CHAPTER - I

TOPIC INTRODUCTION

Compensation defined

Compensation can be defined as all of the rewards earned by employees in return for their
labour. This includes:

 Direct financial compensation consisting of pay received in the form of wages,

salaries, bonuses and commissions provided at regular and consistent intervals
 Indirect financial compensation including all financial rewards that are not included
in direct compensation and can be understood to form part of the social contract between the
employer and employee such as benefits, leaves, retirement plans, education, and employee
services
 Non-financial compensation referring to topics such as career development and
advancement opportunities, opportunities for recognition, as well as work environment and
conditions

In determining effective rewards, however, the uniqueness of each employee must also be
considered. People have different needs or reasons for working. The most appropriate
compensation will meet these individual needs. To a large degree, adequate or fair
compensation is in the mind of the employee.

A good compensation strategy includes a balance between internal equity and external
competitiveness. Compensation and benefits affect the productivity and happiness of
employees, as well as the ability of your organization to effectively realize its objectives. It is
to your advantage to ensure that your employees are creatively compensated and
knowledgeable of their benefits.

Total Compensation = Direct + Indirect Compensation

Base Pay Incentives Benefits

Compensation decisions are influenced by both internal and external factors:

 Internal:
o financial conditions

o corporate/managerial philosophy

o corporate strategy/life cycle

 External:
  labor market factors

o area wages/cost of living

o collective bargaining agreements

o government regulations

 Fair Labor Standards Act (1938)

 Equal Pay Act (1963)

All organizations face three basic compensation decisions:

A. Pay-Level Decision:

 Are we going to lead, meet, or lag the market?

 Comparison: Employees working on similar jobs in other
organizations

B. Pay-Structure Decision:

 How do we determine differences in pay for various jobs in our

organization?
 Comparison: Employees working on different jobs within the
organization

C. Individual Pay Determination:

 How do we determine how much to pay various people in our

organization?
 Comparison: Employees working on the same jobs within the
organization
Four Types of Job Evaluation Systems

1. Ranking Systems

2. Classification (Job Grade) Systems

3. Point Systems

4. Factor Comparison Systems

AIM AND OBJECTIVE OF THE STUDY

Human beings within the organization control and manage materials and other
resources in the organization in order to achieve the organizational goals and objectives.
As a result of this, it is imperative for any organization that wants to be successful to
pay adequate attention to the needs of human beings who contribute to the
organizational success.
a. To examine the process of total compensation system
in the organization
b. To examine the difficulties involved in implementing
the system.
c. To make recommendations on how best to apply the
system in the company

SCOPE OF COMPENSATION MANAGEMENT

In today’s world organizations tries more to assess the worth of an individual in terms of his
performance and contribution to the organizations. With the growing demand of workforce
and constant challenges in the business environment, organizations have to evolve and
accurate system for evaluating jobs and assessing their worth. Compensation management
helps to determine the relative worth of a job in an organization in a systematic, consistent
and accurate manner. It also helps in estimating the basic pay for each job in accordance with
the importance of the job in the organizational hierarchy .once a basic pay is determined , the
rewards , incentives and benefits attached worth the pay, positions and performance are also

determined . The basic wage, incentives and rewards and benefits, together form the
compensation package of an employee

HSBC is a reputed company giving employment to huge no. of people

around the world hence the study on compensation management in HSBC will help the
company, the employees, and the society in fairly manner.
RESEARCH METHODOLOGY.

Research is a systematic method of finding solutions to problems. It is essentially an

investigation, a recording and an analysis of evidence for the purpose of gaining knowledge.
According to Clifford woody, “research comprises of defining and redefining problem,
formulating hypothesis or suggested solutions, collecting, organizing and evaluating data,
reaching conclusions, testing conclusions to determine whether they fit the formulated
hypothesis”

Sample Size.

Number of the sampling units selected from the population is called the size of the sample.
Sample of 100 respondents were obtained from the population.

Methods of Data Collection.

The data’s were collected through Primary and secondary sources.

Primary Sources.

Primary data are in the form of “raw material” to which statistical methods are applied for the
purpose of analysis and interpretations.

The primary sources are discussion with employees, data’s collected through questionnaire.

Secondary Sources.

Secondary data’s are in the form of finished products as they have already been treated
statistically in some form or other.
The secondary data mainly consists of data and information collected from records, company
websites and also discussion with the management of the organization. Secondary data was
also collected from journals, magazines and books.

Nature of Research.

Descriptive research, also known as statistical research, describes data and characteristics
about the population or phenomenon being studied. Descriptive research answers the
questions who, what, where, when and how.

Although the data description is factual, accurate and systematic, the research cannot describe
what caused a situation. Thus, descriptive research cannot be used to create a causal
relationship, where one variable affects another. In other words, descriptive research can be
said to have a low requirement for internal validity.

Questionnaire.

A well defined questionnaire that is used effectively can gather information on both overall
performance of the test system as well as information on specific components of the system.
A defeated questionnaire was carefully prepared and specially numbered. The questions were
arranged in proper order, in accordance with the relevance.

Nature of Questions Asked.

The questionnaire consists of open ended, dichotomous, rating and ranking questions.

Pre-testing

A pre-testing of questionnaire was conducted with questionnaires, which were distributed and
all of them were collected back as completed questionnaire. On the basis of doubts raised by
the respondents the questionnaire was redialed to its present form.

Sample

A finite subset of population, selected from it with the objective of investigating its properties
called a sample. A sample is a representative part of the population. A sample of 100
respondents in total has been randomly selected. The response to various elements under each
questions were totaled for the purpose of various statistical testing.
Variables of the Study.

The direct variable of the study is the employee retention.

Indirect variables are the incentives, interpersonal relations, career development opportunities
and performance appraisal system.

Presentation of Data.

The data are presented through charts and tables.

LIMITATIONS OF THE STUDY

During this research work a lot of constraints and limitations were encountered. Some of
these constraints were usual constraints encountered during the course of such academic
exercise while some were unusual and boring. Collection of primary data for this study was a
major constraint, as the researcher has to be on the field personally in all the data collection
processes. The company’s branches are scattered all over the country and to make a
comprehensive investigation, all the sites were visited.
Financial constraints also posed a major problem/limitation during the
investigation. The researcher would have wanted to carry on the same type of investigation in
a similar firm within the same industry but for financial constraints. Time is another
limitation encountered during the course of the study. Time constraints have forced the
researcher to concentrate on compensation system instead of spreading the study to the entire
personnel administration. Sometimes, secondary data collected were not reliable, hence they
were rejected. A lot of time was spent on the selection and examination of secondary data for
the study.

CHAPTER – II

COMPANY PROFILE

INDUSTRY PROFILE:

The banking section will navigate through all the aspects of the Banking System in India. It
will discuss upon the matters with the birth of the banking concept in the country to new
players adding their names in the industry in coming few years.

The banker of all banks, Reserve Bank of India (RBI), the Indian Banks Association (IBA)
and top 20 banks like IDBI, HSBC, ICICI, ABN AMRO, etc. has been well defined under
three separate heads with one page dedicated to each bank.

However, in the introduction part of the entire banking cosmos, the past has been well
explained under three different heads namely:
 History of Banking in India
 Nationalisation of Banks

in India

 Scheduled Commercial Banks in India

The first deals with the history part since the dawn of banking system in India. Government
took major step in the 1969 to put the banking sector into systems and it nationalised 14
private banks in the mentioned year. This has been elaborated in Nationalisationof Banks in
India. The last but not the least explains about the scheduled and unscheduled banks in India.
Section 42 (6) (a) of RBI Act 1934 lays down the condition of scheduled commercial banks
. The description along with a list of scheduled commercial banks are given on this page.

The partition of India in 1947 adversely impacted the economies of Punjab and West Bengal,
paralyzing banking activities for months. India's independence marked the end of a regime of
the Laissez-faire for the Indian banking. The Government of India initiated measures to play
an active role in the economic life of the nation, and the Industrial Policy Resolution adopted
by the government in 1948 envisaged a mixed economy. This resulted into greater
involvement of the state in different segments of the economy including banking and finance.
The major steps to regulate banking included:

 In 1948, the Reserve Bank of India, India's central banking authority, was
nationalized, and it became an institution owned by the Government of India.
 In 1949, the Banking Regulation Act was enacted which empowered the Reserve
Bank of India (RBI) "to regulate, control, and inspect the banks in India."
  The Banking Regulation Act also provided that no new bank or branch of an existing
bank could be opened without a license from the RBI, and no two banks could have
common directors.

However, despite these provisions, control and regulations, banks in India except the State
Bank of India, continued to be owned and operated by private persons. This changed with the
nationalisation of major banks in India on 19 July 1969

Currently, India has 96 scheduled commercial

banks (SCBs) - 27 public sector banks (that is with the Government of India holding a stake),
31 private banks (these do not have government stake; they may be publicly listed and traded
on stock exchanges) and 38 foreign banks. They have a combined network of over 53,000
branches and 49,000 ATMs. According to a report by ICRA Limited, a rating agency, the
public sector banks hold over 75 percent of total assets of the banking industry, with the
private and foreign banks holding 18.2% and 6.5% respectively
COMPANY PROFILE

HSBC Holdings plc is a United Kingdom-based public limited company incorporated in the
UK in 1990 following its name change from The Hongkong and Shanghai Banking
Corporation, and headquartered in London since 1993.[1] As of 2009, it is both the world's
largest banking group and the world's 6th largest company according to a composite measure
by Forbes magazine.[3][4] Hong Kong served as the bank's headquarters until 1992 when it
moved to London as a condition of completing the acquisition of Midland Bank and as the
handover of Hong Kong's sovereignty approached.[5] Today, whilst no single geographical
area dominates the group's earnings, Hong Kong still continues to be a significant source of
its income. Recent acquisitions and expansion in China are returning HSBC to part of its
roots.[6] HSBC has an enormous operational base in Asia and significant lending, investment,
and insurance activities around the world. The company has a global reach and financial
fundamentals matched by few other banking or financial multinationals.[7]

HSBC is listed on the London, New York, Hong Kong, Paris and Bermuda Stock Exchanges,
and is a constituent of the FTSE 100 Index and the Hang Seng Index.

History

Development of the bank

HSBC (originally the "The Hongkong and Shanghai Banking Corporation") was founded
in Hong Kong (March) and Shanghai (one month later) in 1865. HSBC Holdings was
established in 1990 and became the parent company to The Hongkong and Shanghai Banking
Corporation in preparation for its purchase of Midland Bank and a change of domicile for the
transfer of sovereignty of Hong Kong. Shares in HSBC Holdings, which gave HSBC a
substantial presence in the UK, was completed in 1992. As part of the takeover conditions for
the purchase of Midland, HSBC was required to move its world headquarters from Hong
Kong to London in 1993.

Major acquisitions in South America started with the purchase of Banco Bamerindus of
Brazil for $1bn in March 1997[8] and the acquisition of Roberts SA de Inversiones of
Argentina for $600m in May 1997.[9]

HSBC World Headquarters designed by Norman Foster in London, United Kingdom.

In May 1999 HSBC embarked on a major acquisition in the United States with the purchase
of Republic National Bank of New York for $10.3bn.[10]
Expansion into Continental Europe took place in April 2000 with the acquisition of Crédit
Commercial de France, a large French bank for £6.6bn.[11]

In July 2001 HSBC bought Demirbank, an insolvent Turkish bank.[12] Then in August 2002
HSBC acquired Grupo Financiero Bital, SA de CV, Mexico's third largest retail bank for
$1.1bn.[13]

The new headquarters of HSBC Holdings at 8 Canada Square, London officially opened in
April 2003.[14]

Then in September 2003 HSBC bought Polski Kredyt Bank SA of Poland for $7.8m.[15]

In June 2004 HSBC expanded into China buying 19.9% of the Bank of Communications of
Shanghai.[16]

In the United Kingdom HSBC acquired Marks & Spencer Retail Financial Services Holdings
Ltd for £763m in December 2004.[17]

Acquisitions in 2005 included Metris Inc, a US credit card issuer for $1.6bn in August[18] and
70.1% of Dar Es Salaam Investment Bank of Iraq in October.[19]

In April 2006 HSBC bought the 90 branches in Argentina of Banca Nazionale del Lavoro for
$155m.[20]

In December 2007 HSBC acquired The Chinese Bank in Taiwan.[21]

In May 2008 HSBC acquired IL&FS Investment, an Indian retail broking firm.[22]

Subprime crisis

In November 2002 HSBC expanded further in the United States. Under the chairmanship of
Sir John Bond, it spent £9bn (US$15.5bn) to acquire Household Finance Corporation (HFC),
a US credit card issuer and subprime lender.[23] In a 2003 cover story, The Banker noted
"when banking historians look back, they may conclude that [it] was the deal of the first
decade of the 21st century".[24] Under the new name of HSBC Finance, the division was the
second largest subprime lender in the US.[25]
In March 2009, HSBC announced that it would shut down the branch network of its HSBC
Finance arm in the U.S., leading to nearly 6,000 job losses and leaving only the credit card
business to continue operating.[26][27]

Chairman Stephen Green stated, "HSBC has a reputation for telling it as it is. With the
benefit of hindsight, this is an acquisition we wish we had not undertaken."[28]; analyst Colin
Morton said, "the takeover was an absolute disaster".[27][29]

Although it was at the centre of the subprime storm, the wider group has weathered the
economic crisis better than other global banks. According to Bloomberg, "HSBC is one of
world’s strongest banks by some measures."[30] When HM Treasury required all UK banks to
increase their capital in October 2007, the group transferred £750 million to London within
hours, and announced that it had just lent £4 billion to other UK banks.[31] In March 2009, it
announced that it had made US$9.3bn of profit in 2008 and announced a £12.5bn
(US$17.7bn; HK$138bn) rights issue to enable it to buy other banks that were struggling to
survive.[32] However, uncertainty over the rights' issue's implications for institutional investors
caused volatility in the Hong Kong stock market: on 9 March 2009 HSBC's share price fell
24.14%, with 12 million shares sold in the last few seconds of trading.[33]

Global product lines and programmes

Group Service Centres

The HSBC Global Technology Centre in Pune, India develops software for the entire HSBC
group[41].

