COMPENSATION MANAGEMENT

MADE BY: ANURAG VERMA HARISH DHUNNA JENSON

KSHITJ

TABLE OF CONTENTS

1. DEFINATION 2. COMPANY PROFILE 3. COMPANY SERVICES 4. DETERMINATION OF COMPENSATION COMPENSATION PACKAGE PERKS AND ALLOWANCES

ACKNOWLEDGEMENT
We thank Prof. Hari Parmeshwar in particular for assigning us this topic and encouraging us to write in the first place. We are indebted to all those who have been helpful throughout the process of writing this Report Harish dhunna, Anurag verma, Jenson, kshitj but as the clich goes, we are solely responsible for any remaining errors of fact or judgment.

DEFINATION
Compensation, which includes direct cash payments, indirect payments in the form of employee benefits and incentives to motivate employees to strive for higher levels of productivity, is a critical component of the employment relationship. Compensation is affected by forces as diverse as labour market factors, collective bargaining govt legislations and top managements philosophy regarding pay and benefits.

COMPANY PROFILE

For more than 70 years Sheraton has enjoyed a history as vibrant and spirited as the travelers we welcome. The world has changed, but one thing hasn't - travel is about bringing people together.

1937 The origins of Sheraton date back to 1937 when the company's founders, Ernest Henderson and Robert Moore, acquired their first hotel in Springfield, Massachusetts.

Within two years, they purchased three hotels in Boston and soon expanded their holdings to include properties from Maine to Florida.

1947 Sheraton Corporation of America becomes the first hotel chain to be listed on the New York Stock Exchange. 1949 With the purchase of two Canadian hotel chains

Sheraton expands internationally and grows rapidly around the world.

1958 The company launches "Reservation," the industry's first automatic electronic reservations system. 1961 The first Sheraton in the Middle East debuts with the opening of the Tel Aviv Sheraton in Israel. 1963 The Macuto Sheraton Hotel opens in Venezuela, becoming the first Sheraton hotel in Latin America. 1965 Sheraton opens the doors to its 100th hotel - The Sheraton Boston. 1970 The company is the first hotel chain with a toll-free 800-number for direct guest access (1-800-325-3535) which is still in use today. 1985 Sheraton achieves an important milestone becoming the first international hotel chain to operate a hotel in the People's Republic of China. 1998 Starwood Hotels & Resorts Worldwide, Inc. acquires Sheraton. 2004 Sheraton introduces the Sweet SleeperTM Bed. 2006 The Link@SheratonSM experienced with Microsoft debuts at five hotels around the world. The Link@Sheraton is the connectivity hub of our lobby experience, allowing guests to work, relax, socialize or grab a snack. 2008 Sheraton Fitness programmed by Core Performance is introduced. Created in partnership with worldrenowned personal training experts

Core Performance, our fitness program is designed to keep guests at their peak at all times.

2008 Sheraton boasts a portfolio of more than 400 hotels in 70 countries, including a stellar portfolio of more than 60 resortsin stunning destinations worldwide.

COMPANY SERVICES
Sheraton Hotels & Resorts is uniquely qualified to welcome you and make you feel right at home whether you're staying with us for business or leisure. We're always working on new ways to better care for you, with:

Sheraton Sweet Sleeper Bed Services for Business Travelers Services for Meetings Customers Services for Leisure Travelers Services for Travel Agents

Sheraton Sweet Sleeper Bed In 2002 Sheraton introduced a whole new level of comfort - the Sheraton Sweet SleeperTM Bed. The celebrated Sweet Sleeper Bed features luxurious sheets, a deluxe duvet, a selection of feather down and hypoallergenic pillows, and a custom Sealy mattress. See for yourself, sink into the cozy comfort of the Sheraton Sweet Sleeper Bed.

Services for Business Travelers Sheraton Hotels & Resorts offers business travelers extensive services so they can keep up with what's happening in the office while away from it. The Link@SheratonSM experienced with Microsoft boasts free Wifi and computers, printing capabilities and places for informal meetings. For more significant business services many Sheraton hotels offer a Business Center with printing, scanning, photocopying, faxing and shipping available. Services for Meetings Customers

MEETING PLANNERS, EXECUTIVE SERVICES AND MORE Sheraton Hotels & Resorts offers a choice of venues for meetings, incentives or social events for groups of all sizes, from small executive board meeting to an annual convention of thousands. On-site sales and convention staff are available to help planners create the perfect event, and Starwoods field sales staff is equipped with the latest technology to allow immediate response regarding hotel availability and information. For the fastest way to organize your next function, visit our Meetings & Events area. Online search capability is based on a range of individual specifications, as well as complete meeting room layouts and measurements. Planners can even email proposal requests for a quick response without having to pick up the phone. Services for Leisure Travelers

