Vous êtes sur la page 1sur 55



This dissertation report submitted as a partial

fulfillment of the requirement of the curriculum of
MBA program of Fakir Mohan University.

Submitted By
Roll No: - 13201FM094023




by declare that the dissertation report entitled “A review
of compensatory system” at Emami Paper Mills Ltd.
submitted by me in partial fulfillment of the requirement
of Master of Business Administration course of Fakir
Mohan University, Balasore is my own and original work
and has not been submitted for published elsewhere.

Alok Kumar Palai

Roll.No 13201FM094023

I deem my deep sense of gratitude to my guide Mr.

M.K.Padhi Manager (P & PR), Emami Paper Mills Ltd. Who has been
constant source of inspiration and it were his relentless efforts with the
help of which I could tide over trouble waters.

Thanks to those executives and non-executives of Emami

whose extended cooperation helped me in my successful completion of
my project within the stipulated period of time.

Last but not the least; I would also like to express my

thanks to my faculty Dr. B B Mohapatro for giving their valuable
suggestion and helping me in putting my best effort for the preparation
of the dissertation.

Alok Kumar Palai

Roll.No 13201FM094023
The HR is very common thing with uncommon attitude in
every organization because managing human resources is one of the top
job in present scenario of this globalised world. In India the trend of HR
practices is changing very fast as per the changing the changing business

Before few decades HR functions were basically concentrated

with the major objectives of the day to day functioning of the
organization and the general administrative works like training,
recruitment and selection, compensation, industrial relation etc.

Compensation being the sensitive part in the HR practices

needs to be handled with utmost care. This can ensure retaining,
attracting, and motivating diversified work force.

The basic purpose of this research and preparing report is to

have a well understanding in the compensatory structure of the
organization and finding solution for different aspect of problem related
to compensation.

The whole study has been emphasized in the study of HR

in Business Management Program.


 Introduction
 Objective
 Scope
 Limitation


 Company Profile


 Theoretical Framework


 Data Interpretation and Analysis

 Questionnaire, Question Analysis

 Conclusion, Bibliography

Industrial environment is changing very fast owing to competitive

scenario in local and global markets. The organization has therefore, to endeavor to
meet the growing challenges of technologies, competition and growth along with
meeting the aspirations of its shareholders and promoters. The management of
strategic HR by identifying, developing, maintaining and utilizing the full
potentials of human resources becomes of paramount importance to provide the
much needed competitive edge to growth of any organization. This can only be
achieved by building excellent competencies among people to face global

In organization requires various machineries and materials to achieve its

goal side by side manpower plays a vital role in handling these.

The organizations goals are achieved by human resources who use the
machineries and materials to achieve the goals of any organizations. A sound
manpower management will make an organization successful. For any
organization, its employees are its most valuable assets and the management will
always by to retain its employees. Unless emphasis is given on giving the
employees the healthiest working atmosphere it will be difficult to retain them and
it retained the management can not get the desired result from the employees.

Today, the progress of any nation is measured from the extent of its
industrialization.On the other hand,industrialization gives the birth to many
hazards, which pose danger to the safety of persons working in the industry and to
the people living in the vicinity.In the after month of Bhopal Tragedy,Govt.of
India, brought a number of regulation, in so far as safety,health and environment
with special reference to chemical industries.In the above context, it has become
obligataroy on the part of the industries especially that are hazardous in nature to
formulate their own emergency preparedness plan.
M/s.E.P.M. has taken all possible measures to prevent occurrence
of any incidence leading to an emergent situation. In spite of the care taken, this
document sets forth for prompt action to minimize the damage and protect the
environment in the event of such an occurrence. The manufacturer have envisaged
in SHE policy to protect the workers for hazards encumbered due to with
manufacturing process.

Objective of study:

Human resources development is a multipurpose process.

It has the following objectives.
1. To provide an opportunity and comprehensive frame work for the
development of Human resources in the organization for maximum
exposure of their talents and potentials.
2. To develop the constructive mind and overall personality of each employee
3. To develop each individual capability to perform the present job and to
handle future likely rules.
4. To develop and maintain high motivation level of employees.
5. To strengthen superior subordinate relationship.
6. To develop the sense of team spirit, team work & inter team collaboration


Emami paper mills ltd. is a large –scale private sector industry. There is
separate section for each department.Most of things is being carried out in
personnel department, marketing &finance department.

At Emami paper mills, most of the activities of administration, employee

management, safety, health, environment &welfare are being dealt by HR
department.Hence; my scope of study was done under HR department.

 The process activities and the fuctions in Emami paper mills are so vast it
was not possible to cover all the activities in detail in such a short time.

 Employees were apprehensive of secrecy of data and therefore disclosing the

data regarding certain factors dealt in the study.

 Some executives could not give time because they are busy in official works.