As a cost saving measure HSBC is offshoring processing work to lower cost economies in
order to reduce the cost of providing services in developed countries. These locations take on
work such as data processing and customer service, but also internal software engineering at
Pune, Hyderabad (India), Vishakhapatnam (India), Kolkata (India), Guangzhou (China), and
Curitiba (Brazil).

Chief Operating Officer Alan Jebson said in March 2005 that he would be very surprised if
fewer than 25,000 people were working in the centres over the next three years: “I don’t have
a precise target but I would be surprised if we had less than 15 (global service centres) in
three years’ time.” He went on to say that each centre cost the bank from $20m to $30m to set
up, but that for every job moved the bank saves about $20,000 (£10,400).[42]

Trade unions, particularly in the US and UK, blame these centres for job losses in developed
countries, and also for the effective imposition of wage caps on their members.[42]

Currently, HSBC operates centers out of eight countries, including Brazil (Curitiba), The
Czech Republic (Ostrava), India (Kolkata, Hyderabad, Bangalore, Visakhapatnam, Mumbai,
Gurgaon and Pune), China (Shanghai, Guangzhou and Shenzhen), Malaysia (Kuala Lumpur),
Poland (Krakow), Sri Lanka (Rajagiriya) and Philippines (Manila). The Malta trial for a UK
high value call centre has resulted in a growing operation that country. An option under
consideration is reported to be a processing centre in Vietnam to access the French skills of
the population and therefore cut costs in the bank’s French operations.

On June 27, 2006, HSBC reported that a "small number" of customers had suffered from
fraud totaling £233,000 after an employee at the Bangalore call centre supplied confidential
customer information to fraudsters.[43]

HSBC Private Bank

HSBC Private Bank [44] is the group's private banking operation, providing private banking
and trustee services to wealthy individuals and their families worldwide. The Private Bank
has in excess of 60 offices worldwide, with the major centres being Miami, New York,
London, Geneva and Hong Kong.
HSBC Premier Centre, Ikebukuro, Japan.

HSBC Premier

HSBC Premier[45] is the group's premium financial services product. The exact benefits and
qualification criteria vary depending on country, but typically require deposits and
investments of at least $100,000, £50,000, or €100,000. Alternatively those who have an
individual annual income of at least £100,000 paid into their HSBC Premier Bank Account
and are a customer of the bank's Independent Financial Advisory Service. Customers have a
dedicated Premier Relationship Manager, global 24 hour access to call centres,free banking
services and preferential rates. A HSBC Premier customer receives the HSBC Premier
services in all countries that offer HSBC Premier, without having to meet that country's
qualifying criteria.

HSBC Bank International

HSBC Bank International[46] is the offshore banking arm of the HSBC Group, focusing on
providing offshore solutions and cross border services to expatriates and migrants. It provides
a full range of multi-currency personal banking services to a range of customer segments,
including a full internet banking and telephone banking service. Sometimes referred to as
"HSBC Offshore", the business also offers independent financial planning, and has
representative offices all over the world, often working alongside local HSBC operations in
those regions.

HSBC Bank International originated from the business started by Midland Bank and is based
in the Channel Islands with further operations on the Isle of Man. Its operations in the
Channel Islands are centred around its registered headquarters on the seafront in St Helier,
Jersey. Named 'HSBC House', the building comprises departments such as Premier, Global
Funds & Investments, e-Business and a 24 hour 'Direct Banking Centre'.

HSBCnet

HSBCnet[47] is a global service that caters to local business needs by offering specialised
functionality for different regions worldwide.

The system provides access to transaction banking functionality - ranging from payments and
cash management to trade services features - as well as to research and analytical content
from HSBC. It also includes foreign exchange and money markets trading functionality.

The system is used widely by HSBC's high-end corporate and institutional clients served
variously by the bank's global banking and markets, commercial banking and global
transaction banking divisions.

HSBCnet is also the brand under which HSBC markets its global e-commerce proposition to
its corporate and institutional clients.

HFC Bank (UK Operation) is a wholly owned subsidiary, with 135 High Street branches in
the UK selling loans to the "sub-prime" market. During 2007 and 2008, has been trying to
fend off a union recognition campaign by the Trade Union Unite.

[edit] HSBC Direct

HSBC Direct is a telephone/online direct banking operation which attracts customers through
mortgages, accounts and savings. It was first launched in the USA[48] in November 2005 and
is now available in Britain, Canada,[49] Taiwan[50], South Korea[51] and France. Poland is
launching business direct in September 2009.
Brand and advertising

The group announced in November 1999 that the HSBC brand and the hexagon symbol
would be adopted as the unified brand in all the markets where HSBC operates, with the aim
of enhancing recognition of the group and its values by customers, shareholders and staff
throughout the world

Sponsorship

Mainly sponsor national and international games and sports mainly football and other
tournaments.

HSBC is the official banking partner of the Wimbledon Tennis Championships, providing
banking facilities on site and renaming the Road to Wimbledon junior event, as The HSBC
Road to Wimbledon National 14 and Under Challenge.[54]

Customer groups

HSBC splits its business into four distinct groups:

Personal financial services

HSBC provides more than 100 million customers worldwide with a full range of personal
financial services, including current and savings accounts, mortgage loans, car financing,
insurance, credit cards, loans, pensions and investments. HSBC was recently rated the worst
in customer service by Forrester Research, which asked bank customers to rank their banks.
[55]

Commercial banking

HSBC provides financial services to small, medium-sized and middle-market enterprises. The
group has almost 2.5 million of such customers, including sole proprietors, partnerships,
clubs and associations, incorporated businesses and publicly quoted companies.

Global banking and markets

Private banking
Main article: HSBC Private Bank
HSBC Private Bank is the marketing name for the private banking business conducted by the
principal private banking subsidiaries of the HSBC Group worldwide. HSBC Private Bank,
together with the private banking activities of HSBC Trinkaus, known collectively as Group
Private Banking, provides services to high net worth individuals and their families through 93
locations in some 42 countries and territories in Europe, the Asia-Pacific region, the
Americas, the Middle East and Africa. As of December 2007, profits before tax were
US$1,511 million and combined client assets under management were US$494 billion.

In September 2008, HSBC announced that it would combine its two Swiss private banks
under one brand name in 2009, with HSBC Guyerzeller and HSBC Private Bank to be
merged into one legal entity, under the newly appointed CEO of HSBC Private Bank,
Alexandre Zeller.[56]

Latin America

HSBC Mexico SA
 · HSBC Bank Brazil SA, Banco Multiplo
 · HSBC Bank Argentina SA
 · HSBC Bank Chile SA

Asia Pacific

The Hongkong and Shanghai Banking Corporation Ltd

 · Hang Seng Bank Ltd
 · HSBC Bank (China) Company Ltd
 · HSBC Bank Malaysia Berhad

Middle East

HSBC Bank Middle East Ltd

 · HSBC Bank Egypt SAE
 · The Saudi British Bank
North America

HSBC Bank USA Inc

 · HSBC Finance Corporation
 · HSBC Bank Canada

Europe

HSBC Bank plc

 · HSBC France
 · HSBC Trinkaus und Burkhardt AG
 · HSBC Private Bank (UK) Ltd

HSBC Bank, India

HSBC Bank is a subsidiary of HSBC Holdings plc, a London based banking giant which,
according to the Forbes magazine, is the largest banking group in the world, and the 6th
largest company in the world as of April 2009. HSBC Holdings had been established in Hong
Kong in the year 1990 as the parent company to the Hongkong and Shanghai Banking
Corporation (HSBC). Further, the bank moved its headquarters from Hong Kong to London.

Key Atributes
With a loan-deposit ratio of 90%, HSBC Bank is said to be one of the five British banks that
claim to have more deposits than loans. Such a high loan-deposit ratio of the bank has been
able to retain the trust of its investors and customers, keeping them assured of its financial
strengths. The sound financial position of the bank can also be attributed to the fact that its
stocks maintained relatively high price even during the credit crunch phase, something not
commonly seen to have happened to other banks.

Presence In India
In India, the introduction of HSBC Bank can be dated as early as the year 1853, with the
establishment of the Mercantile Bank of India in Mumbai. Currently, HSBC Group operates
through a number of its subsidiaries in India, viz. The Hongkong and Shanghai Banking
Corporation Limited (HSBC), HSBC Asset Management (India) Private Limited, HSBC
Global Resourcing / HSBC Electronic Data Processing (India) Private Limited, HSBC
 Insurance Brokers (India) Private Limited, HSBC Operations and Processing Enterprise
(India) Private Limited, HSBC Private Equity Management (Mauritius) Limited, HSBC
Professional Services (India) Private Limited, HSBC Securities and Capital Markets (India)
Private Limited and HSBC Software Development (India) Private Limited. The group carries
out its Commercial Banking, Banking Technology, Asset Management, Global Resourcing,
Insurance and Data Processing operations in the country through its subsidiaries.

Commendable Achievements
HSBC Bank is well known for having established the first ATM (Automatic Teller Machine) in India in
the year 1987. As of April 2009, the bank is present in many prominent cities of the country including
Mumbai, New Delhi, Bangalore, Hyderabad,

HSBC Bank History

HSBC Bank History includes a wide range of acquisitions and expansions around the world.
Hong Kong and Shanghai Banking Corporation Limited, the founding member of The
HSBC Group, was established in 1865 in order to finance the increasing trade between
China, India and Europe. The key person behind the founding of HSBC bank was Thomas
Sutherland who was then working with the Peninsular and Oriental Steam Navigation
Company. A strong demand for banking needs was realized by Thomas with the growing
trade on the China coast. With his help, Hong Kong and Shanghai Banking Corporation was
established in Hong Kong in March 1865 and a month later in Shanghai.

HSBC Group History

HSBC Group has a unique international pedigree and many of the principal companies were
established for business more than a century ago. Soon after its establishment in Hong Kong
the bank expand its branches and agencies all over the world. The network of HSBC began
to spread as far as North America and Europe. It then soon became a pioneer in offering
modern banking services in a number of nations. In 1888, HSBC became the first bank to be
ever established in Thailand and it printed the first bank notes for the country. In 1866,
HSBC opened its Japan branch that acted as the adviser to the government of banking and
currency of the country.

HSBC Holdings plc History

On the other hand, HSBC Holdings is a public limited company established in England in
1990 and headquartered in London from 1993. It is the parent company of the Hong Kong
and Shanghai Banking Corporation and its headquarters were located in Hong Kong until
1992, when it was obliged to move with the acquisition of the Midland Bank. In 2009, it was
announced as the largest banking group and 6th largest company by the Forbes Magazine.
HSBC history in China, India and various other countries in Asia Pacific involves a number
of acquisitions that enables the bank to expand its branches and subsidiaries. The following
are some of major acquisitions made by HSBC International.

 1980 - HSBC acquired 51% of shares in Marine Midland Bank based in New York.
 1987 - The bank fully owns the Marine Midland Bank.

 1999 - HSBC acquired the Republic National Bank and relocated its Head Office
from Buffalo to 452 Fifth Avenue New York.

 2003 - The bank acquired Household International.

Today, HSBC Group has their presence in all the major financial markets of the world
such as the Americas, Europe and Asia-Pacific. The bank has 8,500 offices in around 86
countries with 210,000 shareholders and over 128 million customers worldwide. It has
become the world's leader in providing a huge variety of banking and financial services
ranging from personal banking, business and corporate services, private banking and a
number of international services.

