

2 Fringe Benefit

What type of fringe benefits are provide to you by the company?

 39

Fringe benefits Percentage

Old age pension and retirement 0%

benefits

Travel expenses 60%

Bonus for quality and attendance 0%

Insurance 0%

Medical leave with pay 25%

Suggestion reward 15%

Universities and trade courses 0%

Health benefits 0%

This figure shows that the company provided Travel expenses 60%, Medical leave
with pay25%, Suggestion Reward 15%. The company also rovides the benefit of
bonus but it provide annually not for quality / Attendance. Medical & health
benefits are also provided to those who come under the ESI Act.

3 Time period
 40

In how much time you receive your compensation?

Time period Percentage

Week 0%

Month 0%

Yearly 0%

On due date 100%

TABLE-5.3

FIG.5.3

This table and figure shows that out of 80 people employees get their
compensation o the due date decided by the government.

4 Payments

Which method is used for your payments?

Types Percentage
 41

Time wage method 50%

Piece wage method 50%

Balance method 0%

TABLE-6.4

FIG-5.4
This table and figure shows that out of 80 employees according to their
departments receive their payments. Some departments use TIME WAGE METHOD
or some pay according to PIECE WAGE METHOD.

5.5 Compensation

Is compensation fixed or not?

Responses Percentage

Yes 100%

No 0%
 42

TABLE-5.5

FIG.5.5

This table and figure shows that out of 80 employees compensation is fixed for all
employees. It is according to their salary.

5.6 Incentives

According to you, incentive plans helps to improve in what manner?

Responses Percentage

Work flow 0%

Man machine relation 0%

Employee-employer relation 0%

Team work 0%

Minimization absenteeism 0%
 43

All above 0%

TABLE-5.6

Incentives
FIG.5.6
100%
%age of respondance

90%
80% There are no incentive systems. So
70%
60% they do not know about what
50% Series1
incentives help to improve in.
40%
30%
20%
10%
0%
Minimization
absenteeism
Employee-
Work flow

employer

5.7 Incentives

Do you want incentive plans?

Aspects
Responses Percentage

Yes 90%

No 10%

TABLE-6.7
 44

Incentives

Yes
No

FIG.5.7

This table and figure shows that 90% of employees want incentives.

5.8 Satisfaction

Are u Satisfied with your compensation?

Response Percentage

Yes 100%

No 0%

TABLE-5.8
 45

Sat isfac tion

Yes
No

FIG.5.8

This table and figure shows that out of 80 employees 100% employees are
satisfied with their compensation.

5.9 Wage Differential

According to you Wage Differential should be?

Response Percentage

Occupational Differential 55%

Inter-area Differential 25%

Inter- Firm Differential 12%

Inter-Personal Wage Differential 8%

TABLE-6.9
 46

WageDifferential

8%

12% Occupational Differential

Inter-areaDifferential

55% Inter- FirmDifferential

25%
Inter-Personal Wage
Differential

FIG.5.9

This table and figure shows out of 80 employees through my study 55%
employees says occupational differential, 25% employees Says Inter-Area
differential. 12% employees say Inter-Firm differential & 8% employees says Inter-
Personal differential. However, in OCM mill both Occupational and Inter-Area
differential are used.

5.10 Compensation Impact

Do you think the compensation have any impact on the goodwill of the company?

Response Percentage

Yes 100%

No 0%

TABLE-5.10
 47

FIG.5.10

out of 80 employees, 100% of employees says that the compensation always

affect on the goodwill of the company.

5.11 Pay to nomination

In case of death, should it be paid to your nominee?

Responses Percentage

Yes 100%

No 0%

TABLE-5.11
 48

Pay to nominee

120%

100%
% age of responses

80%

60% Series 1

40%

20%

0%
Y es No

FIG.5.11

This table and figure shows that out of 80 employees ,the company provides the
compensation to the nominee of the employee after his death.

Research work at Shreyans Industry Ltd.

Table 1

Compensation

What type of compensation provided to you by the company

Response Percentage

Wage and salary 50%

Incentive plans 0%
 49

Fringe benefits 50%

This table and figure shows that the company provided 100% facility of wages and
salary compensation and fringe benefits to the workers.

Table 2

Fringe Benefits

What type of fringe benefits provide to you by the company?

Fringe benefits Percentage

Old age pension and retirement benefits 0%

Travel expenses 20%

Bonus for quality and attendance 0%

Insurance 0%

Medical leave with pay 40%

Suggestion reward 0%

Universities and trade courses 0%

 50

Health benefits 40%

This table and figure shows that company provides just two fringe benefits medical leave with pay and
health benefits. These facilities cover all workers those comes under the ESI act.

Table 3

Time period

After how much time you get your compensation?

Time period Percentage

Weekly 0%

Monthly 0%

Yearly 0%

On due date 100%

 51

This table and figure shows that all the employees receive their compensation on their due date. The
central or state government mentions the date.

Table 4

Payments

Which method is used for your payments?

Types Percentage

Time wage method 40%

Piece wage method 60%

Balance method 0%
 52

This table and figure shows that employees according to their departments receive their
payments. Some departments use TIME WAGE METHOD or some pay according to PIECE
WAGE METHOD.

Table 5

Compensation

Is compensation fixed or not?

Responses Percentage

Yes 100%

No O%
 53

Compensation fixation

Yes
No

This table and figure shows that compensation is fixed for all employees. But its fixed with attendance.

Table 6

Incentives

According to you incentive plans helps to improve in what manner?

