1. Presented By: Apurv Kumar
Aradhya Srivastava
Aditi Singh
Deepak Kapoor
Deepika Gupta
Dipannita Banerjee

2. Introduction
 Human Resource is the most vital resource for any
organization.
 It is responsible for each and every decision taken, each
and every work done and each and every result.
 Employees should be managed properly and motivated by
providing best remuneration and compensation as per the
industry standards.
 The good compensation will also serve the need for
attracting and retaining the best employees.

3. Compensation
Compensation is the remuneration received by an employee in
return for his/her contribution to the organization.
 It is an organized practice that involves balancing the work-
employee relation by providing monetary and non-monetary
benefits to employees.

4. Needs For Compensation
 When managed correctly, it helps the organization achieve
its objectives and obtain, maintain, and retain a productive
workforce.
 Compensation is a key factor in attracting and keeping the
best employees and ensuring that your organization has
the competitive edge in an increasingly competitive world.
 Without adequate compensation, current employees are
likely to leave and replacements will be difficult to recruit.
 The outcomes of pay dissatisfaction harm productivity and
affect the quality of work life.

5. Compensation System
 Indirect
 Protection Programs
 Medical Insurance
 Life Insurance
 Disability Income
 Pension
 Social security
 Direct
 Base Pay
 Salary
 Wage
 Merit Pay

6. Cont..
 Indirect
 Pay For Time Not
Worked
 Vacations
 Holidays
 Sick Leave
 Jury Duty
 Direct
 Incentive Pay
 Bonus
 Commission
 Piece Rate
 Profit Sharing
 Stock Option
 Shift Differential

7. Cont..
 Indirect
 Services And
Perquisites
 Recreational
 Facilities
 Car
 Financial Planning
 Low-Cost or Free
Meals
 Direct
 Deferred Pay
 Savings Plan
 Stock Purchase
 Annuity

8. Employee Satisfaction And Motivation Issues
In Compensation Design
 People have no basic or Instinctive need for money, A
commodity that is important only if it can satisfy others
needs.
 Organization frequently overestimate the value workers
place on monetary reward.
 For example : If money were the primary motivation for
working why would hourly employees object to over time,
given the premium rate of pay associated with it???
 The EQUITY and EXPECTANCY theories can help
explain employees reaction to compensation systems

9. Equity Theory
 Equity is balance between the inputs an individual brings
to a job & the outcomes he or she receives from it.
 Employees inputs includes experience, education, special
skills, efforts and time worked.
 Outcomes includes pay, benefits, achievement,
recognitions, and any other rewards.
 Inputs and outcomes are in different units, and are hard to
compare to each other directly.
 Equity theory suggest that individuals determine whether
they are being fairly treated by comparing their own
inputs/outcomes ratio to the input/outcome ratio of others.

10. Cont…
Person Comparison Others
My Rewards(outcomes) Other’s Rewards Equity
My Contributions(inputs) Other’s Contribution
My Rewards(outcomes) Other’s Rewards Inequity
My Contributions(inputs) Other’s Contribution (under reward)
 Action to restore equity from Under – reward Inequity
 Person could ask for a raise in salary.
 Person could reduce contributions (work less hard)
 Person could try to get others to increase contribution(work harder)
 Last resorts : quit or choose another comparison other.

11. Cont..
My Rewards(outcomes) Other’s Rewards
My Contributions(inputs) Other’s Contribution
Inequity(over reward)
 Action to restore equity from Over –Reward Equity
 Person could increase contribution
 Person could ask for a pay cut
 Person could attempt to get other a raise
 Person could attempt to get other to reduce his or her
contribution
 Last restore quit the job or choose another comparison

12. Designing equitable compensation
system
 Three element of equity can be distinguished as external,
internal and individual.
 External equity refers to comparison of similar jobs in
different organizations.
 Internal equity refers to the relationship among the jobs
within a single organization.
 Individual equity refers to comparison among the individual
in the same job with the same organization

13. Internal equity
To measure the value of jobs in relation to organizational
objectives rewards are usually based on important
components to make one job worth more than other these
aspects called compensable factors.
 The five most frequently used job evaluation methods
are:
 Job ranking
 Job grading
 The points method and
 Factor comparison

14. Job evaluation methods..
The major purpose of job evaluation is to determine relative worth
of the jobs within an organization.
Basis for job hierarchy
Non quantitative Quantitative
Job v/s job Job ranking Factor comparison
Job v/s scale Job grading Point method

15. External equity
 There is no absolute way to rate pay for a job
 Setting pay rates, organization seek to integrate the
external information with what they have learnt through
internal evaluation of jobs this process is called pricing the
wage structure.
 Wage and salary surveys
 Identifying key jobs
 Selecting organization to survey
 Collecting data
 Pay level policy

16. Individual equity
 Wage grades are established and all the jobs within the
grade are paid identically.
 Designing pay ranges
 Establishing pay ranges
 Broad branding
 Above and below range employees
 Setting individual pay
 Seniority
 Merit pay
 Skilled based pay

17. Linking pay to performance
“Employers believes that reward in general and incentives in
particular influence performance.”
 Reason to link pay to performance
 Motivation
 Expectancy
 Instrumentality
 Valence
 Retention
 Productivity
 Cost savings
 Organizational objectives

18. Benefits
The major reason for the increased attention in benefits is
costs.
 Role of benefits:
 To attract new employees
 To retain the customers
 Types of benefits:
 Mandatory protection programs
 Social security
 Unemployment compensation
 Workers compensation

19. Cont..
 Types of benefits
 Compensation for time not work
 Holidays
 Vacations
 Sick leave
 Personal days
 Other leave

20. Other benefits
 Child care assistance
 Wellness program
 Educational assistance
 Insurance benefits
 Workers
 Retirement benefits
 Social security
 Pension plan
 Cash balance pension plan
 Early retirement plan

21. Examples of different organizations
compensation and benefits plan
 Google
 Procter & Gamble
 Apollo
 Wipro

22. Google
 Health care , plus on-site physician and dental care
 Vacation days and holidays, and flexible work hours
 Maternity and parental leave
 Adoption assistance
 Google Child Care Center
 Fuel Efficiency Vehicle Incentive Program
 Employee discounts
 Onsite dry cleaning

23. Procter & Gamble
 Financial Benefits & Compensation
 Health & Family-Friendly Benefits
 Vacation & Personal Time-Off
 Employee Engagement.
 Community Involvement

24. Apollo Hospitals
 Benefits include the traditional medical and dental.
 401k, company-paid life insurance.
 Child care subsidies
 Flex time
 Educational assistance and
 Professional development programs.

25. Wipro
 Flexible Benefits.
 Medical Assistance Plan and Medical claim benefits.
 Group Life Insurance Program and Employee Deposit
Linked Insurance (EDLI) Program.
 Wipro Cares “Mitr”
 Kids @ Wipro (fun way of learning)
 Fit for Life.
 Eco Eye.