HSBC History Wall

Moreover, the bank has developed the HSBC History Wall, which is a visual record of its
history. This visual record was developed in London for the Group's headquarters. In
3,743 images, this History Wall showcases the rich and diverse pedigree of the HSBC
Group. Visitors can see a number of historical images depicting major acquisitions and
expansions undertaken by the financial services firm. To find more details on HSBC
historical exchange rates, share price, stock price, prime rates, historical base rates and
variable rate, logon to the official website of the bank.
 

 
Employee Volunteering
Employees are encouraged to participate in the community projects supported by HSBC. HSBC launched
Employee Volunteering in India in 2007 in a new format to enhance volunteering participation. The
progammme has been named ‘Catalyst’ and has being deployed across HSBC branches and Group
Companies in India

Projects - Education
HSBC partners with non–governmental organizations across country that works with children from
underprivileged communities. Our support helps children go to school and learn in a joyful environment.
Some of the educational projects supported by HSBC in India.

HSBC Bank Hyderabad is well reputed commercial banks in the city. It is an international
bank and it offers world class personal and business financial services which include personal
banking, corporate banking as well as deposit products. HSBC Hyderabad has one main
branch and about 3 ATMs in the city. HSBC in Hyderabad runs Group Service centers for
Global Resourcing.

Common Customer Care no. for HSBC Bank Hyderabad: 2335 8686

Phone no. for HSBC India Credit Card for Hyderabad: 2335 8787

Address of HSBC Hyderabad branch:

6-3-1107 & 1108, Raj Bhavan Road, Somajiguda, Hyderabad-500082

Services provides by HSBC Bank Hyderabad:

HSBC Bank in Hyderabad offers a world class banking services to its customers – it ranges
from personal banking, business banking, corporate banking as well as NRI services and
trade services.

HSBC bank provides:

 Credit cards and Debit cards

 Savings and Current Accounts along with fixed Deposits facility

 Loan facilities like Home Loans, Car loans, Personal loans.

 Insurance services like health insurance, medical insurance, retirement plans.

 Mutual Funds and Forex services.

 Investment services

 Internet and Self service banking.

 Application forms are available online to download for availing various services of
the bank.

The bank also provides the needed products and services that meet your business needs. It
provides a zero balance 24/7 current account for your business.
For business solutions, HSBC Bank Hyderabad provides:

 Business Credit – This is an overdraft without security at concessional rates.

  It also provides commercial banking.

 Services like cash management and factoring solutions are provided

 Global trade solutions are offered to get a edge in the competitive markets of today.

 Foreign exchange services provide information on global markets 24/7

NRI Banking services at HSBC Hyderabad include:

 NRI banking services are available in Canada, UK, USA, UAE, Singapore and Hong
Kong.
 Free Remittance to India is available.

 Online remittance demo is provided so that customers can self service.

HSBC Hyderabad is also involved bullion business through its office in Hyderabad and offers
up to date information of the markets to its coporate clients. Special attention is given on the
security and the transactions through the bank’s portal are 100% secure and trustworthy as it
has a center of data processing in Hyderabad for global resourcing.

The Official website for HSBC Bank in Hyderabad is http://www.hsbc.co.in and more
information about its services and products can be found in detail on this site.

WHAT WE DO

Financial Inclusion

Education
At HSBC we believe "Education is key to every success". Educational initiatives at HSBC
provide opportunities to underprivileged children to explore their untapped potential and
equip them with necessary skills and qualifications. Our project support helps children to go
to school, learn in a joyful environment and learn to live a healthy life. We also work with
young adults to provide vocational training and life skills so that they are able to help
themselves lead a productive life.
Life Skills
Life skills programmes supported by HSBC provides tailor made training to underprivileged
youth. Youth are enabled to gain access to opportunities for sustainable livelihoods and
financial literacy to help them lead a productive life.

Women’s Empowerment
The plight of women in rural India is well documented. The pressure on survival against the
backdrop of poor or no education, failing health, low agricultural productivity and
degradation of environment, affects women and children the most. In a majority of cases, in
the modern India of today, women are still unable to break out of vicious cycle of gender
bias, deprivation and victimization, imposed on them, sometimes by tradition, and at other
times by their economic environment and compulsions. One way of resolving this dilemma is
to devise financial literacy programmes, which intervene in the lives of rural poor women.
HSBC supports projects that provide entrepreneurial trainings and information access to
make dignified economic opportunities and self-sufficiency a possibility.

Microfinance
HSBC started with a lending programme for small MFIs in 2005, but after having built up a
reasonable degree of understanding of this segment, have started offering commercial loan
products to Large Microfinance Institutions (MFIs) also to help them provide micro credit to
the financially excluded in India. These institutions provide small loans to groups of poor
people (mostly women) using well-established micro credit delivery methodologies. We have
sanctioned facilities totalling INR 660M between Jan-Apr08 to MFIs and presently the total
number of members covered by MFIs, which have accepted our facilities, is 3.2M.

In 2008, we have put in place a microfinance strategy, with the objective of increasing our
presence in this segment and building around a lending portfolio, a host of services which can
facilitate capacity building, improve operational efficiency and bring the best practices of a
transactional banking business to the microfinance domain.

Environment
HSBC India supports nature, habitat and biodiversity conservation, water harvesting and
climate change initiatives. These projects are designed to ensure that economic development
does not take place at the expense of the environment and the awareness component ensures
that a large number of varied audiences are exposed to environmental messages.
 What we mean by Corporate Sustainability

At HSBC, sustainability means managing our business responsibly and sensitively, and ensuring we
include social, economic and environmental factors in the decisions we make to ensure long-term
business success. We believe it is our duty to our customers, investors and employees to foster an
ethical, responsible and sustainable corporate philosophy. Our goal is to be one of the world’s leading
brands in corporate sustainability.

Earth Sciences Forum – The first ever Public Private Partnership between HSBC, the
Ministry of Science and Technology, Ministry of Earth Sciences, Government of India to find
solutions to climate change by setting up leadership council, conducting industry specific
workshop, education and awareness programmes and communication outreach

HSBC Climate Partnership – Launched in India in January 2008 and will support
Earthwatch, WWF, The Climate Group and Smithsonian Tropical Research Institute, who
will collaborate with research institutions, businesses and individuals to combat the impact of
climate change on forests, freshwater, cities and people

HSBC Young Rangers – It will help children in 175 Schools in Mumbai and Pune to
understand the need to protect the environment and take small steps to combat climate change
in their schools and homes

Average employee rating from: 6 employee(s)

Overall rating 1.6

1.
Work Environment
8

1.
Job Security
7

1.
Recognition
0

1.
Work-Life Balance
3
Protection planning for expats
1.
Career Development Why is protection important?
5

2.
Salary & Benefits
0
You can’t predict the future. But you can protect the things that matter most – like your
family, lifestyle and wealth. And with the right protection in place, you don’t have to worry
so much about how your family would cope if you were critically ill, or in the event of your
death.

Life Insurance

Finding the right life insurance policy isn’t easy. And if you’re an expat, you need to make
sure your cover won’t be affected if you move to another country.

Our International Wealth Managers can help you ensure that your family will be financially
taken care of in the event of your death. They can tailor a policy to your needs, covering
things such as your home, your child / children’s education and providing support towards
your existing financial commitments.

Critical Illness cover

With the right critical illness cover, you could have protection to help pay your mortgage,
move home or look after your family if you’re unable to work.

As an expat, you need a portable policy that gives you financial security, wherever you’re
located.
CHAPTER – III

LITERATURE REVIEW

Literature review

Human Resource

William R. Tracey, in The Human Resources Glossary defines Human Resources as: "The
people that staff and operate an organization"; as contrasted with the financial and material
resources of an organization. Human Resources is also the organizational function that deals
with the people and issues related to people such as compensation, hiring, performance
management, and training. A Human Resource is a single person or employee within your
organization.

Human Resource Management (HRM) is the function within an organization that focuses on
recruitment of, management of, and providing direction for the people who work in the
organization. Human Resource Management can also be performed by line managers.

Human Resource Management is the organizational function that deals with issues related to
people such as compensation, hiring, performance management, organization development,
safety, wellness, benefits, employee motivation, communication, administration, and training.

Human resources is a term used to describe the individuals who comprise the workforce of
an organization, although it is also applied in labor economics to, for example, business
sectors or even whole nations. Human resources is also the name of the function within an
organization charged with the overall responsibility for implementing strategies and policies
relating to the management of individuals (i.e. the human resources). This function title is
often abbreviated to the initials 'HR'.

Human resources is a relatively modern management term, coined in the 1960s.[citation needed]
The origins of the function arose in organizations that introduced 'welfare management'
practices and also in those that adopted the principles of 'scientific management'. From these
terms emerged a largely administrative management activity, co-ordinating a range of worker
related processes and becoming known, in time as the 'personnel function'. Human resources
progressively became the more usual name for this function, in the first instance in the United
States as well as multinational corporations, reflecting the adoption of a more quantitative as
well as strategic approach to workforce management, demanded by corporate management
and the greater competitiveness for limited and highly skilled workers.
Functions

The Human Resources Management (HRM) function includes a variety of activities, and key
among them is deciding what staffing needs you have and whether to use independent
contractors or hire employees to fill these needs, recruiting and training the best employees,
ensuring they are high performers, dealing with performance issues, and ensuring your
personnel and management practices conform to various regulations. Activities also include
managing your approach to employee benefits and compensation, employee records and
personnel policies. Usually small businesses (for-profit or nonprofit) have to carry out these
activities themselves because they can't yet afford part- or full-time help. However, they
should always ensure that employees have—and are aware of—personnel policies which
conform to current regulations. These policies are often in the form of employee manuals,
which all employees have.

Note that some people distinguish a difference between HRM (a major management activity)
and HRD (Human Resource Development, a profession). Those people might include HRM
in HRD, explaining that HRD includes the broader range of activities to develop personnel
inside of organizations, including, e.g., career development, training, organization
development, etc.

There is a long-standing argument about where HR-related functions should be organized

into large organizations, e.g., "should HR be in the Organization Development department or
the other way around?"

The HRM function and HRD profession have undergone major changes over the past 20–30
years. Many years ago, large organizations looked to the "Personnel Department," mostly to
manage the paperwork around hiring and paying people. More recently, organizations
consider the "HR Department" as playing an important role in staffing, training and helping
to manage people so that people and the organization are performing at maximum capability
in a highly fulfilling manner.

WHAT ARE THE FUNCTIONS OF HRM IN ORGANISATIONS?

There are seven main functions of HR .

They are :

Function 1: Manpower planning

Function 2: Recruitment and selection of employees

Function 3: Employee motivation

Function 4: Employee evaluation:

Function 5: Organizational relations

Function 6: Provision of employee services

Function 7: Employee education, training and development

Features

Its features include:

 Organizational management
 Personnel administration

 Manpower management

 Industrial management

COMPENSATION MANAGEMENT

MEANING OF WAGE/ COMPENSATION PAYMENT:

            Wage is a monetary payment made by the employer to his employee for the work
done or services rendered.  It is a monetary compensation for the services rendered. A worker
may be paid Rs. 100 per day or Rs. 4500 per month. This is wage payment. The worker gives
his services and takes payment called wage payment. Industrial workers are paid
remuneration for their services in terms of money called wage payment. Wages are usually
paid in cash at the end of one day, one month or one week.  Money wage is the monetary
compensation or price paid by the employer to his employee for the services rendered. Such
compensation is also called wage or salary or reward given by an organisation to a person in
return to a work done.

              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 benefit and employee

services)

IMPORTANCE OF WAGE PAYMENT: 

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 labour 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 pressing
and persistent problem before the entire labour 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. E.g. In garment manufacturing
company if tailors 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. E.g. Reliance, Citi Bank,
Motorola are earned huge profits because of their higher pay packages.   

3.  To government:

                 Government also give special importance and attention to wages paid to industrial
workers as industrial development, productivity, industrial peace and cordial labour-
management relation 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. 
Government is the biggest employer in India and the wage rates of government servant and
employees of public sector organisations are decided by government only.  Revision of pay
scale of government employees made for adjusting their wages as per the cost of living.  For
this, “Pay Commission” is appointed and pay scale is adjusted as per the recommendations
made. 

             In India, wage payment is very critical, controversial and delicate issue for all
categories of work force. This is due to poverty, rising prices, mass unemployment and rising
population.  Wage payment indeed a vexatious problem and needs to be tackled from
economic, social and humanistic angles.    
 
 
 

CONCEPT OF FAIR WAGES: 

   Fair wages is the wage which is above the minimum wage but below the living wage.
Obviously 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 occupation

2. Prevailing rates of wages in the same region or neighbouring areas

3. Employers ability to pay

4. Level of national income and its distribution

5. Productivity of labour

6. Status enjoyed by the industry in the economy

               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 is 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.

                According to Encyclopaedia of social science,”Fair wages are equal to those

received by the workers performing work of equal skill, difficulty or unpleasantness.”  