FAMILY-FRIENDLY, AROUND THE WORLD With a choice of more than 60 Sheraton Resorts at enticing destinations including Argentina, Australia, Egypt, Israel, Italy, Mexico, Hawaii, California, Florida, Arizona, Tahiti and the Fiji Islands, leisure travelers can plan the perfect vacation. While staying at a Sheraton, guests can ski the slopes of Colorado, cruise the Nile,

enjoy a challenge on the Arizona links or explore Australia's Great Barrier Reef. Sheraton Resorts offer a wide variety of on-site activities for the entire family, ranging from golf and tennis to snow-skiing, water sports, pampering spas and more. KIDS STAY FREE Kids stay free at Sheraton Hotels & Resorts around the world as long as they are staying with an adult and using existing bedding. And most Sheratons offer the convenience of babysitting services, either through hotel staff or a bonded service, giving parents the freedom to enjoy a little time on their own. Services for Travel Agents Through Starwood's Travel Agent Education Program, agents can take advantage of special rates, based on availability, at most Sheraton hotels around the world. Agents may call us toll-free at 800-325-3535 within the United States and Canada, or contact any of our Worldwide Reservations Offices.

For most of its hotels worldwide, Sheraton offers the Central Commission Payment Program. Benefits include:

Twice-monthly payment for all Sheraton bookings One single check for all Sheraton bookings instead of individual checks from each hotel and resort booked Payment in the currency of choice, instead of local currency of the hotel, saving retailers conversion and processing fees

DETERMINATION OF COMPENSATION PACKAGE

The ministry sets a certain budget for compensation. Within the budget range Sheraton has to fix the compensation package. They cannot go beyond the range. sheratons compensation package is sent for approval to the ministry. So Personnel department hardly has a role to play in wage determination. Only when unions come in picture they act as negotiators in order to finalized the wage settlement.

WAGE DETERMINATION

Define the key jobs Consider Ashok as their benchmark Then accordingly pay scale range is fix

COMPENSATION PACKAGE
The compensation package mainly contains Basic pay (B.P.) + Dearness allowance (D.A.) + City Compensatory Allowance (C.C.A.) + Perquisites. D.A. SYSTEMS There are two types of D.A. systems
1.

Central D.A. (C.D.A.) Industrial D.A. (I.D.A.)

2.

Employees in staff level are on I.D.A. Employees who have joined the company on/after 1.4.89 are on I.D.A. Employees who have joined before 1989 have the option of availing either I.D.A. or C.D.A. Till date all employees avail I.D.A. except for 70 employees. Based on H.P.P.C (High Power Pay Commission), The pay scale of C.D.A. employees are fixed. For C.D.A. employees, the C.D.A. is more than basic pay. Dearness allowance is based on All India Consumer Price Index i.e. over the period of 3 months on an average how much the product/goods and services price has increased. So for E.I.L the D.A changes every 3 months.

For I.D.A employees, D.A. is calculated as % of basic pay. Bureau of Public BPE Enterprises revises the % every 3 months. D.A. PAID :The following is the D.A. paid to the employees at different levels. Level 12 - Rs.3110, Level 13 - Rs.3732, Level 14 - Rs.4043, Level 15 - Rs.4043, Level 16 - Rs.4100, Level 17 - Rs.4225, Level 18 - Rs.4473, Level 19 - Rs.4722. EMPLOYER'S PF CONTRIBUTION :The following is the employers contribution towards PF at different levels : Level 12 - Rs.973, Level 13 - Rs.1168, Level 14 - Rs.1325, Level 15 - Rs.1385, Level 16 - Rs.1482, Level 17 - Rs.1527, Level 18 - Rs.1617, Level 19 - Rs.1707.

INCREMENT :Every year the employees get 4% increment and in the year of promotion increment is 6%. After the employee reaches the maximum basic pay range and still has not got any promotion than he or she gets personal pay. Example for level 10 staff (Ast. Officer/Engr.) I.D.A scale is Rs. 3500-6200 and this level employee will be due for promotion after 3 years (Time Bound Promotions). If after

3 years due to non availability of vacancies the employee does not get a promotion then he is not stagnated at I.D.A scale at Rs. 6200 but gets a personal pay along with the scale.

C.C.A :City compensatory allowance is 6% of basic pay for metros and A-class cities with ceiling of Rs. 100 4.5% for B-1 class cities with ceiling of Rs. 75, 3.5% for B-2 class cities with ceiling of Rs. 20. INTERIM RELIEF Employees get an interim relief of 20% on basic pay. Scales of pay are due for revision w.e.f 1.01.97 but till now they have not been implemented so within this gap period the employees get an interim relief of 20% of basic pay.