Organizational Background:

General information about the unit:

M/s. Emami paper Mills Ltd.was established in the year 1982 and
commercial production started in 1983 at Balgopalpur in the district of
balasore,Orissa.Balgopalpur is the village in Tahasil of Remuna.It is the industrial
estate of Balgopalpur where factory is situated. The factory has obtained the
license No. BL121.A no objection certificate for manufacture of the papers with
respective quantities has obtained from the Ministry of Environment & Forest.


Emami paper Mills Ltd.

Tel No.-(91-6782) 275723/26/79
Fax-(91-6782) 275778


687 anandapur, e.m.bypass

Kolkata 700107 india
Salient Feature:

M/s.Emami paper Mills Ltd.was established in year 1982 in a specially

declared back ward district, Balasore in the state of Orissa. The total area bounded
by the factory is 50 acres (including factory quarters).Factory is situated in the
Balgopalpur Industrial Estate of GP,Nuapadhi.According to the census 2001,there
are 8,000 to 10,000 number of population around the factory with a radius of 4Km
to 6Km.The plant produces 1,36,600 MT of writing and printing paper annually by
using waste paper as raw materials.

The factory has its own cogeneration plant to fulfill the rises of
power production. There are two power plants in the factory i.e.(CPP-1 &CPP-
2).The capacity of power generation of Cpp-1 is 5MW & of Cpp-2 is 15MW.The
factory is situated in the industrial estate of Balgopalpur,towards the north of the
factory is M/s.Appolo Electrodes(p) Ltd. And the refugee colony.On its north-east
direction is M/s.Modern Renin India(p)Ltd.,M/s.Nilgiri Ceramics(p) Ltd.On the
east of the factory is Balasore Alloys Ltd.,in the south-east direction is costal
synthetic Ltd .&Universal vita Ltd.On the south direction of the factory is the
factory’s colony. The cost of factory is approximately 450crores as per present


The Balasore district consists of a long strip of alluvial land b. The elevation
of the factory is 56.3m above the mean sea level (MSL).The Nilgiri Hills, which
rise to a height of more than 300m is situated to the south-west side of the factory.
The general slope of the area is from north to south.Suvarnarekha and
Budhabalanga are the major rivers passing through the district of Balasore.

Soil Quality:

The soil of the factory area is alluvial, red loamy and sandy loamy type.
The red loamy soils are very fertile and reddish brown in some area. These soils
contain profuse highly angular fragments of late rites and limonatised iron ores.
The general consistency of this soil is like Murom.
The soils are moderately plastic have granular to crème lecture and
contain a significant amount of 1-2 mm sized ferragenised modules.

Metrological Information:

Balasore region is not seismically active. So there is no

warrant for any natural disaster to the factory. The parameters of the metrological
data recorded are maximum in minimum average temperature. Average relative
humidity, average rainfall and average wind velocity are as:

1: Average Temperature-35.50c (max), 18.60c (min)

2: Average Rain fall-108.33mm
3: Average Humidity-66.41%
4: Average Wind velocity-10km/hr
The above parameters are recorded through out a year.

The Organizational Set-up:

The organizational set-up of the factory is as follows. The senior

president of the factory is over all in charge of
production/administration/R&D.Below him there is a joint president.Mr.M.B.S.
Nair is the senior president and Mr.S.K.Khetan is the joint president.

Name Of The Senior Officers Of The Company:

1:Mr.M.B.S. Nair Senior President

2:Mr.S.K.Khetan Joint president
3:Mr.K.R.Chowdhury G.M.(work)
4:Mr.V.Mohan Senior D.G.M.(power plant )
5:Mr.J.Srivastav D.G.M.(HRD)
6:Mr.M.K.Padhi Manager (P&PR)
7:Mr.R.J.Verma (C.S.O.)
8:Mr.Chajjar D.G.M.(Mechanical)
9:Mr.B.Pradhan Manager (Paper)
Manpower Engaged:

Manpower has been defined by some as leasing right number of people

at right time. Manpower also covers various qualitative aspects of work force age
mix and scale mix. A proper manpower planning system has been adopted by
Manpower planning for key and critical area done by taking into
consideration through re-employment from surplus areas. At present E.P.M.Ltd. is
having total of ,480 permanent workers (skilled, semi skilled, high skilled),540
staffs & 1080 contractor workers(operator helpers etc.).
The total number of manpower engaged in the factory around
2100.The process of work done by shift wise process. The factory has 4 shifts.

Shift Timing No.of workers engazed

A 6 am to 2 pm 95

B 2 pm to 10 pm 95

C 10 pm to 6 am 95

General 8 am to 5 pm 125

The maximum no.of persons in the factory any point of time is between
8.30 am to 5.30 pm ie.general shift.Out of this the maximum no. of persons
are engazed at the raw materials site.
Strength Of Permanent Workers Department Wise:

Si.No. Department Strength

1. Electrical 50

2. Mechanical 70

3. Heavy Gang 6

4. Carpentary 2

5. Boiler/Power plant 54

6. M.S.B.P. pulp mill-1 13

7. Sotck Preparation,pulp mill-2 16

8. Rewinder 27

9. Cutter 23

10. Finishing 37

11. Cleaning 6

12. Digester 6

13. Time Office 4

14. Water Line 4

15. Instrumentation 6

Inventory of Raw Materials:

The raw materials used in the factory are given in tabular form.