Factors Influencing Wage And Salary Structure 

 The organization’s ability to pay:

Wage increases should be given by those organizations which can afford them.
Companies that 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 of labour:

 If the demand and certain skills are high and the supply is low the result is rise in the
price to be paid for these skills. The other alternative is to pay higher wages if the
labour 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 adjusted wages
to offset the erosion of real wages. However 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 since it is based on subjective opinion. 

 Job requirements:

Jobs are graded according to the relative skill responsibility and job conditions
required. 

 Trade unions bargaining power:

Trade unions do affect the rate of wages. Generally the stronger and more powerful
trade union, higher the wages. 

 Productivity:

Productivity is another criterion and is measured in terms of output man-hour. It is not

due to labour efforts alone. Technological improvements, greater ingenuity and skill
by the labour are all responsible for the increase in productivity. 

 Prevailing market rate:

This is also known as ‘comparable wages’ or ’going wage rate’. Reason behind this is
competition demand that competitors adhere to the same relative wage level. 

 Skill levels available in the market:

 With the rapid growth of industries, business trade there is shortage of skilled
resources. The technological development, automation has been affecting the skilled
levels at a faster rate. 

 Psychological and social factors:

This determine in a significant measure how hard a person will work for the
compensation received or what pressures he will exert to get his compensation
increased. 
 
 

Components Of Employee Remuneration 

The remuneration packet of an employee includes wage/salary, incentives, fringe benefits,

perquisites and finally non-monetary benefits

1. Wages and salary:

a. Wages represent hourly rates of pay, and salary refers to the monthly rate of
pay, irrespective of the number of hours put in by the employee. Wages and
salaries are subject to the annual increments. They differ from employee to
employee, and depend upon the nature of job, seniority, and merit.  

2. Incentives:

a. Incentives 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.There are: (a) Individual incentive schemes, and
(b) Group incentive programmes. Individual incentives are applicable to
specific employee performance. Where a given task demands group efforts for
completion, incentives are paid to the group as a whole. The amount is later
divided among group members on an equitable basis. 
3. Fringe benefits:
a. These are monetary benefits provided to employees. They 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. 

4. Perquisites:

a. There are special benefits offered to managers/executives. The purpose is to

retain competent executives.  Perquisites include the following: (a) Company
car for traveling, (b) Club membership, (c) Paid holidays, (d) Furnished house
or accommodation, (e) Stock option schemes, etc. 
b. 5.Non-monetary benefits:
c. These benefits give psychological satisfaction to employees even when
financial benefit is not available. Such benefits 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 and flexi-time.  
 
 Compensation is a systematic approach to providing monetary value to employees in
exchange for work performed. Compensation may achieve several purposes assisting in
recruitment, job performance, and job satisfaction.

Compensation is not the cut-and-dry subject it used to be. Once you had to worry only about
an employee's base salary or, at most, a base salary and commission. Today, you need to
think in terms of compensation packages - including salaries, stock options, employee stock
ownership plans, pay-for-performance plans, bonuses, profit sharing, commissions, non-cash
rewards, variable pay, and much more.
To recruit, retain, and motivate the best employees, you need to understand compensation and
reward plans and how they relate to your company's growth.
We'll help you get a handle on everything from settling on a compensation strategy to
creating a variable pay plan with this collection of checklists, benchmarks, and advice.
 
Compensation as Motivation
 The Power of Base 
A compensation expert explains how to improve your compensation strategy by developing
an effective, market-driven base pay system. Pay for Performance -- and Nothing Else
Employment relationships are transactional by nature. Today's transactions are fast moving,
short-term and fully exposed, as free agents negotiate with managers for project and contract
work. 
 Compensation Strategy
Recruiting Top Talent, One by One. This CEO tweaked her company's compensation
package over time to attract key managers. 
 Wage Wars.

EVOLUTION OF COMPENSATION:

Today’s compensation systems have come from a long way. With the changing
organizational structures workers’ need and compensation systems have also been
changing. From the bureaucratic organizations to the participative organizations,
employees have started asking for their rights and appropriate compensations. The
higher education standards and higher skills required for the jobs have made the
organizations provide competitive compensations to their employees.

Compensation strategy is derived from the business strategy. The business goals and
objectives are aligned with the HR strategies. Then the compensation committee or the
concerned authority formulates the
compensation strategy. It depends on both internal and external factors as well as the
life cycle of an organization.

                                Evolution of Strategic Compensation

Traditional Compensation Systems

In the traditional organizational structures, employees were expected to work hard

and obey the bosses’ orders. In return they were provided with job security, salary
increments and promotions annually. The salary was determined on the basis of the
job work and the years of experience the employee is holding. Some of the
organizations provided for retirement benefits such as, pension plans, for the
employees. It was assumed that humans work for money, there was no space for other
psychological and social needs of workers.

Change in Compensation Systems

With the behavioral science theories and evolution of labour and trade unions,
employees started asking for their rights. Maslow brought in the need hierarchy for
the rights of the employees. He stated that employees do not work only for money but
there are other needs too which they want to satisfy from there job, i.e. social needs,
 psychological needs, safety needs, self-actualization, etc. Now the employees were
being treated as human resource.

Their performance was being measured and appraised based on the organizational and
individual performance. Competition among employees existed. Employees were
expected to work hard to have the job security. The compensation system was
designed on the basis of job work and related proficiency of the employee.

                                           Maslow’s Need Hierarchy

Today’s Modern Compensation Systems
Today the compensation systems are designed aligned to the business goals and
strategies. The employees are expected to work and take their own decisions.
Authority is being delegated. Employees feel secured and valued in the organization.
Organizations offer monetary and non-monetary benefits to attract and retain the best
talents in the competitive environment. Some of the benefits are special allowances
like mobile, company’s vehicle; House rent allowances; statutory leaves, etc.
 
 Compensation defined

Compensation can be defined as all of the rewards earned by employees in return for their
labour. This includes:

 Direct financial compensation consisting of pay received in the form of wages,

salaries, bonuses and commissions provided at regular and consistent intervals
 Indirect financial compensation including all financial rewards that are not included
in direct compensation and can be understood to form part of the social contract between the
employer and employee such as benefits, leaves, retirement plans, education, and employee
services
 Non-financial compensation referring to topics such as career development and
advancement opportunities, opportunities for recognition, as well as work environment and
conditions

In determining effective rewards, however, the uniqueness of each employee must also be
considered. People have different needs or reasons for working. The most appropriate
compensation will meet these individual needs. To a large degree, adequate or fair
compensation is in the mind of the employee.

A good compensation strategy includes a balance between internal equity and external
competitiveness. Compensation and benefits affect the productivity and happiness of
employees, as well as the ability of your organization to effectively realize its objectives. It is
to your advantage to ensure that your employees are creatively compensated and
knowledgeable of their benefits.

TYPES OF COMPENSATION:

# DIRECT COMPENSATION:

Direct compensation refers to monetary benefits offered and provided to employees in

return of the services they provide to the organization. The monetary benefits include
basic salary, house rent allowance, conveyance, leave travel allowance, medical
reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a
regular interval at a definite time.
Basic Salary
 Salary is the amount received by the employee in lieu of the work done by him/her for a
certain period say a day, a week, a month, etc. It is the money an employee receives from
his/her employer by rendering his/her services.

Leave Policy

It is the right of employee to get adequate number of leave while working with the
organization. The organizations provide for paid leaves such as, casual leaves,
medical leaves (sick leave), and maternity leaves, statutory pay, etc.

Overtime Policy
Employees should be provided with the adequate allowances and facilities during
their overtime, if they happened to do so, such as transport facilities, overtime pay,
etc.

Hospitalization
The employees should be provided allowances to get their regular check-ups, say at
an interval of one year. Even their dependents should be eligible for the medi-claims
that provide them emotional and social security.

 
 Insurance
Organizations also provide for accidental insurance and life insurance for employees.
This gives them the emotional security and they feel themselves valued in the
organization.

Leave Travel
The employees are provided with leaves and travel allowances to go for holiday with
their families. Some organizations arrange for a tour for the employees of the
organization. This is usually done to make the employees stress free.

Retirement Benefits
Organizations provide for pension plans and other benefits for their employees which
benefits them after they retire from the organization at the prescribed age.
Holiday Homes
Organizations provide for holiday homes and guest house for their employees at
different locations. These holiday homes are usually located in hill station and other
most wanted holiday spots. The organizations make sure that the employees do not
face any kind of difficulties during their stay in the guest house.

Flexible Timings
Organizations provide for flexible timings to the employees who cannot come to
work during normal shifts due to their personal problems and valid reasons.

An ideal compensation system heavily depends upon the following factors:

Demand and Supply Position:

Each profession demands certain skills, technical education, personal qualities, and
experience to execute the job. If the demand is more and supply less, subsequently the
compensation to be paid will be high and vice-versa.
Nature of Business:

If the product or service is having the nature of yielding high profits, obviously the
compensation paid is comparatively higher than what is paid for in other low profit yielding
businesses.

Size of business:

Large organizations like international companies give higher compensation as compared to

small industries.

Current Sate of Industry:

Many units producing alike product form an industry. It is an accepted rule that unlike units
falling under the industry follow the current wage level in the industry. In the same way, the
pattern of compensation i.e. constituent of the pay package is approximately analogous with
little difference among these units.

Management Thinking:

Every organization (the people who run the business) has its own philosophy. Every business
has its own principles and thinking. Various organizations have great concern about the
employees and show a high sense of communal responsibility. They provide profusely non-
statutory welfare reimbursements to their employees. Even though the number is small, the
recompense to employees is better, regardless of the foregoing factors.

Disagreeability of the Job:

Certain jobs in contrast to others are unlikable for example, social workers, nurses, cleaners,
teachers, fire brigade, doctors, etc. their jobs have many diverse kinds of working
surroundings. Ability and skills of facing long hours of work, high pressure, stress,
 monotony, and continuous alertness are required by these jobs. Therefore, the accessibility of
persons for such job is less and as a result the preference is second or third. For such works,
the compensation has to be attractive.

An employee who makes $35,000 a year may be happy as a

clam with his compensation until he learns that Frank in the cube next door makes $40,000.
Three rules for handling the delicate subject of employee salary information.
Shifting Workplace Values Alter Pay Strategies 
Incentive compensation is becoming the norm, and salary increases seem to pattern economic
performance. 

IMPORTANCE OF COMPENSATION

Compensation and 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. Every factor contributes to the process of production/business. It expects
return from the business process such as rent is the return expected by the landlord, capitalist expects
interest and organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the
process.

Labour plays vital role in bringing about the process of production/business in motion. The other factors
being human, has expectations, emotions, ambitions and egos.
Job analysis is a systematic approach to defining the job role, description, requirements, responsibilities,
evaluation, etc. It helps in finding out required level of education, skills, knowledge, training, etc for the
job position. It also depicts the job worth i.e. measurable effectiveness of the job and contribution of job
to the organization. Thus, it effectively contributes to setting up the compensation package for the job
position.

Importance of Job Analysis

Job analysis helps in analyzing the resources and establishing the strategies to accomplish the business
goals and strategic objectives. It forms the basis for demand-supply analysis, recruitments, compensation
management, and training need assessment and performance appraisal.
Components of Job Analysis
Job analysis is a systematic procedure to analyze the requirements for the job role and job profile. Job
analysis can be further categorized into following sub components.

Job Position
Job position refers to the designation of the job and employee in the organization. Job position forms an
important part of the compensation strategy as it determines the level of the job in the organization. For
example management level employees receive greater pay scale than non-managerial employees. The
non-monetary benefits offered to two different levels in the organization also vary.

Job Description

Job description refers the requirements an organization looks for a particular job position. It states the key
skill requirements, the level of experience needed, level of education required, etc. It also describes the
roles and responsibilities attached with the job position. The roles and responsibilities are key
 determinant factor in estimating the level of experience, education, skill, etc required for the job. It also
helps in benchmarking the performance standards.

Job Worth
Job Worth refers to estimating the job worthiness i.e. how much the job contributes to the organization. It
is also known as job evaluation. Job description is used to analyze the job worthiness. It is also known as
job evaluation. Roles and responsibilities helps in determining the outcome from the job profile. Once it
is determined that how much the job is worth, it becomes easy to define the compensation strategy for the
position.

Therefore, job analysis forms an integral part in the formulation of compensation strategy of an
organization. Organizations should conduct the job analysis in a systematic at regular intervals. Job
analysis can be used for setting up the compensation packages, for reviewing employees’ performance
with the standard level of performance, determining the training needs for employees who are lacking
certain skills.

Pay structure:
 
Once job analysis has been done organizations need to decide upon the pay structures. Pay
structure refers to the process of setting up the pay for a job in an organization. The process deals
with internal and external analysis to estimate the compensation package for a job profile. Internal
equity, External equity and Individual equity are the most popular pay structures. Job description
provides the in depth knowledge about the job profile and its worth.

