The document discusses compensation management and outlines topics that will be covered in lecture sessions, including: job evaluation techniques and processes; wage and salary administration concepts; incentive plans; and employee benefits. Job evaluation is defined as systematically analyzing and evaluating jobs to determine their relative worth. Key techniques include point rating, factor comparison, and decision band methods. Wage administration considers attracting talent, retention, legal requirements, and different wage plans. Reward and recognition programs include financial and non-financial incentives.

1. COMPENSATION MANAGEMENT
Points to be discussed in the Lecture Sessions:
 Definition and objectives of Job Evaluation
Process and techniques of Job Evaluation.
Advantages and Limitations of Job Evaluation.
Concept of Wage and Salary Administration.
National Wage Policy.
Concepts of Rewards.
Types of Incentives plans.
Employee benefits.

2. JOB
EVALUATION
JOB EVALUATION is the systematic process of analyzing and
evaluating jobs to determine the relative worth of each job in an
organization.
…..Basis for compensation management.
…..Job Evaluation is the rating of jobs to determine their position
in the job hierarchy.
The objectives of JE :
•Determine the positions and place of a job.
•Manage internal and external consistency in the
compensations.
•Ensure employee satisfaction with respect to the
compensation.
•Basis for classification of new or changed jobs.

3.  Process
of Job Evaluation.
Preparation of a job Evaluation Plan.
Job Analysis
Job Description and Job Specification
Selection of Job Dimensions.
Classification of jobs.
Implementation of the evaluation.
Maintenance.

4. Techniques of Job Evaluation.
Non Quantitative techniques.
Ranking
Relative ranking
Paired Comparison.
Single Factor Ranking.
1. Analyzing Organizational Culture.
2. determining job dimensions.
Job Classification or
Grading
3. Defining Job grades.
4. Classifying jobs with the grade
definitions.
5. Using inputs from employees,
unions etc .
6. Freezing the grades and assigning
monetary value to the key grades.

5. Quantitative Techniques.
Point Rating Method.
Identifying a number of Compensable Factors and determining the degree to
which of these factors is present in the job.
Factor Comparison Method.
Job Factor
Job A
Correct rate
Job B
Correct rate
Job C
Correct rate
Job D
correct rate
Job E
correct rate
1.Skill
10
8
7.50
5
11
2. Effort
5
3
4
4
6
3. Responsibility 3
1
1
1
4
4. Working Conditions.
Decision Band Method.

6.  CONCEPT OF WAGE AND SALARY ADMINISTRATION.
The Wage and Salary Administration maintains equity and
competitiveness in the wage market, reinforcing positive employee
behavior, eliminating wage discrepancies, maintaining good relations .
PURPOSE:
 Attracting talented resources.
Retaining and motivating employees.
Financial Management
Legal requirements.
Concepts of different wages.
• Minimum wage
•Fair wage
•Living wage.

7. Basic Wage Plans.
• Time Wage Plan.
•Piece wage plan
•Skill based pay
•Competency based pay.
•Broad banding.
Variable Compensation Program.
The worker Level-----------Piece rate and time rate systems.
The Managerial Level-----Monetary and non monetary rewards for
achievements of results.
 The Group Level-----------Incentives for group performance.

8. Executive Compensation.
Steps to design an effective executive compensation plan.
i. Review the existing executive compensation plan.
ii. Analyze the organizational Objectives.
iii. Retention Scheme.
iv. Consideration on funding and other factors.
v. The final plan
vi. Information about the compensation plan to the
stakeholders.

9. Wage Differential:
…….Differences in wages paid for same or similar work because
of various reasons .
• Individual level.
•Organizational Level.
•Occupational Level.
•Industry Level.
•Regional Level.
How Wage fixation takes place?? Who decides??
 Collective Bargaining or negotiation.
 Government Authorities( Pay Commission and Wage Board).

10. Concept of Reward.
Extrinsic Reward
Intrinsic Reward.
Financial Rewards.
Nonfinancial Rewards.
Performance based rewards
Membership based rewards.

11. Non Monetary Incentives
 Recognition.
 A challenging assignment.
 Additional responsibility.
 Free gifts and free vacations.
 Awards.

12. Long Term Plans.
:
a. Annual Bonus.
b. Profit Sharing: Distribution plan, Deferred plan,
Combination plan.
c. Gain Sharing:
d. Employee Stock Option plans: ESPP, Restricted
Stock Plan, ESOS, Stock appreciation Right, /Phantom
Shares, Phantom Stock, Premium priced options.

13. Employee Benefits
• Free or subsidized lunches.
•Study Leave.
•Medical facilities to the employee
and his family.
•Company Sponsored
Study.
•Paid holiday.
•Provident Fund and gratuity.
•Club Membership.
•Employee Insurance.
•Recreational Facilities.
•Maternity Leave.
•Credit Cards and tax
assistance.
•Child care centres.
•Educational allowances for
children.
•Merit scholarship for employees
children.
•Company accommodation and
conveyance.
•Cafeteria and rest rooms.
•Interest free loans.

14. Modern Concepts in Employee Benefit Schemes.
 Golden Parachute: Continuation of the salary, Bonus and
perquisites, Retirement benefits, Vesting of
stock incentives.
 Cafeteria
Benefit Plan.

15. THANK YOU

16. DEFINITION OF FACTORS USED IN RATING JOBS.
 Education
Training
Experience
Mental Efforts.
Physical efforts
Visual Attention.
Initiative.
Responsibility.
Working conditions.
Physical Hazards.