Compensation and Benefits

Presented by B N Nagaraj

Compensation

What is meant by Compensation What are the constituents which goes into Compensation How is it determined How is it implemented

What is Compensation

To compensate in any manner for the service rendered It might be in Cash or Kind

Constituents of Compensation

In cash might be : Salary and Wage Bonus LTA Incentives Reimbursements Performance pay/ Variable pay

Constituents of Compensation

In Kind or Perks Welfare Schemes Holiday Packages Leave and Holidays Fringe Benefits which goes along with the Positions ESOPs

Constituents of Compensation

Examples Company Leased Accommodations. Company Car Free education for Children Club Facilities Recreation facility Working from home

Constituents of Compensation

Contd :Good working Atmosphere Equal rights Rewards (Annual, long service, Best employee etc) Annual get together Position and Authority Insurances Training and Development (internal / external / abroad) Career Growth Canteen Loans and Advances Rehabilitations Retirement Benefits

Why do we do all these ?

Business is changing Business Scenario is changing People expectations are changing Stiff Competition in Business Globalization Globally Competitive Acquisitions and Mergers Talent attraction Talent Retention Talent Import

Why do we do all these ?

Earlier Paternalistic role played by Govt organization Changed Scenario to Perform to survive and grow

Best Practices

Best Practices is not a designation limited to small and exclusive Companies. Often, the most useful ideas come from Companies that are faced with critical problems and are forced to find a solution. A best practice should be able to demonstrate a positive impact on Company financial performance, customer satisfaction and/or employees satisfaction.

Best Practices

Improve Company bottom line financial performance Enhances customer satisfaction Strengthens the relationship between the Company and its employees

How is it determined

Legislations by Government Compensation surveys Crises Creativity Leaders Paying Capacity Industry wise / region wise Non profit organization NGOs Trusts

Wages

May be classified as : Minimum wages Living Wages Fair wages Competitive wages Luxury wages

Labour Legislations

Minimum Wages Act 1948 Minimum Wages rules different States Minimum Wages for different Industries and different skills. Minimum wages for different Zones in the same State Social security Acts like PF, ESI, WC Act, MB Act, Gratuity Act. LWF Act etc,.

Labour Legislations

Basic Dearness Allowance HRA Conveyance Allowance City Compensatory Allowance

Compensation surveys

Industry wise comparisons Region wise comparisons Skill wise comparison Law of Demand and Supply Paying Capacity of the Organization Special perks to retain talented employees

How is it implemented

Forced to be implemented by legislations Timing In some company where Unions are prevailing by way of negotiations and settlements either long term or short term Based on paying capacity in one phase or in phased manner Rewards for exceptional people Law of demand and supply Crises

Thank you
B N Nagaraj