Name of the Annual Consumption Maximum of one

Raw materials in tons time storage in tons

Rosin 60

Sodium Silicate 210

Starch 800

Caustic 560

Alum 1100

Hydrochloric Acid 2

Lime 786

Watering Agent 397

S.S. Powder 410

Sulphuric Acid 4

Coal 22839 150

Waste Papers 3600 80

Acetylene ---- ---

Profile of Emami Group Company:

Group…Over --- Rs. 2000 million

Indian Network --- 30 Locations spread over the Country
Global Network --- Middle East
South East Asia
Human Resources --- Staffs ---- 540
In BLS Unit Permanent ---- 480
Contractor ----- 1080
Group of Companies-- Emami Ltd.
Health & Beautycare-- Himani Ltd.
Paper ------ Emami Paper mills Ltd. Bls.
------ Gulmohur Ltd. Kolkata.
Others ----- Emami Food Ltd.
----- Classic Plastic.

Different Types Of Products Done By The Emami:

Emami sun Brand

Navaratan Oil
Emami Saving Cream
Emami Golden Beauty Telecom Power
Emami Boroplus
Emami Naturally Fair
Emami Vitamin Rich Cream
Himami Golden Turmeric
Emami Boroplus Soap
Himani Chyabanprash
Emami Amla
Emami Moisturing Cream
Emami Madhuri Shampoo

Food Sancks In Medical Range:

Himani Balgopal
Himani Sardija
Himani Liver Tonic
Himani Himadigest
Himani Himplus

Major Applications:

News papers
Exercise Books
Account Books

Group Companies:

Emami Group

Paper divisions Cosmetic division

Balasore Pondichery

kolkata Kolkata


AMRI Hospital CRI Ltd.

Brief Description About The Manufacturing Process:

Pulping And Stacking Preparation:

Here the raw materials used are 100% waste paper and generally
80-85% imported waste paper with 15-20% indigenous waste paper are used in
the process. There are two numbers of high consistency pulpers with reject
screens.The deinking chemicals are added in the pulper and then taken to
retention to were.The pulp is then cleaned in high density cleaners, screened in
spectro screen ink removed in floatation deinking cell and again fine cleaning
in centric cleaners and screen ring by 0.2mm slot screens. The pulp is washed
and thickened in washer and paper making chemicals (Alum Rosen and other
chemicals) are added in the blending chest. All the operation is controlled by

Paper Making:

The pulp is again cleaned through centri-cleaner screened in pressure

screen before passing to the paper machine. The paper machine consists of
pressurized head ban section dryers, size press and calendaring machine. The
final paper is cut in reels in a modern rewinder with PLC and auto tension and
cut into sheets on a modern sheet cutter.
Products of the Factory:

The product of the factory is wricling paper, Printing paper and the news
printing papers. The total quantity of the products produced is 1, 36,600MT per
By Product of the Factory:

The factory has no byproducts but the factory products are huge
amount of waste and effluents.

Recruitment Process Of Emami Paper Mills Ltd. :

EMP Ltd. Is a continuous process industry with complex
techonology.To operate this industry,EPM needs highly skilled personal and
competent managers and administrator in order to meet the present and future
manpower needs in diverse discipline, multiple skills and different work
areas,EPM is committed to a system of selection and ensure induction of the nest
and most competent person to take up changing assignment in the company.The
selection system seeks to emphasis evolution of individual capabilities in terms of
their potentials for fulfillment of company’s objective.

Source Of Recruitment:

There will be two sources of recruitment.

(1)Internal ie. from with in the company and
(2)External ie. From open market.
Among the internal sources, we may include

(a) Response from employees to the notice of vacancy displayed into the notice
(b) Recommendation made individual employees, and
(c) Recommendation made by trade union.

The external sources of recruitment are:

(i)Notification of vacancies to the employment exchange.

(ii) Advertisements in newspapers and important periodicals.

Process Of Recruitment:

All candidates those apply for,gose on various tests like

written test, scrutinization and screening personal interview and
vivavoce.Those are qualified these tests, were given the recruitment. For
helper category, the company recruits candidates through hiring people from
contractors. Those are recognized by the company, the workers are hired on
seniority basis.

Every year the organization is losing skilled employees in different
departments from time to time by way of resignation/retirement etc.Besides
due to modernization/expansion of the plants, the required number of suitable
employees against positional vacancies at skilled and high skilled worker level
and supervisor/engineer (technical/non technical) staff level are not available
from within.

All activity pertaining to recruitment will be centrally
coordinated and managed by the recruitment section or corporate office as the
case may be.

