Sie sind auf Seite 1von 78

A SURVEY ON COMPENSATION MANAGEMENT (A STUDY MADE IN MAHLE INDIA PISTONS Ltd, CHENNAI)

Submitted in partial fulfillment of the requirement of ANDHRA UNIVERSITY for the award of the degree of

MASTER IN HUMAN RESOURCE MANAGEMENT


(MHRM) By

Under guidance of

(Dr. D.L.DEEPAK) Field in-charge Dept of HRM

GVP COLLEGE FOR DEGREE AND PG COURSES VISAKHAPATNAM (Affiliated to Andhra University) VISAKHAPATNAM

CERTIFICATE

This

is

to

certify

that

Ms.

submitted

the

report

on

A SURVEY ONCOMPENSATION MANAGEMENT IN MAHLE INDIA PISTONS Ltd, CHENNAI, in partial fulfillment for the award of the degree of MHRM, ANDHRA UNIVERSITY for the academic year 2007-2009.

Dr. S.M.Murali Krishna Head, Dept of HRM GVP DEGREE College (Autonomous)

DECLARATION

I am Mohua Bera studying M.H.R.M in Gayatri Vidhya Parishad college for degree and P.G here by declare that this project report entitled A SURVEY

ONCOMPENSATION MANAGEMENT IN MAHLE INDIA PISTONS Ltd, CHENNAI submitted by me is my original work

The findings of the report are based on the information collected by me during the survey and is not submitted for the award of any other degree diploma fellowship or other such title or prize

Place: Visakhapatnam Date:

PREFACE
Compensation is a remuneration an employee receives in return for his or her contribution to the organization. Remuneration occupies an important place in the life of an employee. His or her standard of living, status in the society, motivation, loyalty, and productivity depend upon the remuneration he or she receives. For the employer too, employee remuneration is significant because of its contribution to the cost of production. Besides, many battles (in the form of strikes and lockouts) are fought between the employer and the employees on issues relating to wages or bonus. For HRM too, employee remuneration is a major function. The HR specialist has difficult task of fixing wages and wage differentials acceptable to employees and their leaders. Since employee remuneration is such an important subject, considerable space is devoted in books and periodicals for detailed discussions of wage- related and salary- related problems. Employee compensation decisions are crucial for the success of an organization. From a cost perspective alone, effective management of employee compensation is critical because of the total operating costs. It is all the most in some labour intensive organizations.

Acknowledgement

I express my deep sense of gratitude to Sri. RAJAN BABU, Sr Manager, HR,

MAHLE INDIA PISTONS Ltd for giving me an opportunity to carry out my


project in their esteemed organization Words are too few to express my deep gratitude to Mr.Feroz , Jr Manager, HR,

MAHLE INDIA PISTONS Ltd, who has guided me in my project work. I am


greatly indebted to him for his unweaving commitment through provoking discussions and constructive comments to improve my work. I am thankful to DR.S.M.Murali Krishna Garu, HOD, M.H.R.M, GAYATRI VIDYA PARISHAD COLLEGE FOR DEGREE AND PG for his guidance and

encouragement. I am thankful to DR D.L Deepak Field in charge for M.H.R.M, GAYATRI VIDYA PARISHAD COLLEGE FOR DEGREE AND PG and who has also been my internal guide, for his guidance and encouragement.

I am extremely grateful to the Staff of Human Resource department, MAHLE

INDIA PISTONS Ltd, for helping me in carry forward of my project

Table of Contents Theoretical Framework. The Industry. - - - - - - - - - - - - - - - - - - - - - - - - - - Company Profile. - - - - - - - - - - - - - - - - - - - - - - - - .Research Methodology. - - - - - - - - - - - - - - - - - - - - The Methodology. Sources of data Sampling Data analysis & Interpretation. - - - - - - - - - - - - - -- Conclusion. - - - - - - - - - - - - - - - - - - - - - - - - - - - - Suggestions. - - - - - - - - - - - - - - - - - - - - - - - - - - - Annexure. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Bibliography. - - - - - - - - - - - - - - - - - - - - - - - - - - - -

THEORETICAL FRAMEWORK

HUMAN RESOURCE MANAGEMENT INTRODUCTION

Management done through people.

has been defined as The art of getting things

Management is further defined as that field of human behaviour in which managers plan, organize, staff, direct and control human, physical and financial resources in an organized effort in order to achieve desired individual and group objectives with optimum efficiency and effectiveness. The term human resource means According to Leon C. Megginson the term resource can be thought of as the total knowledge, skills, creative abilities, talents and aptitudes of an organizations workface as well as the value attitudes and beliefs of the individual involved. HR is like any natural resource. It means that the management can get and use the skill, knowledge, ability etc. Through the development of skills tapping and utilizing them again and again. It is a long term & short-term perspective. It is also regarded as human factor, human asset, and human capital.