PERKS AND ALLOWANCES

CONVEYANCE ALLOWANCE Employees who have their own vehicle get a conveyance allowance according to their levels and employees who do

not have their own vehicle they get transport subsidy. For scooter, conveyance allowance (annual) :- Level 1- 5 gets Rs. 210, Level 6 gets Rs. 365, Level 7 gets Rs. 440, Level 8 gets Rs. 505. For car, Level 12 get Rs. 1500, Level 13-14 get Rs. 1700, Level 15-16 get Rs. 2000, Level 17-19 get Rs. 2300. For car, annual conveyance allowance is Level 12 - Rs. 1500, Level 13-14 - Rs.1700, Level 15-16 Rs.2000, Level 17-19 - Rs. 3200.

HRA
There are three schemes for HRA 1. HRA equivalent to 30% of BP subject to 30% of Maximum of BP (in metros). 2. Company lease accommodation - HRA limited to 40% top of the scale.
3.

Self leased accommodation employees either opt HRA limited to 40% top of the scale or assessment rate (i.e., assessment done by municipality and Sheraton , based on that rent is paid).

Level

Metros

B-1

B-2

C& Unclass

ified 8 (BP 4000 and above) 10 12 13 14 15 16 17 18 19 20 2500 3325 3775 3850 3970 4025 4125 4200 4600 5400 1275 2900 3300 3375 3475 3525 3625 3675 4025 4725 2025 2700 3075 3125 3225 3275 3350 3425 3750 4400 1725 2275 2600 2650 2725 2775 2850 2900 3175 3725 1550 2075 2375 2400 2475 2525 2575 2625 2875 3375 2350 2050 1925 1625 1475

CLASSIFICATION OF CITIES FOR PAYMENT OF HRA

METROS

Delhi, Calcutta, Chennai, Mumbai (Including Noida, Faridabad, Ghaziabad, Gurgaon, New Mumbai)

A Class cities B-1 Class cities

Ahmedabad, Bangalore, Hyderabad, Kanpur, Lucknow, Nagpur Patna, Surat, Baroda, Bhopal, Indore, Jaipur, Ludhiana, Coimbatore, Madurai, Agra, Varanasi, Pune

B-2 Class cities

Vijayawada, Vizag, Jamshedpur, Allahabad, Chandigarh, Mysore, Gwalior, Amritsar, Ajmir, Kota, Durgapur, Bareilly

C&Unclass Remaining cities ified

SKILL DEVELOPMENT ALLOWANCE

In order to upgrade their skill employees get a skill development/professional updation allowance according to the levels every month. They also get reimbursement for professional/technical journals or books. This payable on yearly basis.

Level 1-3 gets Rs. 100, Level 4-6 gets Rs. 150, Level 7-8 get Rs. 200, Level 12-14 get Rs. 3000, Level 15-17 get Rs. 4200, Level 18-19 get Rs. 5400.

CANTEEN AND PICNIC SUBSIDY : All regular employees get a canteen subsidy of Rs. 300 per month. All regular employees get a picnic subsidies of Rs. 200 per annum.

TELEPHONE RENTALS Telephone allowance is available to employees above level 13. Level 13 get a bi-monthly rental plus service tax telephone rentals for 12 months = Rs. 2400 Level 14-15 employees get a bi-monthly rental plus service tax along with ceiling of calls upto 275 calls. Telephone rentals for 12 months = Rs. 3780. Level 16-18 employees get a bi-monthly rental plus service tax along with ceiling of calls upto 800 calls. Telephone rentals for 12 months = Rs. 9600.

Level 19 and above employees get a bi-monthly rental plus service tax with ceiling of calls upto 1000 calls. Telephone rental for 12 months = Rs. 12000.

CHILDREN EDUCATION ALLOWANCE IDA officers and staff get education allowance of Rs. 150 per child per month upto 2 children i.e., Rs. 3600 per annum. CDA officers get education allowance upto 2 children 5-20 years of age according to their age. SELF MARRIAGE GIFT / SILVER JUBILEE MARRIAGE GIFT All regular employees and management trainees (once during service) get a gift cheque of Rs. 1000. All employees with 10 years minimum service and 25 years married life (20 years if retiring) get a gift cheque of Rs. 2500. LONG SERVICE AWARDS All employees with unblemished service of 15 years get a silver plate costing Rs. 1500, employees completing 20 years get a silver plate costing Rs. 2000 and employees completing 25 years get a silver plate costing Rs. 2500. REIMBURSEMENT OF UNIFORM /SPECTACLES EXPENSES :All regular employees get Rs. 5700 p.a. for uniform and Rs. 750 p.a. for spectacles.