Pay structures are the strong determinant of employee’s value in the organization. It helps in
analyzing the employee’s role and status in the organization. It provides for fair treatment to all
employees. Pay structures also include the estimation of incentives.
The level of incentives also depends on the level of job position in the organizational hierarchy.
Internal Equity
The internal equity method undertakes the job position in the organizational hierarchy. The
process aims at balancing the compensation provided to a job profile in comparison to the
compensation provided to its senior and junior level in the hierarchy. The fairness is ensured
using job ranking, job classification, level of management, level of status and factor comparison.
External Equity
Here the market pricing analysis is done. Organizations formulate their compensation strategies
by assessing the competitors’ or industry standards. Organizations set the compensation packages
of their employees aligned with the prevailing compensation packages in the market. This entails
for fair treatment to the employees. At times organizations offer higher compensation packages to
attract and retain the best talent in their organizations.
 

Salary survey

Organizations have to bridge the gap between the industry standards and their salary packages. They
cannot provide compensation packages that are either less than the industry standards or are very
higher then the market rates. For the purpose they undertake the salary survey. The Salary survey is
the research done to analyze the industry standards to set up the compensation strategy for the
organization. Organizations can either conduct the survey themselves or they can purchase the survey
reports from a reputed research organization. These reports constitute the last 2-5 years or more
compensation figures for the various positions held by the organizations. The analysis is done on the
basis of certain factors defined in the objectives of the research.

Hence, the organizations offer most competitive packages to acquire the best talent around. It has been
found that that there are many MNCs in the Indian healthcare industry who want to put the
management on a global scale.
The compensation package includes the following components. Apart from the regular components,
medical practitioners are also provided with the special benefits mentioned below.
Figure: Special Benefits offered in Indian Healthcare & Medicine Industry

COMPONENTS OF PAYROLL

The traditional aspect of equal pay in equal regions has been taken over by the new phenomena of
competitive pay across the industries. Globalization and business expansions have caused the
organizations to attract and retain the talented workforce. They also keep in the mind the internal
parity i.e. the pay structures are comparable with respect to the job positions in the organizational
hierarchy.

employees' salaries, wages, bonuses, net pay, and deductions. It consist of the employee ID,
employee name, date of joining, daily attendance record, basic salary, allowances, overtime
pay, bonus, commissions, incentives, pay for holidays, vacations and sickness, value of meals
and lodging etc. There are some deductions such as PF, taxes, loan installments or advances
taken by employee.

Payroll is administered on monthly basis and annual basis.

While administrating the monthly payroll basic salary, HRA, conveyance, and other special allowances
such mobile, etc are considered. There are some deductions
which are provident fund (12%) of the salary, taxes and other deductions.
       
Figure: Components of Monthly Payroll

Deductions such as tax and loan/advances taken by the employee from organizations are
deducted only where applicable. Dearness Allowance and House rent allowance is provided
at a fixed rate stated by the employment law. Provident fund is deducted from the gross
salary of employee on the monthly basis as per the employment law, which is provided later
to the employee. Organizations also contribute the same amount to the provident fund of the
employee.

Annual payroll consists of leave travel allowances, incentives, annual bonuses, meal
vouchers/reimbursements, and medical reimbursements.
        
Figure: Components of Annual Payroll

Allowances, incentives, bonuses and reimbursements are based on organizational policies.

Some organizations provided the allowances on a fixed rate say 10% or 12% of the basic
salary. Some organizations go for performance based incentives.

 
PAYROLL MANAGEMENT PROCESS
 
Calculation of gross salaries and deductible amounts is a tedious task which involves risk. Some of
the organizations use the traditional manual method of payroll processing and some go for the
advanced payroll processing software. An organization opts for any of the following payroll
processing methods available::

Manual System
Manual payroll system is the traditional payroll system which involves pen and ink, adding machine,
spreadsheet, etc instead of computers, software and other computerized aids. The process was very
popular when there were no computerized means for payroll processing.

Now-a-days it is only few small scale organizations in the remote areas that use the manual payroll.
Sometimes the construction industry and manufacturing industry also use the manual payroll systems
for the contractual labour, as theses contracts are on daily/weekly basis.
There is full control in the hands of owner. But the process is tedious, time consuming and risky as it
is more prone to errors.

      
Figure: Various Payroll Processes

Accountant
Accountant is a professional having a degree/diploma course in finance/accountancy. He/she is
responsible for all the activities related to payroll accounting. He/she has the sound knowledge of
accounting principles and globally accepted standards.
The process adds costs to the organization. It involves paying someone who is responsible for
calculating the salaries of others. The financial control regarding salary goes in the hand of accountant.
Payroll Software
In today’s computerized environment, payroll system has also developed itself into automated
software that performs every action needed by the payroll process. It helps in calculating the payable
amounts and deductions very easily. It also helps in generating the pay slips in lesser time. Automated
calculations result in no errors. Data is validated automatically by the software.
It needs professionals to make use of the software for its efficient working.

Payroll Outsourcing
Payroll outsourcing involves a third party (an outsourcing company) in the calculations of salaries and
deductions. The outsourcing organization is responsible for all the activities of the payroll accounting.
It saves time and cost for the organization. If there is more number of employees (say more than 900-
1000) in the organization, payroll outsourcing would be very much beneficial.

The data is provided to the consultants/outsourcing firms. The various payroll functions undertaken by
the outsourcing organizations are as follows:

 Analysis of Payroll records, payroll taxes

 Medical claim processing

 Employee Insurance & Provident fund processing

 Quality Audit procedures & planning

1.Workmen's Compensation Act
To provide compensation for workmen in cases of industrial accidental / occupational
diseases in the course of employment resulting in disablement or death. Coverage for persons
employed in Factories, Mines, Plantations, the Railways and others mentioned in Schedule II
of the Act.

Benefits

Compensation for Death

- Minimum - Rs.20,000 Maximum - Rs.1,14,000

Compensation for Permanent disablement

- Minimum - Rs.24,000 Maximum - Rs.70,000

Temporary disablement
- 50% of wages for a maximum period of 5 years.

The Contract Labour (Regulation & Abolition) ACT, 1970

- Not to be required to work beyond 9 hours between 6 A.M. and 7 P.M. - with the exception
of mid-wives and nurses in plantations.

The Inter-state Migrant Workmen (Regulation of Employment and Conditions of

Service) Act, 1979
- ISMW ACT - Separate toilets and washing facilities to be provided in employment covered
by the 3rd and 6th laws.

The Factories Act

- In factories, women not to be engaged for cleaning, lubricating or adjusting any part of
primemover or transmission machinery; maternity leave upto 12 weeks with wages to be
provided.

Maternity Benefit Act

- Maternity benefits to be provided on completion of 80 days working.
- Not required to work during six weeks immediately following the day of delivery or
miscarriage.

- No work of arduous nature, long hours of standing likely to interfere with pregnancy/normal
development of foetus or may cause miscarriage or likely to affect health to be given for a
period of one month immediately preceding the period of six weeks before delivery.

- On medical certificate, advance maternity benefit to be allowed.

- Rs.250.00 as medical bonus to be given in case when no prenatal confinement and post-
natal care is provided free of charge.

Equal Remuneration Act, 1976

- Payment of equal remuneration to men and women workers for same or similar nature of
work protected under the Act and also under the provisions at ISMW Act, mentioned above.

- No discrimination permissible in recruitment and service conditions except where

employment of women is prohibited or restricted by or under any law.

Employees' State Insurance (General) Regulation

- Claim for maternity benefit becomes due on the date medical certificate is issued for
miscarriage, sickness arriving out of pregnancy, confinement or premature birth of child.

2.Payment of Gratuity Act, 1972

Objective
- To provide for payment of gratuity on ceasing to hold office

Coverage
- Factories, Mines, Oil fields, Plantations, Ports, Railway Companies, Shops & Commercial
Establishments and to other establishments to which the Government extends the law.

3.Employees State Insurance Act

Objective
To provide for health cover, Medical care and Cash benefits for

- Sickness

- Maternity

- Employment injury

- Pensions to dependents in case of Death (or) Employment injury

Eligibility
- Employees drawing wages not exceeding Rs.3000/- per month

4.The Payment Of Bonus Act, 1985

Objectives
- To provide statutory obligations for payment of bonus to persons employed in certain
establishments on the basis of profits or productivity.

Scope And Coverage

- Applicable all over India to factories under the Factories Act and to other establishments
employing 20 or persons on any day during a year.

- Government can extend its coverage to establishments employing between 10 and 20

workers.

- Covers all workers including supervisors, managers, administrators, technical and clerical
staff employed on salary or wages not exceeding Rs 2500/- per month.
5.The Trade Union Act, 1926

Objective
- To confer a legal and corporate status on registered trade unions.

Scope And Coverage

- Applicable to unions of workers as well as associations of employers.

- Extends to the whole of India. - A central legislation but administered and enforced by the
state governments.

6.The Industrial Disputes Act, 1947

Objectives
- To provide a machinery for peaceful resolution of disputes and to promote harmonious
relation between employers and workers.

Scope and coverage

- Applicable to all industrial and commercial establishments

- Covers all workers and supervisors drawing salaries up to Rs. 1600/- per month.

- Not a applicable to person employed in managerial and administrative capacities.

INDIRECT COMPENSATION

PAY FOR TIME AT WORK

Breaks - Rest periods of short duration, running from 5 minutes to about 20 minutes. They
are used to promote the efficiency of the employee and are customarily paid for as working
time. They must be counted as hours worked.  Within the State of Texas, these benefits are a
matter of agreement between the employer and the employee.

Agency Events - Special events or programs planned by an agency to foster and develop an
agency’s culture planned during an agency’s work hours.

Training Hours - The time that employees are allowed for training activities and for which
they receive pay.

NOT AT WORK

Sick leave

State employees are entitled eight hours of sick leave per month.    Sick leave with pay may
be taken when an employee is prevented from performing duties because of sickness, injury,
or pregnancy and confinement.  Sick leave may also be taken if an employee needs to care for
a member of his or her immediate family who is actually ill.  Sick leave may be taken to care
for members of an employee's family who do not reside in the same household only if the
time taken is necessary to provide care to a spouse, child, or parent of the employee who
needs such care as a direct result of a documented medical condition.
To be eligible for accumulated sick leave with pay for a continuous period of more than three
working days, an employee must send the administrative head of his or her agency a doctor's
certification, or an acceptable written statement of facts, showing the nature of the illness.

Agency heads may grant employees extended sick leave if they believe it is warranted.

Each agency may establish a sick leave pool where employees donate hours to the pool to be
used by other employees who experience a catastrophic illness or injury that forces an
employee to use all of their sick leave time.

Holiday

State agency employees are entitled to a paid day off from work on national and state
holidays observed by the state.  These holidays are specified by the Legislature each session.
A state agency must have enough state employees on duty during a state holiday to conduct
the public business of the agency except for those state holidays that fall on a Saturday or
Sunday, the Friday after Thanksgiving Day, December 24th, or December 26th.

Employees who actually work on a national holiday or a state holiday will be allowed
compensatory time off during the 12-month period following the date of the holiday worked.

Admin leave

Agency heads are allowed to grant 32 hours of administrative leave per fiscal year to
employees for outstanding performance.

Vacation

Employees receive vacation leave based on length of their service.

Jury Service

An state employee is entitled to serve on a jury without any deduction from wages. Officers
or employees of the Senate, the House of Representatives, or any organization in the
legislative branch of state government establish exemption from state jury service.
Emergency leave

State employees are entitled to time off with pay for a death in the family.  An employee's
family is defined as the employee's spouse, the employee's and the spouse's parents, and
children, brothers, sisters, grandparents, and grandchildren of the employee.  An agency head
may also grant emergency leave for other reasons determined to be for good cause.

Income protection program.

MANDATED INCOME PROTECTION PROGRAMS

There are some federally mandated income protection programs.

Workers' Compensation - A benefit paid to an employee who suffers a work-related injury

or illness.

Unemployment Insurance - A program designed to provide a financial safety net for

individuals who become unemployed through no fault of their own.

Social Security and Medicare Taxes (FICA) - Taxes intended to help the elderly with
retirement and health care costs.

VOLUNTARY INCOME PROTECTION PROGRAMS

The State of Texas also offers some income protection programs for state employees:

Health Insurance - insurance against loss by illness or bodily injury.

Life Insurance - insurance to be paid to a beneficiary when the insured dies.

Retirement - program designed to provide an income for your retirement and other future
financial needs.
Deferred Compensation Plans -  employer deduction from pay where employee does not
pay tax until they receive the distributions at a later date.

NON-FINANCIAL COMPENSATION

Non-financial compensation is different incentives given to employees that are not in the
form of direct pay.

Alternative Work Schedules - there are many alternatives to a traditional 5 day, 8-hour
work schedule.