NATURE AND SCOPE OF HUMAN RESOURCES: People in any organization manifest themselves not only through individual sections but also through individual section but also through group interactions. Individuals come to workplace then they have not only technical skills, knowledge etc. But they have personal feelings, perception, desires, motives, attitude, values etc. Employee Management in an organization does mean management of not only technical skills but also other factors of Human Resource. MEANING OF HUMAN RESOURCE MANAGEMENT: Different terms are used to denote human resource

management. They are labour management, labour administration, and labour management relation, employee-employer relations, industrial relations, personnel administration, personnel management, and human capital management, human asset management, HRM and the like. In simple sense human resources management means employing people, developing their resources, utilizing, maintaining and compensating their services in tune with the job and organizational requirements.

Personnel management is a responsibility of all those who manage people as well as being a description of the work of those who are employed as specialists. It is that part of management which is concerned with people at work and with their relationships with in an enterprise. It applies not only to industry and commerce but to all fields of employment. Compensation is a remuneration an employee receives in return for his or her contribution to the organization. Remuneration occupies an important place in the life of an employee. His or her standard of living, status in the society, motivation, loyalty, and productivity depend upon the remuneration he or she receives. For the employer too, employee remuneration is significant because of its contribution to the cost of production. Besides, many battles (in the form of strikes and lockouts) are fought between the employer and the employees on issues relating to wages or bonus. For HRM too, employee remuneration is a major function. The HR specialist has difficult task of fixing wages and wage differentials acceptable to employees and their leaders. Since employee remuneration is such an important subject, considerable space is devoted in books and periodicals for detailed discussions of wage- related and salary- related problems. Employee compensation decisions are crucial for the success of an organization. From a cost perspective alone, effective management of employee compensation is critical because of the total operating costs. It is all the most in some labour intensive organizations.

Of curse cost is only one part of the picture it is also necessary to evaluate an employees contribution to the organization in exchange. Another reason for studying compensation from the organization's perspective is to assess its impact on a wide rage of employee attitudes and behaviors and, ultimately the effectiveness of the organisation and its units. Compensation may directly influence key outcomes like job satisfaction, attraction, retention, performance, skill acquisition, cooperation, flexibility, and so on. Compensation includes any direct or indirect payments to employees such as wages, bonuses, stock option, and benefits. Ehrenberg and Milkovich (1987) have defined pay level as the average compensation paid by a firm relative to that paid by its competitors. Components of Compensation: An average employee in the organised sector is entitled to several benefits both financial as well as non financial. To be specific, typical remuneration of an employee comprises wage and salary, incentives, fringe benefits, perquisites and non-monetary benefits.

Wages and salary:

11

Wages represent hourly rates of pay, and salary refers to the monthly rate of pay, irrespective of the number of hours put in an employee. Wages and salaries are subject to annual increments. They differ from employee to employee, and depend upon on the nature of job, seniority and merit. Incentives: Also called payments of results , incentives are paid in addition to wages and salaries. Incentives depend upon productivity, sales, profit, or cost reduction efforts. There are (i) individual incentive schemes, and (ii) group incentive programmes. Individual incentives are applicable to specific employee performance. Where given task demands group effort for completion, incentives are paid to the group as a whole. The amount is later divided among group members on an equitable basis. Fringe Benefits: These include such employee benefits as provident fund, gratuity, medical care, hospitalization, accident relief, health and group insurance, canteen, uniform, recreation and the like.

Perquisites:

These are allowed to executives and include company car, club membership, paid holidays, furnished house, stock option schemes, and the like. Perquisites are offered to retain competent executives. Non-monetary Benefits: These include challenging job responsibilities, recognition of merit, growth prospects, competent supervision, comfortable working condition, and job sharing and flexi time. .COMPONENNTS OF EMPLOYEE COMPENSATION

C O M P E N S A T IO N F IN A N C IA L N O N IN A N C IA L -F

H ourly and m onth ly rated wa ges salarie s

Incentives Individ ual P lans G roup pla ns

Fring e P erquisites B enefits P .F C o m pany car G ratuity C lub m e m b ership M edical care P aid holidays A ccident relie f Furnish ed hou se H ealth and S tock option G roup S chem es etc . Insurance etc,.

Job C o nte xt C hallen ging job R espo nsibilities R ecog nition G row th prospec ts S upervision W orking conditio ns Job sh aring etc.

D irect

Indirect

13

Compensation Issues: The main problem facing any organization is the laying down a fair and equitable compensation system. While the objective is simple, the process is complex. For instance, the employer will be concerned primarily with productivity. The employees emphasis may be on higher compensation to offset their increased cost of living and perhaps the price his skill will fetch in a competitive job market. The compensation issues commanding most interest today and likely to continue in future will centre around questions of compensation levels and compensation structures. Obviously, this will raise questions concerning the level of compensation rates in the plan or firm, industry, region, or nation. Closely related to this is the broad question of the determinants of the compensation relationships. This involves an understanding of various influences controlling compensation, the nature of decision making bodies and the different decision making bodies and the different traditions and customary attitudes that have developed in individual firms or industries. In some cases, the controlling influences may be standards and mores of a particular locality or region, sudden change in technology, source of labour supply, firms competitive standing, general sales-and-profits prospects of the industry, and so on. A decision about compensation rates in a given situation has to be reconciled with a variety of considerations such as when pay rates should be changed and by how much, how they should be covered. matters. Disputes between employers and unions over wages and salaries are often a part and parcel of conflicts over such diversified