Identifying the source of potential employees and attracting the

most suitable or qualified of them as applicants for jobs although important,
are just initial steps of the process of the acquiring of new employees.
Selection of the best or the right type of persons from among the applications
is also a whole process.

Mode of Selection:

Normally there will be different hierarchical procedure of selecting

candidates held like scrutinization, screening written, personal interview and
via vous.However, when selection is made on the basis of any one of the above
tests or any combination of tests in the same segment, weight age for different
test administered will be assigned as may be prescribed or as decided by the
competent authority.

Selections are based on merit basis and suitability as assessed

through selection test. Selection test comprise of
(i)W.T./ JJ/ TT or any combination there of
(ii)Group interview or discussion or
(iii)Any other test as may be prescribed or as decided by the competent.

After a person is recruited in the non-executive rank, he/she is given

induction training. During this period he/she is interacted with all officers and
is give a general outlook about the company as well as the job to which he will
be recruited. Company’s rule and regulations are making known to him. Then
he/she is interacted with all departmental colleagues.

However, with the end of induction program, the new recruiter is

placed in the suitable job. The recruiter serves in the post for probation of one
year. After the probation period, if the work of the person is found to be
satisfactory then he is confirmed in the post.

For executives induction programs are carried out various unit levels.
They make visit to plant under concerned company and get acquainted with the
functioning and work procedures in different areas. After one year of training,
posting in a certain scale of day is done if found satisfactory and suitable to the

To man at non-executive post in the plant with competent personal

having growth potential and to utilize their capabilities in working
environment has to be promoted. To motivate non-executives and improve job
satisfaction through job enrichment, enlargement and training. To promote a
multiple skill approach resulting in job flexibility and optimum utilization of
manpower. This above rules will be applicable for promotion to all the regular
non executive employees in EPM Ltd.

Promotion in EPM Ltd. takes place only when there is any vacancy or
requirement in the higher posts (clusters). There is no time limit to get a
promotion in EPM Ltd.
The recommendation of promotion is made by departmental promotion
committee after scrutinizing the relevant records to ascertain that the
employees fulfill the criteria prescribed for the purpose. Personal department
obtain clearance from vigilance department and issue the promotion orders
with the approval of competent authority.

For executives promotion will be granted if any vacancy in higher

clusters. Performance appraisal system is the main element to get a promotion.

Selection Procedure:

The interview board has to conduct the interview and finalize

the list of candidates in order of merit. Selection of required number of
candidates shall be made out of the list after obtaining final approval from the
Chief Executive Officer of the organization.


Demotion means to lower down the order of workers designation. It may

take place for various cases.
Sometimes it is treated as punishment. It is under the disciplinary action to
a person to reduce from upper post to lower post.
Sometimes when two plant white, there is also a requirement to adopt
demotion policy. But in EPM, no demotion has been takes place so far.

Promotion Policy:

It is an inherent system that vacancies in jobs/ positions arise from

time to time by virtue of employees leaving service i.e. resignation,
retirement/termination etc. To fill up the vacancies suitable placement/selection
are made to maintain the hierarchy for smooth functioning of the

The promotions are governed by the education, ability, skill,

competence, experience, merit and length of the service can be affected when
there is requirement/ need/ vacancy and shall be decided on the individual
suitability of the concerned employees. The right man shall be put on the
suitably right job. The promotions cannot be a matter of right.

The promotion can be classified in two broad categories.

A. For Filling Of Vacancies:

In this situation the promotions are affected when there is a

vacancy/ requirement in a specific post/ job due to exit/ displacement of
employees for any reason what so ever.

B. For motivating employees for outstanding achievement:

In this situation the promotion is effected to motivate/reward
the employee for a period of hard, sincere and diligent work performances.
Such cases are very rare exclusive and the promotions are done where there is
no opportunity, avenue, scope and vacancy for up gradation. Such cases are
called “personal grade promotions” and are basically done where
administrative participation of the employee is also required over his
subordinate. While implementing such promotions it must be noted that in the
case of workers that he has reached the age of 50 years or if the promotion is
given at a young age his future expectations/aspirations may be a negative
factor/breed frustration demising his work performance. However, this does
not apply in exceptionally outstanding cases. Even if a worker is given a
special promotion benefit in certain cases he may be required to perform the
work as he was doing before promotion.

Selection procedure for promotion:

The departmental head shall recommend the name of the employees to

be promoted and in case there are more candidates of similar experience/skill
committee comprising of 3/5officers/superiors shall be appointed to select the best
suitable candidates.

 Confidential assessment of person’s experience achievement/ ability shall be

made and service records shall be taken into consideration by the concerned
shift superiors/ in charge.
 For electrical trade positions electrical license is a statutory requirement but
is not a criteria/reason for automatic promotion/increments.
 Promotions to all trade jobs should be subject to vacancy and not by merely
lapse of time.
 Vacancy/ placement shall be determined by the department / management
which may change /occur from time to time on the basis of requirement.
 All the promotions shall be effective only after finally approved by the chief
executive of the factory.
 In case of non-availability of suitable person to fill up vacancy from the
existing workers notification of vacancies shall be made with the
employment exchange.

