Administering the Compensation Program

Objectives
Maintain internal equity Within the parameters of

discipline, function, and responsibilities, employees shall be paid similarly for similar work. Maintain external competitiveness through a salary structure . For higher education related positions. Base salary increase decisions on recognizing performance, retaining our best employees, maintaining market alignment and supporting internal equity. Create compensation structures and strategies that respond to and support organization priorities, changes, and needs. For all other staff positions, the market is based on the local, regional, and/or national markets, depending on the position.

Compensation Administration Process

Classification of rewards

Total compensation

Financial (extrinsic rewards)

Non -Financial (intrinsic rewards)

Direct

Indirect

Satisfaction derived from job

Praise and Rewards

Components of Financial Compensation

Direct Indirect

Benefits
Base pay Wages Salaries Variable Pay Incentives -Individual -Group/team -organizational Provident Fund Gratuity Maternity Leave Health plans Medical leave Mandatory voluntary Vacations Breaks Holidays Security Plans Pensions Educational assistance Recreational programs

Base pay
The direct financial compensation an individual

receives based on the time worked Two bases of calculation - Hourly/wage: payment for the number of hours worked - Salaried : receive consistent payments at the end of specific period regardless of number of hours worked

Variable pay
- any plan that ties pay to productivity or

profitability. (i.e)The standard by which managers tie compensation to employee effort and performance. - it is linked to individual, group, or organizational performance and not to time worked Incentive Pay Programs Establish a performance threshold to qualify for incentive payments. Emphasize a shared focus on organizational objectives. Create shared commitment in that every

Types of incentives
Individual Incentives
Group/team Incentives Organizational Incentives

VOLUNTARY BENEFITS
Educational benefits

- Employees spouse education assistance( Motorola on international assignments ). - ONGC,NIIT ,ADITYA BIRLA GROUP, HLL sabbaticals (paid/non-paid) are provided to employees who wish to study. - Meritorious Children of employees are provided opportunity of higher education with loan benefits in BPCL, CPCL etc

 Family

- Paternity leave in HLL, HCL Tech, Yes Bank, Genpact etc., - Wedding anniversary allowance in NIIT, SPIC etc., - Joyful Working Team and Happy Moments Board- LG Electronics - Family day at office- Bharti telecom.

Non financial compensation

Components

Intrinsic motivators are worthwhile as financial package 2. Organization reward high performing employees 3. Psychological rewards that employees receive in recognition of their skills and contributions
1.

Types
Awards

Often used to recognize productivity gains, special contributions or achievements, and service to the organization. Employees feel appreciated when employers tie awards to performance and deliver awards in a timely, sincere and specific way. Rooms of offices are named after the employees in NIIT Recognition awards Recognition has a positive impact on performance, either alone or in conjunction with financial rewards

 Day-to-day recognition from supervisors, peers, and team members is important. Best performer of the month awards in Blue Dart, ALACTEL,XANSA etc., Service awards - Award for the length of service and exactly not on performance - IBM: thanks award - IDEA: appreciation card

Case Study on TCS

TCS was established in 1968 with its

headquarters in Mumbai. It was formed as a division of Tata Sons Limited (TSL), one of India's largest business conglomerates, and was called 'Tata Computer Center.' F C Kohli (Kohli) was appointed as the first General Manager in 1969.