On-the-Job Training- showing workers how to perform tasks by observing others.

Work/Life Balance - when an employer understands the needs employees have to juggle in
their lives.

Developmental Opportunities - training and other opportunities for employees to expand

their knowledge and improve their skills.

Casual Dress - allowing employees to relax their dress code at work.

Importance of Compensation / REWRAD System in business organizations.

Money makes the mare go is the proverb. It holds good for all the factors participating in the
business process expects its fair share of prosperity of the business. Compensation/ Reward
System plays a vital role in the business organization. And its importance can be very well
ascertained as follows:

1. sound Compensation/Reward System brings amicability and peace in the relationship

of employer and employees.
2. The system brings out the best out of every employee in the organization. It aims at
creating a healthy competition among them. And as such, encourages them to work
hard and efficiently.
3. The system provides adequate opportunities to those who wish to perform better. The
system provides growth and advancement opportunities to the deserving employees.
 4. The system upholds the principle of equal wages. It provides transparency and parity
too.
5. The perfect Compensation system provides platform for happy and satisfied
workforce.. this minimizes the labour turnover. The organization enjoys the stability.
6. The organization is able to retain the best talent by providing them adequate
compensation thereby stopping them from switching over to another job.
7. The business organization can think of expansion and growth if it has the support of
skillful, talented and happy workforce.
8. The sound Compensation system is hallmark of Organization’s success and
prosperity. The success and stability of organization is measured with pay-package it
provides to its employees.
9. Both employer and employees get benefited because of the sound Compensation
System.
10. A sound Compensation System helps the organization keep pace with changing
environment. It helps the organization to cope up with the wage levels in neighboring
industries.
11. Sound Compensation System minimizes the complaints from the employees, provides
them the congenial work environment to perform better and sets up for them the
targets to be achieved. Definite targets help employees know their role in the
organization, which minimize wastage, and enhance overall efficiency. It also helps
organization to reduce the cost of production and maximize profits.

There are basically two compensation system viz. Basis Time Rate and Piece Rate. Theses
two systems are devised to make payment to workers of different skills, efficiency levels. Its
is meant for making payment, which should adequate compensate the worker for his efforts.

The Compensation System

Time Rate Piece rate Bonus Profit sharing Indirect

Monetary

Incentive

1. Time Rate System:

This system is divided into three categories.

Time Rates

Ordinary level High Wage Level Graduated Time Rates

Ordinary Level:

It is calculated on time (daily, monthly, weekly etc.)The formula for calculation of

salary is

Rate per hour X Hours worked = Earnings (RPH X HW=E).

High Wage Level :

It is calculated on hourly basis put over time is not paid. The formula for calculation
of salary is

RPH X HW = E
 Graduate System:

Payment : the basis is linked with dearness cost of living. The index of cost of living
is varying and that is considered for calculating the remuneration.

Formula: Basic Salary is Rs. 2,000/- and Cost of living Index (D.A) is 100% then, Rs
2000+100% of Rs 2000 as cost of living is added, thus total remuneration is Rs.
4000/-. It after 6 months, cost of living index change 15%. Then basic salary + 150%
of basic salary i.e Rs 3,000/- will make it Rs, 5000.

2. Piece Rate/ Payment Rate ( Payment by Results)

System of Piece Rate ( Payment by Results)

Straight Piece Rate Piece & Time Combination Differential Piece Rate

Taylor System Merrick System Gantt Task System

Straight Piece Rate:

Payment : Flat rate is applicable per unit, which is predetermined. The time spent is not
considered.

Formula: PPR X O = Earnings.

Piece Rate and Time Rate Combinations:

Payment: It is a dual rate system, designed to perfect inefficient workers. The worker is
ensured to get the mi9nimum payment. If the payment is calculated on the basis of piece rate
guarantees and number of pieces fall below the minimum wages guaranteed, he is paid by
time Rate.

Differential Piece rate:

Payment: In favour of piece rate system, minimum wages were assured. However, under this
system, instead of combining time-rate and piece-rate, there are dual rates for different
efficiency level. The purpose behind keeping high piece rate for higher efficiency is as the
level of production increases, the cost per unit falls.

4. Bonus:

Bonus is given by the company to their employees as a reward. It is been fixed by the
government i. e 8.33%. Bonus encourages the employees to work hard. It is a
motivating factor for the employees to improve their efficiency.

5. Profit Sharing:.
 Profit Sharing is the most motivating factor. When the company makes profit it gives
some kind of share to their employees as a Annual increment. This helps to motive
employees to work hard and get more increment.

6. Indirect Monetary Incentive :

Indirect Monetary Incentives like traveling allowance, HRA, Dearness

allowance, medical facility, etc are very motivating for the employees.

REWARD SYSTEM FOLLOWED IN HSBC

Terms and Conditions

1. ELIGIBILITY :

 The HSBC Rewards Programme is open to all HSBC primary credit cardholders.

 Credit cardholders are eligible for the programme only as long as their credit card
accounts and all linked accounts are valid and in good standing, i.e. there is no
amount overdue.

 The credit cardholder cannot transfer Reward points to another cardholder. The credit
cardholder can, however, combine Reward points of his/her multiple credit cards at
the time of redemption.

2. THE REWARDS PROGRAMME :

 Eligible credit cardholders of HSBC will earn reward points as given below

o HSBC Classic cardholders will earn 1 Reward point for every purchase of Rs.
250

o HSBC Gold cardholders will earn 1 Reward point for every purchase of Rs.
100
 o HSBC Platinum credit cardholders will earn 2 Reward points for every
purchase of Rs. 150

o HSBC Premier credit cardholders will earn 2 Reward points for every
purchase of Rs. 100

 Reward point expiry will follow a Rolling Expiry system with a Reward point validity
period of 2 years for Gold & Classic credit cards and 3 years for Platinum & Premier
credit cards. If the Reward point validity on your card is 2 years, the Reward points
earned during the 1st year of card membership, if not redeemed, will expire at the end
of the 2nd year of card membership, Reward points earned during the 2nd year of card
membership, if not redeemed, will expire at the end of the 3rd year and so on. The 1st
year of card membership begins from the date of credit card issuance. For instance,
for a card issued on 10 Mar 2007, the Reward points earned from 10 Mar 2007 to 10
Mar 2008, if unredeemed, will expire on 31 Mar 2009.

 Reward points will be offered only for purchases made on the credit card.

 Reward points will not be offered on fuel purchases where the surcharge is waived.
Purchases where the surcharge is not waived will earn Reward points. Fuel surcharge
waiver is applicable on fuel purchases between Rs. 400 and Rs. 4000 at any pump in
India or according to any such criteria as decided by HSBC from time to time.

 Cash advances, any fees/charges and disputed transactions will not accrue Reward
points.

 Purchases on add-on credit cards will accrue Reward points which will be credited to
the primary cardholder's card account. Only the primary credit cardholder can redeem
Reward points.

 For credit cardholders other than Premier and Platinum credit cardholders, all
unredeemed Reward points accrued in a two year period will expire at the end of that
period, the first two year period beginning on the date of credit card issuance or 15
June 2000, whichever is later

 For Premier and Platinum credit cardholders, the unredeemed Reward points accrued
in a year will expire three years after the beginning of that year, the first year
beginning on the date of credit card issuance or 15 June 2000, whichever is later.
  The accumulated Reward points have to be redeemed by the credit cardholder within
one month of the end of the point accrual period, failing which the points will be
dropped off the credit card account.

3. REDEMPTION :

 Reward points can be redeemed against Annual Fees, Gift Vouchers, Gifts, Charities,
Magazine Subscriptions and Airline Miles by the primary cardholder only. Reward
points cannot be exchanged for cash or credit or used to obtain cash advances, or used
against payments of any charges.

 Handling charges for redemption of Reward points, at Rs. 50 per redemption shall
apply for HSBC Gold & Classic credit cards.

Annual Fees:

 Credit cardholders can redeem their Reward points to pay their annual credit
card renewal fees for their primary credit card or additional credit card.

Gifts:

 Credit cardholders have the option of redeeming their Reward points against
the goods listed in the Rewards catalogue.
 Redemption against goods is subject to the availability of stocks. In the event
of non -availability or discontinuance of any product, HSBC reserves the right
to substitute an item with another brand/ product of equivalent monetary
value.

 HSBC makes no warranties or representations either expressed or implied,

with regard to the type, quality or fitness of the goods provided through the
Rewards Programme. Gifts will be accompanied by warranty information
from the manufacturer and claims must be directed to the manufacturers
directly.

 Any dispute arising out of products and services found defective or deficient
must be addressed to Manager, HSBC Card Products Division, Post Bag No.
5080 Chennai – 600 028 in writing within 7 days of receipt.
 Gift Vouchers:

 Credit cardholders have the option of redeeming their Reward points against
the Gift Vouchers listed in the Rewards catalogue.
 Gift Vouchers cannot be exchanged for cash (in part or in full).

 HSBC does not accept responsibility for the quality of goods or services
provided by the merchant establishments participating in the Rewards
Programme.

 All disputes in this regard shall be taken up directly by the credit cardholder
with the participating establishment.

 Gift vouchers to be utilised within the validity period only. Revalidation of

vouchers will not be possible.

 Any disputes arising out of merchant vouchers that are defective or deficient
in number must be addressed in writing to Manager, HSBC Card Products
Division, Post Bag No. 5080 Chennai - 600 028 within 7 days of receipt. Any
claims made after 7 days shall not be entertained and the HSBC Cardholder
shall be deemed to be satisfied with the vouchers.

Airline Miles:

Jet Airways -

 This facility is open to all generic HSBC globally valid credit cardholders,
who are eligible for Rewards Programme.
 All terms and conditions of HSBC's Rewards Programme are applicable,
unless otherwise mentioned.

 Jet Privilege is a Frequent Flier programme run by Jet Airways and the
membership points are termed as JPMiles.

 For any conversion request to JPMiles, cardholder's JP account will be

credited in approximately 7 working days from the date of receiving the
request. Whilst HSBC shall endeavor to execute all conversion requests within
 this period, HSBC shall not be liable in any way for any delay in crediting the
JP account.

 JP membership is offered free as part of the promotion scheme run by Jet

Airways and can be discounted at the sole discretion of Jet Airways.

 HSBC shall not be liable in any way for any issues related to cardholder's Jet
Privilege membership and its associated privileges.

 This facility has been included in the regular Rewards redemption options on
HSBC credit card and can be discontinued at the sole discretion of HSBC.

Kingfisher Airlines -

 This facility is open to all generic HSBC valid credit cardholders, who are
eligible for Rewards Programme
 King Club is a Frequent Flier programme run by Kingfisher airlines and the
membership points are termed as King Miles

 HSBC credit cardholders have the option of redeeming their Reward points
against King Miles

 For every 1 Reward point redeemed, the HSBC Premier cardholder will get 2
King Miles while HSBC Gold and Classic credit card holders will get 1 King
Mile.

 King Miles membership is offered free as part of the promotion scheme run by
Kingfisher airlines and can be discounted at the sole discretion of Kingfisher
airlines

 For any conversion request to King Miles, the cardholder's King Miles
account will be credited in approximately 4 weeks from the date of receiving
the request. Whilst HSBC shall endeavour to execute all conversion requests
within this period, HSBC shall not be liable in any way for any delay in
crediting the King Miles account

 The King Miles earned from transfer of Reward points into to King Miles may
be redeemed only for Kingfisher tickets
  HSBC shall not be liable in any way for any issues related to cardholder's
King Club membership and its associated privileges

 This facility has been included in the regular Rewards redemption options on
HSBC credit card and can be discontinued at the sole discretion of HSBC

 All terms and conditions of HSBC's Rewards Programme are applicable,

unless otherwise mentioned

Singapore Airlines -

 HSBC Credit cardholders have the option of redeeming their Reward points
against KrisFlyer Miles, being membership points under the Frequent Flier
programme run by Singapore Airlines. The HSBC Rewards Programme is
open to all HSBC credit cardholders, excluding corporate cardholders.
 All terms and conditions of HSBC's Rewards Programme are applicable,
unless otherwise mentioned.

 For any conversion request to KrisFlyer Miles, the cardholder's KrisFlyer

account will be credited in approximately 7 working days from the date of
receiving the request. Whilst HSBC shall endeavor to execute all conversion
requests within this period, HSBC shall not be liable in any way for any delay
in crediting the KrisFlyer account.

 HSBC shall not be liable in any way for any issues related to the cardholder's
KrisFlyer membership and its associated privileges

 This facility has been included in the regular Rewards redemption options on
HSBC credit card and can be discontinued at the sole discretion of HSBC.

4. CHARITIES :

 Credit cardholders have the option of redeeming their Reward points against
donations to the charitable organisations / NGOs listed in the Rewards catalogue.
 HSBC will transfer the donation amount to the selected charities / NGOs within three
weeks of receiving the redemption request.