Promotion Scheduled For Process Department:

Pulp Mill:

Helper II(US) 15yrs Helper I (SSII)

Helper I (SSII) 10yrs Attendent (SSII) 7yrs

Jr.Operator (SSII)

Jr.Operator (SII) 12yrs. Operator (SI) 7.5yrs

Sr.Operator (HS) personal grade.

Paper Machine:

Helper (US) 15yrs. Helper (SSII)

Helper (SSII) 10yrs. Press/ Wire boy (SSI)

Wire boy/ Press boy (SSI) 15yrs. 2nd Assistant

2nd Assistant (SII) 5yrs 1st Assistant (SI)

1st Assistant (SI) 5.5yrs Operator (HS) 7yrs.

Sr. Operator (HS) personal grade.

Forman (HIS) Personal


Helper (US) 10yrs Helper(SSII)

Helper(SSII) 5yrs Finishers(SII) 10yrs Sr.Finisher(SI)

Sr.Finisher(SI) 3yrs.Line checker(SI & HS)

Rewinder / Cutter:

Helper(SSII) 5yrs/ 7yrs Attendent(SSII) 5yrs

Attendent(SSI) 10yrs Jr.Operater(SII) 5yrs

Operater(SI) 5yrs Sr.Operater Personal grade

Power Plant:

Helper (US) 15yrs. Helper(SSII)

Trainee (Non ITI) Mech./Elect. Asst.Turbine Operator(SII)

Trainee(ITI. Mech./Elect.) 3yrs. Helper(SSII)

2yrs.Asst.Turbine Operator.

Asst.Turbine Operator(SII) 7.5yrs Turbine Operator(SI)

10yrs Sr.Turbine Operator.

2nd class Boiler Attended(SII) 10yrs 1st class Boiler Attended

1st class Boiler Attended (HS) 15yrs Sr.Boiler Attended(HSI)

Personal grade Foreman (HIS) Personal grade.

Mechanical/ Electrical/ Instrumentation Maintenance:

Helper (US) 15yrs. Helper (SSII)

Helper(US) 5yrs. Khalasi Helper(SSII) 7yrs.

Khalasi(SSI) 10yrs. Head Khalasi Rigger(SI) Personal

Helper(Non ITI Mech./ Elect.) 10yrs Helper (SSII)

5yrs. Jr.Fitter(SII)

Trainee (ITI Mech./ Elect.) 3yrs. Helper(SSII) 10yrs.


Jr.Fitter/ Jr.Electrician/ Jr.Mech.(Inst)/Jr.Welder/ Jr. Turner/Jr.Carpenter/ Jr.

Pump Operator (SII) 7.5yrs. Fitter/ Electrician/Mech.(Inst)/
Welder/ Turner/Carpenter/ Pump Operator (SI) 10.5yrs./Senior/
Foreman (HS & HIS) personal grade.

Induction and Placement:

When a candidate joins a company, he/she is in an unfamiliar
environment. He has to know the company if his potential is to be properly used.
Hence, in Emami paper Mills induction program is given much importance. A new
Employee has to visit all the different departments to know the process activities of
the concerned department. It starts right from security activity and all commercial
and technical departments so that he knows the process as well as interacts with the
people and gets familiar. He learns the rules and regulations of the company and
the obligations on his part. After this induction training which is for about 15/20
days he/she is placed in his parent department.

Scope of Training

This recruitment policy is formulated to give opportunities to

the young incumbents having following qualifications to prepare them for future
requirement at skilled and high-skilled (worker) level and supervisor and engineer
level (staff).

Skilled and High Skilled Worker Category:

The trainees who have passed ITI/Apprenticeship course on

trade jobs from recognized institutions securing 1st division marks.

Technical Supervisor (process and Engineering)/Non Technical Staff Category:

The incumbents having Diploma/BE/AMIE/B.com securing 1st

division marks.

Age: The employees to be recruited as per the aforesaid norms should be above 18
years of age.

Training Facilities:
A conference/training room with a sitting capacity of 35
persons with all facilities of audio/video facilities i.e. white broad, OH projector
and LCD projector with computer is available for the training purpose.

Generally transfer made in the intra-unit level in EPM Ltd. When a
power plant was established here, some employees were transferred from paper
machine to power plant. Transfer of employee is not forcible.
There are two types of training
A. Statutory
B. Non Statutory
A. Statutory: Statutory training is a part of vocational training Is important for
the areas like quality, skill, up gradation etc.for this EPM Ltd. Has started a
training program in 1999 by an outside agency. B.C.C.houdhury , a
remounted safety consultant comes periodical interval to train about work
culture, productivity and quality.
B. Non Statutory: As regards to non- Statutory training, workers are also
nominated to the program like basic engineering skill, operations for critical
equipments etc. for this daily training program. Each department is
conducted about cleanliness, housekeeping by department head.

