COMPENSATION MANAGEMENT

IN FMCG SECTOR
NAME: DEEPA KUNDER
ROLL NO: 28
S.Y.M.M.S-H.R
 FMCG SECTOR- AN OVERVIEW

FMCG is the fourth largest sector in the Indian Economy with a

total market size of Rs. 60,000 crores. FMCG sector generates 5%
of total factory employment in the country and is creating
employment for three million people, especially in small towns and
rural India.
Availability of key raw materials, cheaper labour costs and
presence across the entire value chain gives India a
competitive advantage.

The growth in the standard of living prompted companies to

extend their product offerings all through the price value
equation. In this process many existing customers upgraded
themselves to users of premium priced products.
 The earlier economy was manufacturing based but the current
economy is knowledge based. Hence talented manpower planning
becomes a important task for the HR managers which further paves
the way for strategic compensation management.

Compensation is a key element of the employment relationship

and, in addition to being the single greatest operating cost for many
organizations, it has been advocated by some recently as a tool for
enhancing organizational performance and sustained
competitiveness.

The holistic nature of compensation highlights that compensation

strategies by themselves do not motivate people to perform better but
their success is intimately connected to overall HRM climate in the
organisation.Hence the best pay masters are not necessarily the best
employers.
 Analytical framework of Compensation Management

(Organization Psychology)
(Sociology)
• Motivation
• Social
• Perception
&
• Attitudes
• Normative Pressures
• Behavior

(Politics)
(Economic Perspective) • Bargaining Power of the
Transactional Cost Employees and the
Control Mechanism Management
ELEMENTS FOR THE RESEARCH

OBJECTIVE RESEARCH
TO KNOW THE METHODOLO
POLICIES AND
GY
PRACTICES OF
MANAGING
COMPENSATION EXPLORATOR
IN FMCG SECTOR Y RESEARCH

SOURCE OF DATA
DATA- COLLECTION
SECONDARY STUDY ON
DATA FIVE
WEBSITES LEADING
MAGAZINES FMCG FIRMS
OBSERVATION-BENEFIT PLANS ACROSS COMPANIES

COMPANY -1 COMPANY -2

Work life Programmes Extended Health Care

Family Counselling Medical Travel Assistance

Health Benefits-Medical Assistance Dental Care

Programme

Investment Benefits Group Retirement Saving Plans

Performance Bonus Medical Insurance

 COMPANY- 3 COMPANY- 4

Comprehensive Medical assisstance Dynamic career opportunities

programme

Interest free loans for housing and Education Initiatives

purchase of two wheeler

Contingency Loans for marriage,illness Personal Development Programmes

of a close relative.

Leave policy Challenging Projects

Domestic chores- bill payments etc Fast Paced Work Environment

 COMPANY -5

Flexible Work Arrangements

Learning and Recreation

Fitness and Nutrition

Counselling and Referral Programme

Intensive Care Management of Older Relatives

 RECOMMENDATIONS

Recommendation- ●
Effective Pay Strategy is the use
of a combination of individual
1
and group or team incentives.

Recommenda ●
●Skill Based Pay with a group bonus plan
tion- ●Gain Sharing is a large group incentive plan
●

that rewards participants with precluded cash

bonus
2
CONTINUED………..

●
●Involve supervisors in the preparation of job
Recommendation- description to save the HR valuable time.
●It would help the HR to act as refiners and editors of
3
●

job description

Recommenda ●
●Seek help from local pay consultants on

tion- developing an integrated pay structure.

●Update the pay struture annuallyby a fired
●

percentage.
4
CONTINUED………..

Should Balance the cost of direct

●
●

Recommendation-5 compensation with indirect

compensation.

Recommend Performance Based pay which act

●
●

ation- as a motivating factor to increase

the productivity of the employees.
6
PERSPECTIVE OF THE CASE STUDY:

The five FMCG companies have majorly focused on

indirect compensation as compared to direct compensation

Indirect compensation in terms of frinnge benefits and flexible

benefit packages have been the major motivating factor as
compared to salary and incentives given to employees.

Compensation Management has been identified as an

important tool to boost employees productivity and overall
performance and commitment towards the organization.
 CONCLUSIONS

Compensation should be aligned with the business strategies, mission and

value statements of the companies

High Need for Talented Employees

To reduce attrition rate, compensation management could be used as a

strategic tool.

Effective Implementation of Compensation strategy would bring in fruitful

results for the compnay and retain the best employees.