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Accoroding To I. Kessler,
Compensation management refers to
payment systems which determine
employee wages or salary, direct and
indirect rewards
IMPORTANCE OF
COMPENSATION
Impacts an employers ability to attract and retain
employees.
Ensure optimal levels of employee performance in
meeting the organizations strategic objectives.
Compensations components
Direct compensation in the form of wages or salary
Base pay (hourly, weekly, and monthly)
Incentives (sales bonuses and or commissions)
Indirect compensation in the form of benefits
Legally required benefits (e.g., Social Security)
Optional (e.g., group health benefits)
CONCEPT OF
COMPENSATION
Workers exchange work for rewards.
Probably the important reward and
certainly the most obvious is money
Organizations generally seek to pay the
least that they have to in order to minimize
costs worker is also want fair compensation
Government policies set minimum wages
and benefits that employers must meet
and these policies provide protection for
certain groups
A part from this compensation administration
policies depend upon condition of labour
market trade union influences internal factors
such as attitudes of top management
Trend changing in compensation management
from seniority based to performance based
Compensation structure should be reviewed
from time to time adapt to changes in the
environment and cost of living
Compensation administration seeks to design
the lowest cost play structure that will not only
attract motivate and retain competent
employees but also be perceived as fair by
these employees
Insurance for employees
Loans to emplyees
Accident to employee insurance
Accomidation
Referral a Friend
Issues in compensation
Mgmt
Methods of Compensation
Headquarters- based model
Modified Home Country model
Host country/Local Market Model
Better of home or Host Model
International citizen Model
Lumpsum Model
Negotiation Model
Balance sheet Method
Headquarters- based model