All employees have to retire from the job at the age of 58 years
and he/she will be liable to get all benefits.

Their is performance appraisal system for assessing the

performance of employees and to plan for their development. To increase
awareness of task/target and the responsibility of the employees at all level to
ensure fulfillment of company’s objective.

Rating Factor For Workers P.A. Systems:

There are five rating factors for workers P.A.system. These are as

#: Knowledge
#: Quality of work
#: Volume of work
#: Behavior
#: Punctuality
The gradation of P.A. is assigned such as exceptional, very good, average,
meager and inadequate. This P.A. is first recommended by departmental head
and then by area manager.

Rating Factor For Staff:

Rating factor for staffs are as

A: Knowledge
B: Initiative and drive
C: Volume of work
D: Quality of work
E: Reliability
F: Behavior
G: Cost consciousness
H: Punctuality
I: Leave record
J: Leadership

Theoretical Framework
Meaning of compensation:-
Compensation refers to a wide range of financial & non-
financial rewards to employees for their service rendered
to the oraganization.It is paid in the form of wages, salaries
& employee benefits such as paid vacation insurance ,
maternity leave ,free travel facility, retirement benefits etc.
Monetary payments are a direct form of compensating the
employees and have a great impact in motivating
employees’ .The system of compensation should be so
designed that it achieves mainly 3 things.
(1)Capable employees are attracted towards the
(2)The employees are motivated for better performance.
(3)The employees do not leave the employer frequently.



In organization workers are compensated in following ways
 MONTHLY wages and salary or total pay including basic wage,
house rent allowance, dearness allowance, city compensated.
 Bonus at the end of the year.
 Economic benefits such as paid holidays leave & travel concession.
 Contribution towards insurance premium.
 Contribution towards employee provident fund.
 Transport & medical facility.

Types of compensation
 Base compensation
 Supplementary compensation

Base Compensation: Wage and salary

Base compensation is the monetary benefits given to the employees in
the form of wage or salary.
Wages may be defined as aggregate earning of an employee for a
given period of time such as day or a week or a month. Wages are
basically price paid for the labor in the process of production.
Payment made to the labor is generally referred to as wages. It is
composed of two parts-the basic wage and the other allowances. The
allowance includes dearness allowance, city compensatory, overtime
pay, and medical allowance etc.
It is compensation to an employee for services rendered on a weekly,
monthly or annual leaves. It is annually associated with office staff,
super-visors, researchers, managers etc. whose performance cannot be
measured directly.
Wages and salaries represent a substantial part of total
costs in most of the organizations. The responsibility of wage and
salary administration usually lies with the top management ( i.e board
of directors) or the CEO. The personnel manager plays an important
role in delivering the wage policies and procedures. The general
objective of the wage and salary administration is as follows.
 Control of the costs.
 Establishment of fair equitable remuneration
 Utilization of wage and salaries as an incentive to greater
employee productivity.
 Maintenance of a satisfactory public relation image.
 Attract and retain talent.
 Comply with legal rules formed by government.
Supplementary compensation
Supplementary compensation involves ‘Fringe benefits’ offered
through several employee services and benefits such as housing,
subsidized food, medical aid, crèche, etc.
The basic purpose of the fringe benefits or supplementary
compensation is.
 To attract and maintain efficient human resource with the
 To motivate the human resources.

Equity and Pay Rates

The need for equity is the most important factor in determining pay
rates. This is achieved through the following steps.
 Find the worth of each job through job evaluation.
 Conduct a wage and salary survey to find what other employers
are paying for the comparable jobs.
 Group similar jobs into pay grade.
 Price each pay grade by using wage curve.
 Fine tune pay rates.

Job Evaluation
The worth of a job to the organization is determined through job
evaluation. Since the whole process is largely subjective a committee
is appointed to collect information and come up with a hierarchy of
jobs according to their values.
Wage and salary surveys
While job evaluation ensures internal equity. A wage salary survey
provides information as to what other organizations that complete for
employees are paying.
Group Similar jobs into pay grades
In this step similar jobs (in terms of raking or number points as
ascertained by the job evaluation committee) are grouped into grades
for the pay purpose. The organization can now focus on; say 10 to 12
pay grades, instead of pay rates.
Price Each Pay Grade-Wage curve
In the next step pay rates are assigned to pay grades through a wage
curve. The wage curve shows graphically the pay rates currently paid
for jobs in each pay grade relative to the points or rankings given to
each job or grade.
Fine Tune Pay Rates and Determine wage Structure
Here the employees fix a pay range for each grade. The wage str. Of a
company is nothing but a pay scale showing ranges of pay within
each grade.
Structure of Wage and Salary
Basic + Dearness allowance + other allowances