One of the considerations in formulating a pay package is the quantum of take-home pay, that is the net packet, after an employee has paid for his deductions. Some of these deductions are savings for old age like Provident fund and pension schemes. The balance between what is received now and what he will get on retirement is normally, childrens education, medical treatment, recreation will necessitate a larger income. In his later years an employee will need to provide for his old age, in terms of a house and a steady income to maintain his habituated life style. Another related issue is salary and tax planning. In this context, organisations have taken recourse to fringe benefits, some of which are taxable. The incidence of tax, either on money incomes or on the total taxable income including perquisites, has to be worked out. Compensation Administration: Compensation administration deals with techniques and procedures for designing and maintaining salary structure regarding staff, and exercising pay control. The basic aim of compensation administration is to attract, retain and motivate employees by developing and marinating competitive and equitable salary structure. It is concerned with:

1. the design and maintenance of pay structure; 2. the operation of salary progression systems;

15

3. the provision of employee benefits and other allowances; and 4. the development of a total remuneration policy. The key requirements for effective compensation administration are: Compensation should be competitive with what other employers are paying for similar skills or similar jobs. Compensation paid to various individuals in an organization should reflect the comparative value of their respective contributions to that organization. Compensation decisions should be made and communicated in a way that is perceived as rational fair. The following aspects of compensation planning and administration are of particular importance at the executive and managerial levels: (i) position level, (ii) the salary structure, (iii) performance appraisal (iv) incentive bonus plans, and (v) supplementary forms compensation.

Pay Survey: Organisations attempt to gather information about pay practices of competitors through the use of pay surveys. However, finding the

going rate of pay may be easier in the theory than in practice. Administrative decisions on pay involve a range of questions, including the following: Which employees are included? Which jobs are included? Which jobs are included similar enough to use in benchmarking? How are the multiple rates of pay weighted and combined in a multiple survey? The choice of the organizations is probably one of the most important decisions in conducting pay surveys. The organizations must decide: a) which employers are its key competitors in both its labour and product markets; and b) whether to give more weight to either the product or labour market. In considering the latter decision, there are probably several factors that argue in favour of emphasizing one or the other. For example, product market comparisons are likely to deserve greater weight when (a) labour costs represent a large share of total costs, (b) product demand is elastic, (c) the supply of inelastic, and (d) employee skills are specific to the product market, and will remain so. In contrast, labour market comparisons may be more important to the extent that (a) attracting and retaining qualified employees is difficult, and (b) the costs of recruiting replacements are high.

17

Another phase of comparisions of levels of wages is concerned with wage differentials among the various regions of the country. Geographic wage differential implies different rates for the same job in a company and differences in the average wage among regions because of the type of industries located in each. Under the slogan equal pay for equal work, the demand is frequently made to eliminate such differentials within a company. Where a union represents workers in a company with plants different regions of the country, one of the pronounced objectives usually is to eliminate geographic wage differentials. Apart from establishing desired relationship with the external market, it is also vital that the internal pay relationship be maintained. Periodic review of job evaluation and salary structure is to be carried out to assure the companys ability to pay on a competitive basis.

FUTURE TRENDS: Introduction of performance related payment systems in various industrial organizations is a much debated topic today. Although performance related pay appears to be an attractive proposition, it is very difficult to implement effectively. The organization has to be

confident that it can measure performance accurately and introduce a scheme that is objective and perceived to be fair. A further problem of relating pay to performance occurs is setting appropriate targets. For example, there are many companies that have more than one division operating in different product areas, and it is not uncommon for some to benefit from a buoyant market at the same time as others are suffering a collapse in demand. In such circumstances there is a danger, if targets are not carefully set and reviewed. Another problem of relating pay to performance is how to reward those jobs where it is difficult to set output targets. Examples include legal, administrative and research roles, where outputs are very difficult to measure. In such cases a competency based approach might be required, in which the organization rewards successful behaviors rather than tangible outputs.

There are some organizations who see pay as the clearest method of delivering a message to an employee to reinforce the value of teamwork. As interest in individual schemes declines, the interest in team-based schemes grows. There have been a set of recent research findings in the US reporting the success of team-based schemes. These have concentrated on gain-sharing and profit-sharing schemes. Teambased pay appears to be growing at a rapid rate in U.K and Japan.

19

Incentive schemes play a major part in remuneration system. For instance, in our country different types of productivity and profit-linked bonus schemes are operating in different enterprises over a period of years. The recent innovation in the compensation system is stock option. This incentive is used to recognize improved performance and rich contribution of the employees and provides them with an opportunity to build ownership. Its major purpose is to reward performance over a longer period of time and to encourage employees to stay with the organization. In future, stock option schemes are likely to gain momentum and popularity as a fringe benefit in many industrial organizations in our country.