Responses Percentage

Work flow 0%

Man machine relation 0%

Employee-employer relation 0%

Team work 0%

Minimization absenteeism 0%

All above 0%
 54

Incentives

100%
90%
%age of respondance

80%
70%
60%
50% Series1
40%
30%
20%
10%
0%
Work flow

Employee-

Minimization
absenteeism
employer

Aspects

This table and figure shows that there are no incentive plans in SIL.

Table 7

Incentives

Do you want incentive plans?

Responses Percentage

Yes 30%

No 70%
 55

Incentives

Yes
No

This table and figure shows that 30% workers want incentives but 70% don not want.

Table 8

Satisfaction

Are u Satisfied with your compensation?

Response Percentage

Yes 80%

No 20%
 56

This table and figure shows that all workers are satisfied with their compensation.

TABLE 9

Wage Differential

According to you Wage Differential should be?

Response Percentage

Occupational Differential 52%

Inter-area Differential 6%

Inter- Firm Differential 32%

Inter-Personal Wage Differential 10%

 57

Wge differential

Occupational
Differential
6%

Inter-area
32% Differential

52% Inter- Firm

Differential

10% Inter-Personal
Wage
Differential

This table and figure shows that 52% workers think that the occupational differential is the major Wage
Differential.

Table 10

Compensation Impact

Do you think the compensation have any impact on the goodwill of the company?

Response Percentage

Yes 15%

No 85%
 58

90% 85%

80%

70%

60%

50%
Series1
40%

30%

20% 15%

10%

0%
Yes No

This table and figure shows that only 15% workers agree with it that the compensation affect the
Goodwill of the company.

Table 11

Pay to nomination

In case of death, should it pay to your nominee?

Responses Percentage

Yes 100%

No 0%
 59

This table and figure shows that the company provides the compensation to the nominee of the employee
after his death.

OBJECTIVES OF THE RESEARCH

 To study the compensation system in G.S Auto and Shreyans Industries Ltd.

 To study the satisfaction level of employees with regard to compensation system in G.S Auto and
Shreyans Industries Ltd.

 To study the importance of incentives plans for workers.

 To study the impact of timely and adequate compensation on goodwill of G.S Auto and Shreyans
Industries Ltd.

 To study the time gap with regard to receipt of compensation by employees.

 60

CHAPTER-6
 61

FINDINGS, LIMITATIONS

AND

RECOMMENDATIONS

Findings

1. Fringe Benefits and Wage Salary are provided to workers in G.S. Auto and SIL.

2. There are no Incentive plans in G.S. Auto and SIL.

3. Fringe Benefits like Old Age Pension, Retirement benefits and Bonus for Quality &
Attendance and University & Trade Courses are not provided in both the companies.

4. There are no Insurance plans in both companies.

5. Compensation is providing to workers on the due date in both the Companies.

6. All most all the workers in G.S. Auto want Incentives.

7. All are satisfied with their compensation, which puts a positive impact on the Goodwill of
the company.
 62

8. All the worker want that there compensation should pay to their nominee after death.

Limitations

1. Proper information was not provided regarding the Base Compensation.

2. Respondents Age was concealed.

3. There was biasness among the respondents while filling the questionnaire.

4. The Supervisors chose the respondents.

5. Respondents were not so interested to fill the questionnaire.

 63

RECOMMENDATIONS

1. There should be Incentive plans in G.S. Auto and SIL to increase employee Moral.

2. There should be Insurance plans in G.S. Auto ad SIL for the protection of employees.

3. There should be University & Trade Courses for the workers in G.S. Auto.

4. There should be some benefits at the time of Retirement.

5. There should be Bonus for Quality & Absenteeism.

 64

CHAPTER-7
(Conclusion of Study)
 65

CONLUSION OF THE STUDY

From my research about Compensation System in both the companies, I conclude that workers in
both the companies are satisfied with their compensation. However, there is no Insurance and
Incentives given to the workers. Company should provide to workers Insurance Plan and
Incentive Plans to increase the moral of the workers. Compensation is provided to workers on a
due date which is a good factor for the Goodwill of the companies. There should bonus for
quality and University & Trade Courses for the worker`s improvement.
 66

BIBLIOGRAPHY

1 VSP Rao, ‘ Human Resource Management’

2 www.compensation related links
3 www.hrmguide.com-HRM related articles, features, links
4 http://www.ocm.in
5 http://www.google.co.in
 67

QUESTIONAIRRE

Name: Age:

Sex: Marital status:

Occupation:

1. What type of compensation provided to you by the company?

a) Wage and salary compensation

b) Incentive compensation

c) Fringe benefits

2. What type of Fringe Benefits provided to you by the company?

a) Old age pension and Retirement Benefit.

b) Travel expenses

c) Bonus for quality & Attendance

d) Insurance plan

e) Medical pay with leave

f) Universities & Trade Course

g) Health Benefits

3. After how much time you get your compensation?

a) Weekly

b) Monthly

c) Yearly
 68

d) On due date

4. Which method is used for payments?

a) Time based system

b) Piece based system

c) Balance Method

5. Is compensation payment fixed or not?

a) Yes

b) No

6. According to you incentive plans helps to improve in?

a) Work flow

b) Man-machine relation

c) Employee- employer relation

d) Team work

e) Minimize absenteeism

f) All of the above

7. Do you want Incentive plans?

a) Yes

b) No

8. Are you satisfied with your compensation?

a) Yes

b) No
 69

9. According to you wage differentials may be?

a) Occupational differentials

b) Inter-term differentials

c) Inter-area differentials

d) Inter- personal wage differential

10.Do you think the compensation impact on the goodwill of the company?

a) Yes

b) No

11.In case of death should it to be paid to your nominee or not?

a) Yes

b) No
70