Basic Wage
The basic wage in India corresponds with what has been
recommended by the fair wage committee (1948) and 15th Indian
labor conference (1957). The various awards by wage tribunal, wage
board, pay commission reports serve as guiding principle in
determine basic wage. While deciding basic wage following criteria
may be considered.
(1) Skill need of the job.
(2)Experience need.
(3)Difficulty of work (material as well as physical).
(4)Training need.
(5)Responsibility needed.
(6)Hazardous nature of the job.
Dearness allowance (DA)
It is the allowance paid to the employees in order to enable them to
face with the increasing dearness of essential commodities. Instead of
increasing the wage every time, if there is a rise in price levels DA is
paid to neutralize the effects of inflation. When prices go down DA
can also be cut down.
DA is linked to India to three factors: The index factor, the time
factor, and point factor.
Other Allowance
Because of increasing competition in the job market and growing
awareness on the part of the employees the list of other allowances
granted by employees is expanding.
A list of the other allowance is given.
 Attendance
 Books
 Car
 Card (credit card)
 City compensatory
 Club membership
 Computer
 Driver
 Education
 Family
 Group insurance
 Lease travel
 Lunch
 Medical
 Nightshif
 Overtime
 Paternity and maternity
 Pension
 Provident fund
 Servant
 Tiffin
 Transport
 Telephone
 Uniform

Data Interpretation and


Total number of employees at Emami paper mills including permanent

and contract workers are given in the following figure.
Staff 540
Workers 480
Contract Workers 1080
Total 2100

Bar chart shows strength of employees in different years:

Year 99 00 01 02 03 04 05 06 07 08 09
1164 1154 1120 1075 1047 1033 1022 1018 1247 1702 2100

Although there had been reduction in employee’s number since 1999 up

to 2006 now it has been considerably increased since2007. The
following bar diagram shows the employee strength in different years.
Basic Wages:

For Permanent Workers

Grade Basic Highest Basic Lowest

No. of Person

High Skilled 6195 4215

Skilled 4885 2120
Semi Skilled 3755 2977

[Gradation wise highest and lowest per month wages of workers as on

Workers Wages to contract

Generally two types of contract workers are there at Emami Paper Mills;

Old Contract workers – 410

New Contract Worker- 670

Total 1080

Every old worker is entitled to get Rs 124 per day and every new worker
is getting Rs 70 per day.

Basic salary for the consecutive three years:

Skill High Skilled Semiskilled
Year skilled

2007 3900 2780 2132

2008 4300 3300 2800

2009 6195 4885 3755

Ray diagram shows the basic wages given in last three years.

[Series-1corresponds to high skilled,series-2 corresponds to skilled and

series-3 corresponds to semiskilled workers]

The above graph shows that there has been over 30% increase in basic
salary in 2009 from the year 2008 for high skilled and skilled workers.
For semi skilled the increase is over 20%.


The Worker gets 12% HRA +other allowance like welfare +fuel and
petrol allowance +production allowance +education+Washing
For high skilled Rs. 1550/- to1650/-
For skilled Rs. 1450/- to 1495/-
For semi skilled Rs. 1388/- to 1248/-
Other Allowances

1. 12% of basic of HRA to those who are not accommodated in

company’s quarter.
2. Welfare allowance of Rs.100/- per month to all workers.
3. Travelling allowance of Rs. 320/-
4. Productivity allowance of Rs.80/-
5. Night shift allowance of Rs.4/shift.
6. Workers are given loan facility.
7. Attendance incentives 2.5 days basic wage for working 30 days.
8. Acting allowances is paid to the employees when and where
required Rs.10/- per 8 hour working.
All the employees are entitled to get bonus. Generally it is paid before
Dasahara. Structure of bonus is 20% of basic salary.
Wages for Overtime

Double of the basic wages are paid to permanent company workers those
who are doing over time.
Employees Provident Fund

12% of basic salary was paid by employer from which 3.67 of basic
goes to the employees provident fund and 8.33% goes to employees
pension fund.
Pension Fund
1. 8.33% of basic salary is paid by the employer towards pension
2. 1.1% of administrative charges of basic go to pension fund.
3. 0.5% of basic E.D.L.I (employees deposit linked insurance) goes
to pension fund.
4. 0.01% E.D.L.I administrative charges go to pension fund.

The employees who have been working for at least 5 years are entitled to
get gratuity. It is calculated as

Last basic salary drawn

26 x15 x Period of service

Employees State Insurance Scheme

4.75% paid to ESI of as employees share to each employee.

 Sickness benefit
 Medical benefit
 Maternity
 Permanent disablement benefit
 Funeral benefit

Life Cover Scheme

This scheme is only applicable to death case. In case of the death of an

employee, the wife or children of concerned worker will get a minimum
of Rs.37, 000/- and also entitled to get 50% of pension.

Question Analysis
A number of questions were asked to various employees from various departments.
It includes executive and non –executive. The questionnaire is as follows.