OVERVIEW OF THE ORGANIZATION

BRIEF ACCOUNT OF THE ORGANISATION India pistons, Indias first auto ancillary manufacturing unit were established in 1949 in chennai. over a span of nearly six decades, it has grown from strength to strength earning accolades all the way. Today it has 3 world class plants manufacturing pistons, piston rings, gudgeon pins ,circlips and cylinder liners. all plants are TS 16949:2002 certified and complaint with ISO 14001. India pistons have three manufacturing plants at sembiam, sengundraam and Maraimalai Nagar near chennai. The sembiam plant has grey iron and aluminum foundries, metallurgical laboratories, gudgeon pin machine shop and piston and ring plants. It has an annual capacity of 2.5 million pistons,18 million

21

rings,0.5 million cylinder liners,6 million alfin inserts and can manufacture pistons from 38mm to 300 mm dia. The sengundraam plant manufactures piston ring blanks. It has contemporary moulding lines, Twin crucible Dual Track Furnace, Multitask process flow for 2 moulding lines and can produce 30 million ring blanks and castings for various applications. The Maraimalai Nagar piston manufacturing facility has dedicated product lines, each consisting of an integrated foundry and a machine shop with high level of automation and online inspection systems. It has an annual capacity of 5 million pistons.

MAHLE Gmbh AND IPL: FORMS A JOINT VENTURE NAMED: MAHLE Ipl Ltd The Mahle group headquarter Stuttgart, Germany is one of the 30 largest automotive suppliers for piston systems, cylinder components, valve Train systems, air mgt system and liquid management system. India piston Ltd formed a joint venture with Mahle Gmbh of Germany to manufacturing pistons for advance engine application. The Maraimalai Nagar unit of India piston Ltd near chennai has been hired off as a separate entity for launching the Joint venture. Mahle will provide the technology and industry initiatives that will help the Joint venture to be competitive in the Indian automotive Market. The 50:50 Joint venture will mainly focused on the

production of pistons for gasoline and diesel engine requiring compliance with future emission regulation like Euro IV . the Joint venture will introduced New piston design with oil cooled galleries for new diesel engine generation. The facility will have a production capacity of 3.2 million pistons per year. This capacity will be doubled with in3 years. The company will employ 300 people and is expected to machine a sales turnover of 160 crore. It is drawing upon expansion programs involving an outlay of about INR 2000 Million over the next 2.3 years. The expansion envisages Indian piston and its Joint venture emerging as a technologically advanced Manufactures in the automotive industry in the automotive industry & caterings top specialized application in defense, construction, railway besides doubling its annual exports.

HISTORY Established India piston Ltd Inauguration of Maraimalai Nagar piston plant QS 9000 & TS 16949 certificate 100PPM award from Hyundai automated Foundry & gasoline piston Machining line cooling Gallery piston production commenced automated diesel foundry and MC line ISO 14000 & MS mahle IPL Joint venture

MIPL PLANT DETAILS


23

location : Maraimalai Nagar,45 kms south of chennai total area : 36850 sq. km built up area : 89390 sq km connected load: 4000 kva back up power : 2760 KVA

CORE VALUES customer satisfaction quality safety & environmental care total employee involvement

we always wish to be identified as an organization ,where our employees are in an environment of warmth,trust and encourage one another to excel in achievememts. We believe and committed to have a performance appraised process & to faster a climate of trust and achievement orientation. Our reward system shall support & develop the people by rewarding the best performance skill & development initiative. NATURE OF ACTIVITY

The world class pistons have the most advanced equipment to manufacture pistons, piston rings, Gudgeon pins, circlips and cylinder liners.

Durable rubber pistons rings Pistons and rings with less oil or fuel consumption Durabler and reliable cylinder piston Piston and ring made of gassed iron Piston sets made of alloy steel Diesel piston (Foundry salt core, Machine, surface treatment) Gasoline pistons (Foundry ,Machining. Surface treatment)

COMPANY PHILOSOPHY Mahle IPL (MIPL) shall have empowered employees proactive in every situation shouldering responsibility for both themselves & for the company. It is necessary that employees are made aware of their mandate participate in the work and have clear areas of authority & responsibility. They also encourage teamwork through which we make maximum use of the strengths of diversity in knowledge and experience. They also ensure that every employee has the opportunity to influence his/her own working conditions, work planning, suggestions; opinions are great values & treated constructively.

25

SIGNIFICANCE OF THE TOPIC The compensation in the organization is decided through collective bargaining between the management and the workers. The breakups in the compensation system in the organization are: Basic. Fixed Dearness Allowance. Variable Dearness Allowance. House Rent Allowance. Washing Allowance. Full Attendance. Educational Allowance. Skill Allowance. Medical Allowance (for those who are not covered under ESI). Adhoc allowance. Conveyance Allowance. Special Allowance.

Project Allowance.

POLICY AND PROCEDURE ON DA FIXATION It is agreed by both the parties that the permanent workmen covered by this agreement will be paid with effect from 1.6.2006 and amount of RS 3100 per month as fixed dearness allowance by neutralizing the consumer price index(madras city consumer index base year 1960) upto 2500 points The management agrees to pay a variable dearness allowance at the rates detailed below in respect of every point in excess of the 2500 points of the madrass city consumer price index by 1960 from 1.6.2006 as a three monthly average. 1) RS 2.35 per point in excess of 2500 points for wages payable for june2006 to may2008. 2) RS 2.40 per point in excess of 2500 points for wages payable for june2008 onwards. It is agreed by both the parties that for the purpose of computing the variable dearness allowance of any month the index number shall be basis for the month as under

Period computation quarterly average

of Payment of applicable month

of for

D.A Month in which D.A the will be adjusted

27

Feb-april May-july Aug-oct Nov-jan

June-august Sep-nov Dec-feb Mar-may

June Sep Dec march

Dearness Allowance: It is agreed by both the parties that the permanent workmen covered by this agreement effect from 01/06/06 an amount of will be paid with Rs, 3,100/- per month as fixed

dearness allowance by neutralizing the consumer price index (Madras city consumer Base year) upto 2,500 points.

Attendance allowance: It is agreed between both the parties that attendance allowance of Rs.390/- will be paid per month. The workmen will become eligible for full amount of attendance allowance by their actual attendance on all working days in the respective month. The workmen will be eligible for the said allowance on proportionate basis for the attendance which should not fall below 20 working days.

Night Shift Allowance: It is agreed between both the parties that the night shift allowance of Rs 30/- per day based on the actual attendance will be paid for working in the shift extending beyond the midnight with effect from 01/06/06.

House Rent Allowance: It is agreed by both the parties that Rs.1300/per month will be paid as HRA. It will not be reckoned for the purpose of calculating P.F, bonus, gratuity, O.T and other payments related to wages and shall not stand alerted in case of any excess from the existing HRA. In the event of any HRA becoming payable under any legislation during the period of operation of this settlement, the HRD being paid, shall be adjusted to such benefit. It is agreed between both the parties that the HRA will be paid in proportion to the number of days a workmen earns wages in calendar month. Any absence or leave on loss of wages, the HRA will be proportionately deducted. Heat/ Special Allowance:

29

It is agreed by both the parties that Rs.12/per day will be paid as heat allowance based on attendance. This payment will be made to the permanent workmen working in the foundry department and foundry maintainance.

Leave Travel Re-imbursement allowance: It is agreed by both the parties that a leave travel allowance for Rs 3,720/- per annum shall be paid to the workmen once in a year as lump sum payment. The next payment will be for the previous calendar year. The allowance will be proportionately reduced if the attendance is less than 250 working days. Incentive scheme Production incentive This scheme is common for all permanent workmen in the company and all figures given here in are based on total passed pistons This scheme will come into force only if the total petrol pistons passed quantity exceeds 70,000

The calculation of total piston passed for petrol and diesel are detailed below: Petrol pistons passed 1,50,000 1,60,000 1,70,000 1,80,000 1,90,000 Amount per month 450 500 550 600 650

ADDITIONAL INCENTIVE: It is agreed by both the parties the for production of passed quantity of 1,50,000 petrol pistons and 70,000 Diesel pistons and above will be reckoned for payment of additional incentive as detailed below and the amount per month so earned will be accumulated on an annual basis and paid along with annual bonus amount. This scheme is applicable only for permanent workmen. Additional incentive shall be based on the actual attendance.

Petrol pistons passed 1, 50,000 1, 60,000 1, 70,000

Additional incentive per month 250 300 350

31

1, 80,000 1, 90,000 2, 00,000 Diesel Pistons Passed 70,000 75,000 80,000 85,000 90,000 95,000 1, 00,000 1, 05,000 1, 10,000 1, 15,000 1, 20,000 BONUS:

350 350 350 Additional incentive per month 225 275 325 375 425 425 425 425 425 425 425

Bonus payable under this scheme will be a lump sum amount linked to quantity produced. The amount of bonus mentioned in the clause of the settlement in proportion to the wage/salary earned to all persons covered by the settlements in proportion to the wage/salary earned by them during the respective accounting year on reaching the production norms mentioned there in. Wage/salary for this purpose will be defined as Basic+FDA+VDA+personal pay applicable to the respective individual subject to the provisions under sec12 of payment of Bonus Act, 1965.

PISTONS (in Lakhs) 26.4 27.6 28.8 30.0 INSURANCE COVERAGE:

BONUS% 15.5 17.0 18.5 20.0

It is agreed by both the parties that all the permanent workmen who are not covered by Employee State Insurance Act, 1948 are to be covered under personal accident policy for the value of Rs. 1,00,000/- prospectively. It is also agreed that a reimbursement for a maximum of Rs. 1200/- will be made to all the permanent workmen on annual basis towards actual premium paid for MEDICLAIM INSURANCE POLICY. This will be strictly exercised based on the premium receipt of the insurance, which ensures the coverage of the concerned employee. This Scheme will be effective from 01/06/2007 and hence forth reimbursement will be done in the month of April every year. It is clearly understood that premium in excess of Rs.1200/- if any should be borne by the employee concerned. Statutory compliance: 1. Employee Provident Fund

33

According to the provident fund Act of 1952, both employee and employer have to contribute 12% from their basic salary towards provident fund. From 12% of employer contribution 8.33% is paid for Pension Fund and remaining 3.67% will be added to Provident Fund. After retirement he/she will receive Pension. 2. Employee State Insurance According to the Employee State Insurance Act of 1948 employees below 7, 500/-of Gross Salary are covered under ESI Act. Coverage under medical benefits/maternity/accidents. 1.75% is contributed by employees 4.75% is contributed by employer 3. Professional Tax According to the state government policy professional tax is charged. Non-statutory compliance: Salary in Advance: In some cases salary is paid in advance to the employees whenever there is a need or in some emergency like, for medical or any other requirements of the employee. This amount is been deducted in installments from the employees monthly salary.

Bank Loans:

If the employee have any bank loans the amount of monthly payment to the bank is been deducted from the employees salary.

Damages: If any damage of the Company property is done in the hands of the employee the amount for the damage done is been deducted from the employees salary. If the damage amount is high then the deductions is done in installment process. Minimum Wages and Contract Labour As per the Minimum Wages Act, 1948 all workers weather skilled, semiskilled or unskilled are assured of minimum wages. According to contract Labour (regulation & abolition) Act 1970, contract Labour licensing is acquired and all the welfare facilities are provided and also engaging the sub-contractors. As per this act it is mandatory to maintain statutory registers for wages, overtime, master roll, details of employees. Workmen Compensation According to the Workmen Compensation Act, 1923, employees who are not covered under ESI Act, 1948 are covered under this act.

GRATUITY Employees who have rendered minimum 5yrs of service are paid Gratuity as per the Payment of Gratuity Act, 1972.

35

Calculated as Basic i.e. (Last drawn salary)/26 days * 15days * no Of Continuous service.

METHODOLOGY

METHODOLOGY: TITLE OF THE STUDY: The title of the study is Compensation Management in Mahle India Pistons limited. The survey conducted focuses on the satisfaction levels of the employees of the organization. SELECTION OF THE TOPIC: The selected topic Employee Compensation Survey is

suggested by the Senior Management. The survey there on has been conducted basing on their suggestions.

NEED FOR THE STUDY: The need for the study in particular to this organization is the company wants to satisfy their employees with their compensation system.

OBJECTIVES OF THE STUDY: To IPL. To analyze the view of the employees on the existing understand the concept, components and policies of

compensation system of Employees at various levels of Mahle

compensatory system and to find their satisfaction levels

37

thereon. To assess with effectiveness of the compensation methods followed in the company

SCOPE OF THE STUDY: The scope of the present study has been confined to the above objectives and has been limited to a 355 employees of various divisions in Mahle India Pistons Limited

POPULATION AND SAMPLE: A population of 30 employees from various departments was taken for purpose of the study. A questionnaire on compensation is been filled by the employees according to their availabilities in the company.

PRESENTATION OF THE STUDY: The present study is divided into five chapters and they are as follows: CHAPTER 1: Gives a clear picture of the Theoretical Framework of the concept taken from various sources. .In this chapter the compensation system of the company is been explained in brief. CHAPTER 2: Gives an account of the profile of the organization and also gives an overview of the compensation system in Mahle India Pistons Limited. CHAPTER 3: This explains the methodology adopted in order to interpret and analyze the findings of the study. CHAPTER 4: Gives in detail the interpretation and analysis of the survey undertaken during the project study CHAPTER 5: Gives an insight into the findings, suggestions and conclusion arrived at during the course of the study.

DATA COLLECTION:
39

PRIMARY DATA: The primary data comprises the information from discussions, observations and interaction with different grades of employees. It also includes the scheduled questionnaire, which was prepared to collect the required data and information on different HR activities. It was distributed among the respondents for their views analysis. SECONDARY DATA: The secondary data was collected from various text books on Human Resource Management, Records, Journals and Company websites.

ANALYSIS OF DATA: Data collected has been presented, tabulated and analyzed both quantitatively and qualitatively by using various graphs and diagrams.

LIMITATIONS OF THE STUDY: There have been some limitations as per the study carried on, on the topic, Employee Compensation Survey. 1. Since all the employees in the organization cannot be covered only 30 members is taken into the account for sampling.

2. The employees gave their suggestions for the development of their organization. 3. The employees did not have the time to properly access the questionnaire. So, the responses were given in an hurried manner. 4. Due to non availability of the employees the questionnaire may not be supplied and taken back.

41

DATA ANALYSIS

1. Are you satisfied organisation? (Y/N) Table 5.1 Sl.N o 1 2 Respons e Yes No Total

with

compensation

system

in

your

No Of Response 25 5 30

% of Response 83 16 100

Figure 5.1

17%

83%

Interpretation: It is clear from the figure 5.1 that most of the employees agree that their organization is providing them a satisfied compensation.

43

2. Do you feel that the pay you receive for your work is satisfactory? (Y/N)

Table 5.2 Respons e Yes No Total % Response 63 37 100 of

Sl.No 1 2

No Of Response 19 11 30

Figure 5.2

37 %

63%

Interpretation: Most of the employees are satisfied with the pay they receive for the work performed or for their contribution to the organization.

3. Is your company paying you the suitable wage when compared to its competitors? (Y/N) Table 5.3 Sl.N o 1 2 igure 5.3 F Respons e Yes No Total % Response 67 33 100 of

No Of Response 20 10 30

33%

67%

Interpretation: Most of the employees are satisfied with the salary they receive when comparing the payment to their other competitors.

45

4. Do you receive the allowances allotted to your grade? (Y/N)

Table 5.4 Respons e Yes No Total FiFigure 5.4 % Response 77 23 100 of

Sl.No 1 2

No Of Response 23 7 30

23%

77%

1 2

Interpretation: It is clearly visible from the figure that the employees are responding organisation. positively about the allowances provided by their

5. Do you have Gratuity facility? (Y/N) Table 5.5 Sl.N o 1 2 Respons e Yes No Total % of Response 93 7 100

No Of Response 28 2 30

Figure 5.5

7%

93% 1 2

Interpretation: Employees on gratuity responded well and 93% of employees agreed


47

as they receive gratuity as per the act but only 7% of employees answered no.

6. Does the company provide you any kind of profit sharing bonus or ESOP Scheme? (Y/N) Table 5.6: Sl.N o 1 2 Respons e Yes No Total No Of Response 25 5 30 % of Response 83 17 100

Figure 5.6

17%

83% 1 2

Interpretation: The company is providing shares to the employees through Employee Stock Option scheme and 83% of employees agree that they receive shares and only 17% people disagreed.

49

7. Do you receive Bonus/Exgratia? (Y/N) Table 5.7 Sl.N o 1 2 Respons e Yes No Total Figure 5.7 No Of Response 30 0 30 % of Response 100 0 100

0%

100% 1 2

Interpretation: There is a tremenderous response for this question related to Bonus/Exgratia. Maximum employees responded positively and 100% employees agreed for this question with the answer yes.

8. Does any other financial benefit like Personal loans, Salary in advance, Loans for children education etc.. are provided? (Y/N)

Table 5.8 Sl.N o 1 2 Respons e Yes No Total No Of Response 17 13 30 % of Response 57 43 100

Figure 5.8

43% 57%

Interpretation: The response on other financial benefits like personal loans, salary in advance etc. 57% of employees responded positively and 43% answered negatively, as they do not receive any such benefits.

51

9. Do you have any Insurance Policy provided by the company? (Y/N) Table 5.9: Sl.N o 1 2 Respons e Yes No Total Figure 5.9: No Of Response 24 6 30 % of Response 80 20 100

20%

80%

Interpretation: The company is also providing with life insurance policy to the employees and the response on insurance policy is only 20% employees opposed and 80% agreed as they receive such benefit.

53

10.Does the company pay for the employees to go on Training courses? (Y/N)

Table 5.10: Sl.N o 1 2 Respons e Yes No Total % of Response 77 23 100

No Of Response 23 7 30

Figure 5.10:

23%

77%

Interpretation: For training courses 23% of employees answered no and 77% of employees agreed as the company pay for the employees to go on training course.

55

11. Does the company give subsidized meals to employee through canteen? Table 5.11 Sl.N o 1 2 Respons e Yes No Total No Of Response 12 18 30 % of Response 40 60 100

Figure 5.11

40% 60%

Interpretation: The response for the question on Dearness Allowances is 60% of the employees are not satisfied, and according to them no dearness allowances are provided to them.

12.Does the company provide you with leave encashment facility ? (Y/N)

Table 5.12: Sl.N o 1 2 Respons e Yes No Total Figure 5.12: No Of Response 25 5 30 % of Response 83 17 100

17%

83%

Interpretation: The company is providing the employees with leave encashment facility and only 17% responded as they do not receive such benefits but 83% agreed as they receive leave encashment facility .

57

13.Do you have any additional Fringe Benefits like credit cards, service management etc.. ? (Y/N) Table 5.13: Sl.N o 1 2 Respons e Yes No Total Figure 5.13: No Of Response 9 21 30 % of Response 30 70 100

30%

70%

Interpretation: On fringe benefits 70% of employees are not satisfied, like they do not receive any such benefits, only 30% of employees agreed that they receive such fringe benefits.

59

14. Does company award gifts to employees for any reasons other than long service, like retirements, marriages etc.. ? (Y/N)

Table 5.14: Sl.N o 1 2 Respons e Yes No Total No Of Response 19 11 30 % of Response 63 37 100

Figure 5.14:

37%

63%

1
Interpretation:

63% of employees agreed that they receive gifts from the company for some functions like marriages or any others, 37% of employees disagreed as they people do not receive any such benefits
61

15.Job security in your organization is good ? (Y/N)

Table 5.15: Sl.N o 1 2 Respons e Yes No Total

No Of Response % of Response 30 0 30 100 0 100

Figure 5.15:

0%

100% 1 2

Interpretation: On job security 70% of employees responded as they have good job security in their organization and 30% of employees responded as they have no job security.

16.Are you happy with the welfare measures provided by your company ? (Y/N) Table 5.16: Sl.N o 1 2 Respons e Yes No Total No Of Response % of Response 29 1 30 97 3 100

Figure 5.16:

3%

97% 1 2

63

Interpretation: There is a good positive response for Welfare measures 97% of employees agree as they receive such benefits but only 3% denied.