 Tax exemption certificates on charities will be sent directly by the charities to

cardholders donating their reward points for charities. Cardholders must contact the
charities directly for issues relating to their tax exemption certificates.

 Any disputes arising out of such donations shall be taken up by the cardholder directly
with the charities / NGOs.

5. MAGAZINE SUBSCRIPTIONS :

 Credit cardholders have the option of redeeming their Reward points against
magazine subscriptions

 The first copy of the magazine will be dispatched to the statement mailing address
within six weeks of the redemption request.

 HSBC does not guarantee in any way for delivery / non-delivery, continuation /
discontinuation of the availed services. HSBC is not liable for any defect or
deficiency in the product or service obtained / availed under this offer and all disputes
in this regard should be taken up with the publications directly.

6.TAJ InnerCircle PROGRAMME :

 This programme  is open to all credit cardholders (Cardholder) of The Hongkong and
Shanghai Banking Corporation Limited, India (HSBC), who are eligible for HSBC's
Rewards Programme (Programme), and are members of the Taj InnerCircle
programme.
 All terms and conditions of Programme are applicable, unless otherwise mentioned.

 Taj InnerCircle Programme is the frequent guest programme of the Taj Hotels
Resorts and Palaces (Taj). Besides a host of benefits, as a member of Taj InnerCircle
programme the Cardholder will earn points when he / she stays or stops by for a meal
at one of the restaurants, at the participating Taj Hotels in India and abroad. The
Cardholder  will earn points on his / her eligible spends on room, food and beverage,
laundry, telephone and business centre. These points are called Taj InnerCircle Points
 (Points).  These  Points can be redeemed  for holidays and memorable meals at the
Taj and for gifts from a hand-picked selection of merchandise.

 For any conversion request to the Points, Cardholder's Taj InnerCircle account will be
credited in approximately 7 working days from the date of receiving the request.
Whilst HSBC shall endeavor to execute all conversion requests within this period,
HSBC shall not be liable in any way for any delay in crediting the Cardholder's Taj
InnerCircle Points account.

 HSBC shall not be liable in any way for any issues related to the Cardholder's Taj
InnerCircle membership and its associated privileges.

 HSBC shall not be liable for any loss or damage whatsoever that may be suffered, or
for any personal injury that may be suffered as a result of availing of the benefits
under the programme.

 The offers under the Programme are not transferable, non-negotiable and cannot be
encashed. HSBC does not make any warranties or representations about the quality,
merchantability, suitability or availability of the products / services included in this
Programme or about Taj. HSBC is not liable for any defect or deficiency in the
product or service obtained / availed under this Programme and all disputes in this
regard should be taken up directly with Taj.

 This programme has been included in the regular Rewards redemption options on
HSBC credit card and can be discontinued at the sole discretion of HSBC.

 Any disputes arising out of this offer shall be subject to the exclusive jurisdiction of
courts in Mumbai. The existence of any dispute shall not, by itself, constitute any
claim against HSBC.

 HSBC reserves its absolute right to withdraw or alter any of the terms and conditions
of the Programme at any time without prior intimation to the Cardholders.

7.REDEMPTION PROCESS :

 Redemption of Reward points is not automatic. Credit cardholders will have to fill in
the redemption form and mail it to: HSBC Card Products Division, Post Bag No.
5080, Chennai – 600 028, or fax it to 044 4291 0964.
 Credit cardholders can also visit www.hsbc.co.in or use the Phone Banking facility to
redeem their points.

 Redemption requests will not be serviced if the redemption form is not fully and
correctly filled up before submission.

 Credit cardholders cannot redeem their Reward points against outstandings on their
credit card.

 Redemption of gifts, gift vouchers and magazine subscriptions is subject to

availability.

8.FULFILLMENT :

 Any redemption request received by HSBC will be fulfilled in three weeks time from
the date of receipt. Whilst HSBC shall endeavour to take prompt action in every case,
HSBC shall not be liable in any way for any delay. Whilst HSBC shall endeavour to
take prompt action in every case, HSBC shall not be liable in any way for any delay.

9.DELIVERY :

 Delivery will be made only at the billing statement address. A copy of the Proof of
Delivery (POD) can be obtained from HSBC, if requested, within 30 days of the
delivery date.
 Delivery will be made only against written acknowledgement of receipt of the goods
by any occupant at the billing statement address. Such acknowledgement shall be
deemed to be acknowledgement of the credit cardholder.

 No delivery will be made to P.O. Box addresses or to addresses outside India.

 HSBC or a third party service provider such as a courier company shall make three
attempts to deliver the goods ordered to the billing statement address. If the goods are
not delivered after three attempts, the Bank will hold the goods for 15 days from the
date of the third attempt. If the credit cardholder does not contact the Bank within
these 15 days, the Bank shall credit the credit cardholder's account with the Reward
points used for those goods.

 If a gift should arrive damaged, and:

 o If the damage is evident from the condition of the packaging, the credit
cardholder should refuse the shipment and obtain a refusal note from the
courier company and send it to the Manager, HSBC Card Products Division,
Post bag No. 5080, Chennai – 600 028.

o If the damage is discovered after opening the package, the credit cardholder
should keep all packaging materials and cartons and return all the material to
the Manager, HSBC Cards Products Division. If the returned goods are found
by HSBC to be defective or not to comply with the description in the Rewards
catalogue, HSBC shall in their best endeavour procure replacements for the
items and if not, shall credit the credit cardholder's account with the points
used for those items. The credit cardholder shall thereafter have no claim
whatsoever against HSBC.

10.WITHDRAWAL :

 HSBC reserves the right to wholly or partly modify the Rewards Programme. HSBC
also reserves the right to change the Reward point conversion rate, withdraw Reward
points awarded or to vary any of the terms and conditions herein in its absolute
discretion and without prior notice to credit cardholders.
 In case this Rewards Programme comes in conflict with any rule, regulation or order
of any statutory authority, then HSBC has absolute authority and right to modify or
cancel this programme to give effect to the said requirements.

11.GENERAL :

 Fraud and abuse relating to earning and redemption of Reward points in the Rewards
Programme will result in forfeiture of accrued points as well as termination of the
credit cardholder's credit card account.
 Information supplied by the credit cardholder on the redemption of certain
products/services may be used by HSBC or its service establishments for
administrative or marketing purposes.

 For redemption requests using the points + pay option, the cardholder’s account will
be debited with the amount indicated and will reflect in the cardholder’s subsequent
card statement.
 The Rewards Programme is entirely voluntary and it is understood that all charges are
voluntarily incurred by the credit cardholder in the normal course of credit card usage.

 Any tax or other liabilities or charges payable to the Government or any other
authority or body or any other participating establishment which may arise or accrue
to the HSBC credit cardholders by redemption as aforesaid or otherwise as result of
this Rewards Programme shall be borne by the HSBC credit cardholder.

 Terms and conditions stated herein do not amount to any commitment or

representation by HSBC to conduct such programmes.

 Selection of the products / services offered under the Rewards Programme will be at
the sole discretion of HSBC and are liable to change without notice.

 HSBC assumes no responsibility for the Reward points converted into a participating
partner's loyalty programme or for actions of any participating merchant or any other
partner in connection with the Rewards programme or otherwise.

 In the event of the HSBC credit card being voluntarily closed by a credit cardholder,
the Reward points that are in the credit card account can be redeemed within one
month of card closure. In case the credit cardholder fails to redeem these points within
one month of closure, the Reward points will automatically lapse.

 In case of a disputed transaction being resolved in the favour of the credit cardholder
and/or where a transaction is reversed, the equivalent Reward points will also be
reversed.

 Reward points which have been credited or debited to or from the credit cardholder's
account shall be reflected in the following month's statement issued by HSBC to the
credit cardholder.

 On redemption, the Reward points will automatically be subtracted from the

accumulated points in the credit cardholder's credit card account.

 Redemption orders once given to HSBC cannot be cancelled, withdrawn or changed.

Redeemed rewards are not exchangeable for other rewards or refundable, replaceable
or transferable for cash or credit under any circumstances. Reward points once
 exchanged for any other partner's loyalty programme cannot be transferred or
cancelled.

 HSBC will not be held responsible if any supplier of products/ services offered to
credit cardholders withdraws, cancels, alters or amends those products/ services.

 HSBC is not responsible for lost or stolen coupons/vouchers/certificates redeemed

through the Rewards Programme. HSBC and its agents are not responsible for any
orders not received, due to correspondence lost or delayed in the mail.

 HSBC's decision on computation of Reward points on the credit card account will be
final, conclusive and binding on the credit cardholder and will not be liable to be
disputed or questioned.

 The existence of a dispute, if any, with a third party shall not constitute a claim
against HSBC.

 Any disputes arising out of this programme shall be subject to the exclusive
jurisdiction of the competent courts in Mumbai only.

 The terms and conditions of the Rewards Programme shall be governed by the
provisions of Indian law.

Median Salary by Job

Employer: HSBC
 Median Bonus by Job
Employer: HSBC
CHAPTER –IV

DATA INTERPRETATION

1. How is the compensation program and total compensation package

communicated to employees?

PARTICULARS PERCENTAGE RESPONSES

DIRECTLY TO THE 70 70
EMPLOYEE

THROUGH EMAILS 5 5

NOTIFICATIONS 10 10

THROUGH MANAGERS 15 15
INTERPRETATION:-

 Majority of the compensation programme is communicated directly to the employees

at the time of their recruitment.
 some of the employees get the compensation information through managers,
notification, or emails

This is done to the existing employees and the fresh employees get the information at the
time of recruitment.

2. Is there a cap to limit the amount of vacation accrued?

 PARTICULARS PERCENTAGE RESPONDENCE
YES 36 36
NO 55 55
DEPENDS ON JOB 9 9
POSITION

INTERPRETATION:-

 Majority of the employees said that there is no limit to the amount of vacation
accrued.
 For some employees there is a limit to the amount of vacation
 Only 9% of the employees vacation amount is depend on job position.

 3. Are employees permitted to substitute sick leave for vacation?

PARTICULARS PERCENTAGE RESPONDENCE

YES 34 34
NO 58 58
IN SOME 8 8
EXCEPTIONAL CASES

INTERPRETATION:-

 More than 50% of employees said that they are not permitted to substitute their sick
leaves for vacation.
 In some cases they can substitute their sick leaves for vacation.
  A very few employees said that they can substitute their sick leaves as vacation in
some exceptional cases.

4. How is unused accrued vacation treated?

PARTICULARS PERCENTAGE RESPONDENCE

PAYMENT AGAINST 60 60
VACATION
CARRYING 25 25
FORWARD
VACATION
NULLIFIED 15 15
INTERPRETATION:-

 The company is going to pay the amount for unused vacation to majority of the
employees.
 In some cases the vacation period is carried forward.
 If vacation is extended for some period then it is nullified.

5. How is employee communication regarding compensation and benefits delivered in

your organization?

PARTICULARS PERCENTAGE RESPONDENCE

SATISFIED 72 72
NOT SATISFIED 28 28
INTERPRETATION:-

 More than 70% of the employees are satisfied regarding compensation system in the
company.
6. Are dependents covered, and if so, in part or in full?

PARTICULARS PERCENTAGE RESPONSES

FULLY COVERED 46 46
NOT COVERED 24 24
ONLY BLOOD RELATION 16 16
DEPENDENTS ARE COVERED
DEPENDENTS ARE PARTIALLY 14 14
COVERED

INTERPRETATION:-

 Dependents are fully covered for the employees

 Blood relation dependents are also covered in some cases
7. What is the pension or retirement plan?

PARTICULARS PERCENTAGE RESPONSES

25% OF THE BENEFIT 8 8
AMOUNT AS A CASH
REGULAR MONTHLY INCOME 8 8
FOR THE REST OF YOUR LIFE
10% GUARANTEED 9 9
ADDITIONS
BENEFITS UNDER SEC 7 7
80CCC(1) UPTO Rs.10,000
ALL THE ABOVE 68 68

INTERPRETATION:-
  Nearly 70% of the employees are getting every second pension plan.
 Benefits under section 80 CCC (1) is very less when compared to other pension or
retirement plans.

8. What holidays are paid and who is eligible for them?

PARTICULARS PERCENTAGE RESPONSES

VACATION ONCE IN A YEAR FOR 10 28 28
DAYS TO TOP & MIDDLE MANAGEMENT
HOLIDAY PACKAGE FOR EMPLOYEES 34 34
WHOSE SALARY IS MORE THAN 20,000\-
HOLIDAY PACKAGE AS A BONUS 21 21
HOLIDAY PACKAGE AS INCENTIVES 17 17
 PARTICULARS PERCENTAGE RESPONSES
YES 56 56
NO 28 28
PARTIALLY 16 16
FORMAL
INTERPRETATION:-

 All the top and middle level employees are eligible for holidays.
 Holiday packages are given as bonus or incentives.