1. Do you think, compensation is the only way that helps in boosting the
morale and motivating the employee?

A. Yes B. No C. Can’t say

2. Is the salary being given to you satisfactory?

A. satisfactory B. Not satisfactory C. Highly satisfactory

3. What’s about compensatory system is it employee fevered or employer


A. Employee fevered B. Employer fevered C. Can’t say

4. Have you thought of leaving the company, in case company refuses to hike
the salary in future?

A. Yes B. No c. Not yet thought

5. Whether salary is paid in the right time?

A. Yes B. No

6. Is your salary being cut down when you take a leave?

A. Yes B. No C. Depending upon the number

of days
7. Looking at the provident fund and pension fund, do you feel your future is

A. Yes B. No C. Can’t say

8. Taking into consideration of your experience and expertise, do you feel that had
you been joined another company in the industry, you would have get more salary
than the present one?

A. More B. Comparatively more C. Not really D. Don’t know

9. Should the concept of flexi timing be introduced in the company?

A. At the emergency case B. Every time C. No not at all

10. Is there any impact of global slowdown/recession on your job?

A. Not really B. A little bit C. Can’t say

11. In case someone didn’t perform up to the expectation, company reduced its
salary. How would you look into this issue?
A. Company did the right thing B. It should not have done
Analysis of the questions


Do you think, better salary is the only way that helps in boosting the morale and
motivating the employees?
Findings- During the study it was found that 70% employees said good salary
is not the only way that helps in boosting morale of the employees. Just 25%
vote in fevered of this.

Suggestion- As 70% of employees says good salary is not the only way
to boost the morale and motivate the employees, apart from giving better
salary management need to add other facilities to have a well motivated
group of employees.

Is the salary being given to you satisfactory?

Findings: 68% of employees are satisfied with their salary. 20% of

employees are partly dissatisfied and 12% are totally unsatisfied.

Suggestion: Figure shows that 32% of employees are really a matter of

concern for the company. So management need to treat them right at this
moment, otherwise it will hamper the productivity.


Have you thought of leaving the company, in case company refuses to

hike the salary in near future?

Findings: 59% of employees given their nod to switch over to other

company while 32% replied to keep patient.
Suggestion: As majority of employees needs better salary in future.
Management need to hike it periodically.
What’s about the compensatory system?
Findings: 65% replied, it is both employer and employees fevered. 20%
says, it is employer fevered, 10% said it as employees fevered, while 5%
could not answer any thing.
Suggestion: No suggestion.
Is your salary being cut down when you take a leave?
Findings: 85% of employees said, it is not being cut down. 15% replied
depending upon the time and period of leave it is decided.
Suggestion: Apart from the legal leave, company need to give leave
those who need desperately without cutting down the salary.

Looking at the provident fund and pension fund, do you feel that your
future is secured?

Suggestion: 63% says their future is secured, Company need to keep

their faith in future.


Taking into consideration of your experience and expertise, do you feel

that had you been joined another company in the industry, you would
have get more salary than the present one?
Findings: 21% said more, 25% said comparatively more, 29% said not
really, 25% could not say.
Suggestion: Employees should be paid according to their performance
and expertise and these things should be communicated to them.


Should the concept of flexi timing be introduced in the company?

Findings: 56% replied they want to work according to their own time.
30% want to work in a particular time every day. 14% said it should be
given at the time of emergency.
Suggestion: As flexi timing is a new concept in the industry and it
enhances productivity and boost the morale of working should be
introduced carefully.


Is there any impact of global recession on the salary being paid to you?

Findings: 90% said against this and 10% could not able to answer about
Suggestion: It has been found in the study that there has been no impact
of global recession on the company.

Majority of employees said company should not cut down the salary.
They told quoted as “we are performing better now, in future if we don’t
perform our salary will be cut down, this is not be fair”



During my study, analyzing the compensation system of the company
and interrogation to employees following conclusion has been drawn.

 When an employee does not get remuneration

according to his service rendered to the company,
next time his performance level may decline so there
should be proper pay to proper work.

 An employee performing high up to the level should

be rewarded and should be given more challenging
task and responsibility for his career advancement.

 For low performer cutting down salary is not the

solution as it enhances fear among employees and
may leads to low performance. Company should first
find out cause of the low performance and find the
way to convert him as a good performer.

 Incentives, bonus, perks, and other allowances boost

the morale and motivate to perform better. So it
needs to be practiced properly.

 Every organization is having considerable number of

old employees. They are more vulnerable to stress
regarding their future that ultimately leads to lack of
concentration and low performance. So every
organization needs to have well structured future
plan for every employees that includes provident
fund, pension fund, and insurances.
 Performance related pay and team based pay
enhances the productivity of an individual so also of
the organization. But it should be fair enough to
avoid any kind of biasness.
 Young employees are highly optimistic. Wherever
they get more compensation they switch over to
there. So retaining experienced and talented youth is
a challenge and better compensation system can
really do a lot.

Personnel Management C.B. Mamoria

Human Resource Management V.S.P. Rao

Organizational Behavior L.M. Prasad

Armstrong Michael and

Murlis Helen Reward Management

Company website WWW.EPM.CO.IN