Context

Compensation Management.

Lessons from the animal kingdom

Mr Baboons and Mrs Baboons Fairness and monkeys

Free Internships vs Joining Bonus

Is huge pay differential between top and bottom a reflection of market worth or manipulation or exploitation ?

Motivation and Compensation

PM vs Security guard. Enron/Satyam/Independent Directors/auditors

Compensation and MBA

Changes in courses /electives offered

So
Macro Micro Firm Individual Groups Culture How much is enough

Definition of Compensation ? Who decides ?

Society (consumers/ voters / generally ) Stockholders ( for what and how much) Managers ( expenses / motivation) Employees( returns / entitlement / reward) Global views

Total returns

Total Compensation

Relational Returns

Cash

Benefits

Cash
BASE Cost of Living Merit Short Term Long Term

Benefits
Income Protection Work/ Life focus Allowances

Relational Returns
Recognition and status Employment security Challenging work Learning oppurtunities.

Implicit Contract

Employment Relationship
TRANSACTIONAL
HIGH PAY LOW COMMITMENT HIGH PAY HIGH COMMITMENT Cult Like (Microsoft) LOW PAY HIGH COMMITMENT

Low ----- High

Hired Guns (Lehman Brothers) LOW PAY LOW COMMITMENT

Workers as commodity

Family (Starbucks)

RELATIONAL
Sunday, January 06, 2013

Low ----- High

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Compensation Objectives
Efficiency ( labour costs + improving performance across various parameters) Fairness Compliance