17.Are you satisfied with the present companys compensation benefits ? (Y/N) Table 5.17: Sl.N o 1 2 Respons e Yes No Total No Of Response % of Response 23 7 30 77 23 100

FIGURE 5.17

23%

77%

Interpretation:
65

77% of the employees are happy with the compensation benefits in the company and 23% disagreed as they are not happy with the compensation benefits in the company

18.Are you totally satisfied with what the company providing, through Compensation System? (Y/N)

Table 5.18: Sl.N o 1 2 Respons e Yes No Total

No Of Response % of Response 25 5 30 83 17 100

Figure 5.18:

17%

83% 1 2

Interpretation: On over all rating on compensation system in the company 83% of employees are satisfied with the compensation system, only 17% of people disagreed as they are not completely satisfied.

67

19. Does the company provide you with L.T.A and Medical benefits? (Y/N)

Table 5.19: Sl.N o 1 2 Respons e Yes No Total No Of Response % of Response 29 1 30 97 3 100

Figure 5.19:

3%

97% 1 2

Interpretation: There is a good positive response for L.T.A and Medical facilities 97% of employees agree as they receive such benefits but only 3% denied. 20.Management believes that employees important assets of our firm ? (Y/N) Table 5.20: Sl.N o 1 2 Respons e Yes No Total No Of Response 24 6 30 % of Response 80 20 100 are the most

Figure 5.20:

20%

80%

69

Interpretation: The company is also providing with management believes the most important to the employees and the response on insurance policy is only 20% employees opposed and 80% agreed as they receive such benefit.

CONCLUSION AND RECOMMENDATIONS

CONCLUSIONS:

71

The work environment is good and the employees are well disciplined and sincere at their work. The management is maintaining good relationship with the employees. Working conditions are good. The new joiners are well treated in the time of induction and been well supported by their superiors. Effective Teamwork is good. Meetings like Management Development Programs are very helpful to the trainees. Drinking water and urinal facilities are good. Welfare measures provided are good. A friendly relationship is been maintained between the subordinates and superiors. Supported the project trainees by providing the necessary information until the completion of the project information. Employees are satisfied with the allowances provided by the organization The organization has a sound wage structure

RECOMMENDATIONS

Employees would feel good if the company provided them with subsidized meals through canteen facility. Being summer, to make the employees more convenient to work, it will be good if they are provided with air conditioners. Telephones are been miss using a lot in the office; better avoid this miss use, in order to avoid heavy bills. Providing the employees with financial support through ESOP is appreciable. The base year of the consumer price index is very old. It would be better if they opt for some recent year. It would be appreciable if the management also opt for skillbased pay as the organization is providing the incentives based on production. Educational allowances can be provided to the permanent workmen. Transport allowances can also provided to the permanent workmen as they come from far away places.

73

BIBILIOGRAPHY

Bibliography Books Followed:

P. SubbaRao: Human Resource Management V.S.P. Rao Robbins : Personnel Management : Personnel Management

A.M. Sarma: Understanding Wage System Edwin. B. Flippo: Personnel Management

WEB SITIES: WWW.GOOGLE.COM WWW.HUMANLINKS.COM WWW.HRGURU.COM WWW.COMMERCE-DATABASE.COM WWW.BUSINESSRANKS.COM WWW. Mahle ipl.COM Www. Citehr.com

75

APPENDIX

Questionnaire on Employee Compensation Survey I am S.Kalpana student of M.H.R.M G.V.P - P.G College, Visakhapatnam. Kindly requesting you to fill the following Questionnaire with the

suitable options provided. This is only for my survey purpose, but not for any other use. Name: ____________ Grade: _______________ Employee code: ___________ Department: ______________

Please tick the options followed 1. Are you satisfied with compensation system in your organization? (Y/N) 2. Do you feel that the pay you receive for your work is satisfactory? (Y/N) 3. Is your company paying you the suitable wage when compared to its competitors? (Y/N) 4. Do you receive the allowances allotted to your grade? (Y/N) 5. Do you receive Bonus as per the act? (Y/N) 6. Is Dearness Allowance applicable in your company? (Y/N) 7. Does any other financial benefits like Personal loans, Salary in advance, Loans for children education etc. are provided? (Y/N) 8. Do you have Gratuity facility as per the Act? (Y/N) 9. Does the company provide you any kind of profit sharing bonus or Share allocation Scheme? (Y/N) 10. Do you have any Insurance Policy provided by the company? (Y/N) 11. Does the company provide you with leave encashment facility? (Y/N) 12. Does the company pay for the employees to go on Training courses? (Y/N) 13. Does the company give subsidized meals to employees through canteen? (Y/N)

77

14. Does company award gifts to employees for any reasons other than long service, like retirements, marriages etc.. ? (Y/N) 15. Do you have any additional Fringe Benefits like credit cards, service management etc.. ? (Y/N) 16. Are you happy with the Welfare measures provided by your company? (Y/N) 17. Job security in your organization is good? (Y/N) 18. Are you satisfied with the present companys compensation benefits? (Y/N) 19. Does the company provide you with L.T.A and Medical benefits? (Y/N) 20. Are you totally satisfied with what the company providing, through Compensation System? (Y/N)

Thank you, for your kind co-operation.