LTC ENCASHMENT Depending on their level IDA officers are provided LTC for Air/AC I class or II A/c Sleeper for travelling to any place in India/Home Town once in a block of 2 financial years without any ceiling on distance. Level 12-15 get Rs. 7760 (Rs. 1940 per person per year for 4 person), Level 16-19 get Rs. 15144 (Rs. 3786 per person per year for 4 persons). HOLIDAY HOMES Levels - 1-8 are entitlement for holiday homes in Mussooree and Shimla. Level 10 and above entitlement for holiday homes in Mussooree, Manali and Shimla. EARNED LEAVE ENTITLEMENT /ENCASHMENT All employees (except site employees) are entitled for 22 Earned Leave 12 sick leave and 10 casual leave. Site employees are entitled for 26 Earned Leave 14 sick leave and 10 casual leave. Employees get a encashment of 50% EL once a year. Employees must have at least 30 days EL at his Credit on the date of encashment,

FAMILY PLANNING INCENTIVE : All regular employees are entitled for Family Planning Incentives of Rs. 4000.

REIMBURSEMENT IN LIEU OF HOLIDAY HOMES FACILITY All regular employees (admissible after Probation) are entitled to any place other than home town. In lieu of holiday home for 4 persons for 5 days, annually, Level 1213 get Rs. 4400, Level 14-17 get Rs. 5200, Level 18-19 get Rs. 5400. MATERNITY LEAVE Women employees are entitled for 90 days leave on delivery and 6 weeks in case of miscarriage/abortion (both not more than 3 occasions). STUDY LEAVE Employees with minimum 2 years service in the company are entitled for study leave max. 3 years during entire service. FIELD ALLOWANCE

All employees get 15% of their BP with a ceiling of Rs. 725 for level 1-8 and Rs. 1500 for levels 10 and above. WASHING ALLOWANCE Level 1-8 are entitled Rs. 40 P.M.

COMPENSATION IN LIEU COMPASSIONATE EMPLOYMENT Rs. 2 lakhs for natural death and Rs. 1 lakh for accident death.

HOUSE BUILDING ADVANCES Employees admissible for advance after 2 years of service and get a advance of 90% of cost of flat including cost of land or 100 months salary or 5 lakhs whichever is the least. For extension or enlargement, advance given is 90% of the cost of extension or enlargement or 50 months salary or 2.5 lakhs whichever is the least. The rate of interest is 6% upto 1 lakhs for recovery within 25 years, 7.5% for 1-3 lakhs for recovery within 300 months and 9.5% above 3 lakhs for recovery within 300 months. CAR ADVANCE

Employees with B.P of Rs. 4000 and above are entitled for car loan. Car loan is of Actual price or invoice price of new car or Rs. 2 lakhs, whichever is the least. Rate of interest changed in 6.5% with recovery within 120 months. All regular employees are entitled for scooter/motorcycle/moped/bicycle loan. For scooter / motorcycle maximise loan is Rs. 35000 (Recovery 90 months), for moped maximum loan is Rs. 15000 (recovery -90 months), for bicycle maximum loan is Rs. Rs. 2000 (Recovery - 30 months).

OVERTIME ALLOWANCE Overtime allowance for levels 1-8, employees working upto 8 hrs a week get a single rate and those working for more than 8 hrs a week get double rate OT allowance. ENTERTAINMENT EXPENSES Level 18 and above employees are entitled for entertainment expenses. DGM gets EA of Rs. 125, GM gets EA of Rs. 250 and ED gets EA of Rs. 300. RETIREMENT BENEFITS Employees who retire get medical benefits for self and spouse, holiday home facility, transfer of personal effect

to have town, brief case, silver plate on last date of retirement FACTORS DETERMINING SALARY

KINDS AND LEVELS OF REQUIRED SKILLS The most important factor influencing the rate of pay of an employee is the kind of job the person performs. In classifying or differentiating jobs for pay purpose, no one single factor carries greater significance than the skills required of the jobholder. Sheraton tries to absorb the best professionals and their pay package is designed according to the knowledge and skills their possess.

THE KIND OF BUSINESS THE COMPANY IS IN Being a public sector company sheratons pay scale is governed by the ministry. The ministry sanctions the compensation budget and pay scales are so designed that they fit in the budget. NON MONETARY REWARDS The other major part of the reward system consists of non- compensation rewards. These rewards are much more difficult to classify and the components far more complex than in the case of monetary rewards.

PHYSIOLOGICAL HEALTH Sheraton provides a safe clean working environment taking care to avoid extreme heat, cold, and humid conditions so that the employees feel comfortable while working. DIGNITY AND SATISFACTION There is conscious effort made in Sheraton to recognize and appreciate the efforts of a useful and valuable employee. By this the employee feels happy as he thinks that he has contributed effectively to the organisation.