9. Is there a formal compensation program?

INTERPRETATION:-

 In most of the salary cases there is a formal compensation program.

 The company will also follow partial formal compensation program in some cases.

10. How are wages set?

PARTICULARS PERCENT RESPONS

AGE ES

BASED ON LEVEL OF JOB – SENIOR, JUNIOR, 54 54

 INTERMEDIATE, AND BEGINNER
BASED ON PAY GRADES, OR MONETARY 32 32
RANGE OF A POSITION AT A PARTICULAR
LEVEL, WITHIN EACH DEPARTMENT
BASED ON EXPERIENCE 14 14

INTERPRETATION:-

 Wages of majority of the employees is based of his level of working.

 Employees are paid on grades or monetary range of a position at a particular level.
 Employees are also paid on their working experience.

11. Are formal salary ranges set?

 PARTICULARS PERCENTAGE RESPONSES
YES 73 73
NO 27 27

INTERPRETATION:-

 The organization will follow formal compensation program and the ranges are set.
12. If formal salary ranges are set, are they made public to employees?

PARTICULARS PERCENTAGE RESPONSES

BENCHMARK (KEY) JOBS 29 29
REVIEW THE MARKET PRICE OF 37 37
BENCHMARK JOBS WITHIN THE
INDUSTRY
ESTABLISH A TREND LINE IN 34 34
ACCORDANCE WITH COMPANY
PHILOSOPHY

INTERPRETATION:-

 Salary ranges are made public to the employees of the organization through
benchmark.
 Jobs and salaries are review the market price jobs within the industry.
13. How are jobs rated?

PARTICULARS PERCENTAGE RESPONSES

RANKING 28 28
CLASSIFICATION 20 20
FACTOR COMPARISON 16 16
POINT METHOD 36 36

INTERPRETATION:-

 Job rating is done by the famous methods like ranking classification, point method.
 Organization is following all the latest methods for rating a particular job.
 PARTICULARS PERCENTAGE RESPONSES
IN EVERY 6 26 26
MONTHS
IN EVERY 1 YEAR 52 52
IN EVERY 2 YEARS 22 22

14. How frequently are jobs re-evaluated or updated?

INTERPRETATION:-

 Job revaluation is done in each 6 months or 1 year or 2 years.

 Job revaluation depends on the type and level of job done by as employee.

15. Are any salary surveys used? If so, which ones?

PARTICULARS PERCENTAGE RESPONSES

REVIEW JOB DESCRIPTIONS 26 26
VERIFY THE PURPOSE, NECESSITY, OR 34 34
OTHER REASONS FOR MAINTAINING A
POSITION
MEET WITH THE COMPENSATION 23 23
COMMITTEE FOR REVIEW, ADJUSTMENTS
AND APPROVAL
DETERMINE THE DIFFERENCE BETWEEN 17 17
EACH SALARY STEP
INTERPRETATION:-

 Salary surveys are used by the organization.

 Surveys like meeting the compensation committee for review, adjustments and
approvals.

16. Are pay ranges revised as a result of these surveys? How frequently?

PARTICULARS PERCENTAGE RESPONSES

MONITOR FEEDBACK FROM 26 26
MANAGERS
MAKE CHANGES WHERE NECESSARY 35 35
FIND FLAWS OF PROBLEMS IN THE 39 39
PROGRAM AND ADJUST OR MODIFY
WHERE NECESSARY
INTERPRETATION:-

 Pay ranges are revised based on the requirements of the organization.

 Review is done through monitor feedback from managers of particular departments.
 And then find problems in the program and adjust where ever necessary.

17. Who in your organization (what position) administers the compensation program?

PARTICULARS PERCENTAGE RESPONSES

CHIEF EXECUTIVE 20 20
OFFICER
TOP COMPENSATED 52 52
 OFFICER
BOARD OF DIRECTORS 18 18
BRANCH MANAGER 10 10

INTERPRETATION:-

 Compensation program is administered by the top management of the

company.
 This job is done by the top compensation officer in majority of the cases.

18. Are merit increases given, and if so, are they integrated with performance evaluation?

PARTICULARS PERCENT RESPONSES

 AGE
CONDUCT A GENERAL TASK ANALYSIS BY 26 26
MAJOR DEPTS.
GET INPUT FROM SENIOR VICE PRESIDENTS OF 34 34
ALL DEPT TO DETERMINE ORG STRUCTURE &
PRIMARY FUNCTION OF EACH.
INTERVIEW DEPT MANAGERS 7 KEY EMPLOYEES, 19 19
AS NECESSARY, TO DETERMINE THEIR SPECIFIC
JOB FUNCTIONS.
DECIDE WHICH JOB CLASSIFICATIONS SHOULD 21 21
BE EXEMPT AND WHICH SHOULD BE
NONEXEMPT.

INTERPRETATION:-

 Merit increases are given to the employee after conducting some exercises.
 Like general task analysis by major department and getting input from all the
departments.
 19. Is there a bonus system, and if so how is it structured?

PARTICULARS PERCENTAGE RESPONSES

MENTAL 24 24
REQUIREMENTS
SKILL REQUIREMENTS 29 29
PHYSICAL 21 21
REQUIREMENTS
RESPONSIBILITY RANGE 26 26

INTERPRETATION:-

 Bonus system is structured based on mental, skill, physical requirements.

 The requirements according to the job position of an employee.
CHAPTER - V
FINDINGS

 THE COMPENSATION SYSTEM FOLLOWED BY THE ORGANIZATION IS A

FORMAL ONE AND MAJORITY OF THE EMPLOYEES ARE SATISFIED WITH
THE COMPENSATION PACKAGES.
 EMPLOYEES ARE ALLOWED TO SUBSTITUTE THEIR SICK LEAVES AS
VACATION WHICH INDICATES THAT SOME LIBERTY IS GIVEN TO
EMPLOYEES.
 UNUSED VACATION IS REFUNDED BACK TO THE EMPLOYEES AND THEY
CAN ALSO CARRY FORWARD THE VACATION.
 COMPENSATION PROGRAM IS PLANED BY THE HIGHER AUTHORITY OF
THE ORGANIZATION AND THEY CONSIDER ALL THE ASPECTS THE
SKILLS, SPECIALIZATION BASED ON THEIR RESPECTIVE BRANCHES.
 SALARY OF THE EMPLOYEES WILL CHANGE FREQUENTLY BASED ON
SURVEYS CONDUCTED BY THE TOP MANAGEMENT. THEY CONDUCT
SURVEYS LIKE MEETING THE COMPENSATION COMMITTEE FOR
REVIEW, ADJUSTMENTS AND APPROVALS. PAY RANGES ARE REVISED
BASED ON THE REQUIREMENTS OF THE ORGANIZATION. THROUGH
MONITOR FEEDBACK FROM MANAGERS OF PARTICULAR
DEPARTMENTS.
 JOB RATING IS DONE BY THE FAMOUS METHODS LIKE RANKING,
CLASSIFICATION, AND POINT METHOD.
 HOLIDAY PACKAGES ARE GIVEN AS BONUS OR INCENTIVES.
  BENEFITS UNDER SECTION 80 CCC (1) ARE VERY LESS WHEN
COMPARED TO OTHER PENSION OR RETIREMENT PLANS.
 MAJORITY OF THE COMPENSATION PROGRAMME IS COMMUNICATED
DIRECTLY TO THE EMPLOYEES AT THE TIME OF THEIR RECRUITMENT.
 JOB REVALUATION IS DONE IN EACH 6 MONTHS OR 1 YEAR OR 2 YEARS.
JOB REVALUATION DEPENDS ON THE TYPE AND LEVEL OF JOB DONE
BY AS EMPLOYEE.
 HEALTH INSURANCE PROGRAM PROVIDED BY THE ORGANIZATION IS
MEDICAL, DENTAL, VISION PLANS AND CHILD CARE CENTERS FOR THE
EMPLOYEES AND FOR DISABILITY AND LONG TERM CARE PROGRAMS.

SUGGESTIONS

1. It encourages individual initiative

2. It encourages working for the good of the whole

3. It helps people improve, not just rewards them when they do

4. The decision process is seen as based on all the real facts (i.e. thorough)

5. Inputs to the process are received from multiple constituencies (group and project
leaders, clients, subordinates, peers.)

6. The decision process is perceived as fair

7. The criteria for differential rewards are well understood at the beginning of the
year

8. At the end of the process, people know why they got what they got
 9. At the end of the process, people know what to do (and how to do it) next year to
get higher rewards

10. It encourages people to work for the long-term, not just latest year

11. It provides an incentive (encourages people) to stay

12. It can reward a variety of contributions necessary for the health of the firm

13. There is an appropriate return to those who built the business

14. There's a chance, over time, to achieve the highest levels (i.e. no permanent
second-class)

15. It does not lock-in high rewards for past contributions that are not sustained

16. The system discourages "cruising" (those on a high reward no longer being
energetic)

17. Timing of rewards does not put firm's cash position at risk

18. The system does not allow or encourage "gaming" (such as hoarding credit)

19. Individual superstars can obtain a premium reward

CONCLUSION:

The compensation system followed by the organization is a formal

and majority of the employees are satisfied with the compensation packages.
Company can go on greater hieghts as majority of the employees are satisfied .job
rating is done by the famous methods like ranking, classification, and point method.
Health insurance program provided by the organization is medical, dental, vision
plans and child care centers for the employees and for disability and long term care
programs. Majority of the compensation programme is communicated directly to the
employees at the time of their recruitment. The company has to work on its retirement
packages and benefits under section 80 ccc (1) are very less when compared to other
pension.

The hsbc rewards programme is open to all hsbc primary credit

cardholders. Credit cardholders are eligible for the programme only as long as their
credit card accounts and all linked accounts are valid and in good standing, i.e. There
is no amount overdue. The credit cardholder cannot transfer reward points to another
cardholder. The credit cardholder can, however, combine reward points of his/her
multiple credit cards at the time of redemption.
QUESTIONNAIRE:

1. How is the compensation program and total compensation package communicated to

employees?
a) directly to the employees
b) through emails
c) notification
d) through managers

2. Is there a cap to limit the amount of vacation accrued?

a) yes
b) no
c) depends on job position.

3. Are employees permitted to substitute sick leave for vacation?

a) yes

b) no

c) in some exceptional cases

4. How is unused accrued vacation treated?

a) Payment against vacation

b) Carrying forward vacation

5. How is employee communication regarding compensation and benefits delivered in your
organization?

a) Satisfied

b) Not satisfied

6. Are dependents covered, and if so, in part or in full?

a) Fully covered

b) Not covered

c) Only blood relation dependents are covered

d) Dependents are partially covered

7. What is the pension or retirement plan?

a) 25% of the benefit amount as a cash

b) Regular monthly income for the rest of your life

c) 10% guaranteed additions

d) Benefits under sec 80ccc (1) up to rs.10,000

e) All the above

8. What holidays are paid and who is eligible for them?

a) vacation once in a year for 10 days to top & middle management

b) holiday package for employees whose salary is more than 20,000\-
c) holiday package as a bonus
d) holiday package as incentives

9. Is there a formal compensation program?

a) Yes

b) No
c) Partially formal

10. How are wages set?

a) Based on level of job – senior, junior, intermediate, and beginner

b) Based on pay grades, or monetary range of a position at a particular level, within each
department

c) Based on experience

11.Are formal salary ranges set?

a) Yes
b) No

12. If formal salary ranges are set, are they made public to employees?

a) Benchmark (key) jobs

b) Review the market price of benchmark jobs within the industry

c) Establish a trend line in accordance with company philosophy

13. How are jobs rated?

a) Ranking

b) Classification

c) Factor comparison

d) Point method

14. How frequently are jobs re-evaluated or updated?

 a) In every 6 months

b) In every 1 year

c) In every 2 years

15. Are any salary surveys used? If so, which ones?

a) Review job descriptions

b) Verify the purpose, necessity, or other reasons for maintaining a position

c) Meet with the compensation committee for review, adjustments and approval

d) Determine the difference between each salary step

16. Are pay ranges revised as a result of these surveys? How frequently?

a) Monitor feedback from managers

b) Make changes where necessary

c) Find flaws of problems in the program and adjust or modify where necessary

17. Who in your organization (what position) administers the compensation program?

a) Chief executive officer

b) Top compensated officer

c) Board of directors

d) Branch manager

18. Are merit increases given, and if so, are they integrated with performance evaluation?
 a) Conduct a general task analysis by major depts

b) Get input from senior vice presidents of all dept to determine org structure &
primary function of each.

c) Interview dept managers 7 key employees, as necessary, to determine their

specific job functions.

d) Decide which job classifications should be exempt and which should be

nonexempt.

19. Is there a bonus system, and if so how is it structured?

a) Mental requirements
b) Skill requirements
c) Physical requirements
d) Responsibility range
BIBLIOGRAPHY: