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NEW TRENDS IN COMPENSATION MANAGEMENT

Dissertation Submitted
To
Babasaheb Bhimrao Ambedkar University
For the award of the degree of
MASTER OF BUSINESS ADMINISTRATION
By
SHIVMANGAL GUPTA
ENROLLMENT NO. 772/16
ROLL NO. 108091
Under the guidance of

Prof. KUSHENDRA MISHRA


(Associate professor)

Department of Rural Management


School of Management Studies
Babasaheb Bhimrao Ambedkar University
Vidya Vihar, Rarbareli Road
Lucknow-226025
India
May’2018

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CERTIFICATE

Ref. no.
Date-
This is to certify that the dissertation on “New Trends in Compensation Management”
which is being submitted by Mr. Shivmangal Gupta, for the award of the degree of Master of
Business Administration in Human Resource Management to the Babasaheb Bhimrao
Ambedkar University, is an original record of her own research work carried out by her under
my supervision. To the best of my knowledge, the matter embodied in this dissertation has
not been submitted to any other University or institution for the award of any degree.

Supervisor

Prof. KUSHENDRA MISHRA

(Associate professor)

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Date……………

DECLARATION

I declare that the Dissertation entitled Study on “New Trends in Compensation


Management” submitted by me for the award of the degree of Master of Business
Management of Department of Rural Management, and School for Management Studies,
BabasahebBhimraoAmbedkar University (A Central University) is my own work. The
dissertation has not been submitted to for any other degree of this university or any other
University.

Name: Shivmangal Gupta


Enrolment No: 772/16
Roll No. 108091

Prof. Kushendra Mishra

(Associate Professor)

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Acknowledgement

I am using the opportunity to express to my sincere gratitude to my supervisor prof.


Kushendra Mishra, Department of Rural Management, Babasaheb Bhimrao Ambedar
University who supported me throughout the course of the dissertation review. I feel greatly
indebted to him for this critical evaluation of my work and his valuable suggestion. Without
his supervision and constant guidance, this dissertation would not have been possible.

I have been immensely benefited from the discussion over this dissertation review with my
supervisor. I am very thankful to him for sharing his expertise and his truthful and
illuminating views on a number of topics related to this dissertation.

I would also like to thank my colleagues for their co-operations and help with various aspects
of the dissertation. Their healthy criticism as well as support has assisted me a lot to come up
with this work.

In the end, I place on record, my sense of gratitude to one and all, who directly, have lent
their in this work.

Thank You!

Shivmangal Gupta

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ABSTRACT

In the current Indian market as well as worldwide the level of competitiveness is growing
that making the things tougher for employment of average candidates in the contemporary
days and tough for company to get a quality of employees in their company too. So the
purpose of my research to analyse and surveying the “Emerging trends in compensation
management” and to represent as per my best of effort and my knowledge

Now the current situation in India and outside India living standards are so high in this
regards companies are considering about that the needed of general public is high as per new
generation of standards. So company provides that kinds of all compensation as required to
employees but those who are more eligible to the job and companies are also considering of
government legislation of labour practices and compensation systems which need to a
common people in their normal life to fulfil their minimum requirements and companies are
considering of CSR.

The approaches of new trends in compensation management of a company must be


changeable according to the current market and competitiveness and they must provide to
their employees more compensation as per company’s performance that an employees are
meeting their requirements.

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CONTENT

S.NO. TITLE PAGE NO.

1. INTRODUCTION OF COMPENSATION MANAGEMENT 1

2. IMPORATANCE OF COMPENSATION MANAGEMENT 2

3. TYPES OF COMPENSATION 4

4. ROLE OF COMPENSATION MANAGEMENT IN AN 9


ORGANISATION

5. OBJECTIVE OF COMPENSATION 11

6. TOP FIVE TRENDS IN COMPENSATION 12

7. STRATEGIES OF NEW TRENDS IN COMPENSATION 18


MANAGEMENT

8. EMERGING TRENDS IN COMPENSATION MANAGEMENT 20

9. RESEARCH METHODOLOGY 30

10. NEW TRENDS IN IT MARKET 32

11. NEW TRENDS IN INSURANCE SECTOR 33

12. DATA ANALYSIS AND INTERPRETATION 35

13. FINDINGS 49

14. LIMITATIONS 50

15. RECOMMENDATION 51

16. CONCLUSION AND SUGGETIONS 52

17. BIBLIOGRAPHY 53

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INTRODUCTION OF COMPENSATION MANAGEMENT

In simple terms, compensation is everything that a company offers its employees in return for
their talent and time. When organized the right way, compensation dollars can be
strategically leveraged to reduce turnover, boost employee engagement and attract top talent.
The purpose of compensation management is to make the most of company dollars in a way
that rewards employees for their work.

Meaning of Compensation

“Compensation is a systematic approach to providing monetary value to employees in


exchange for work performed. Compensation may achieve several purposes assisting
recruitment, job performance, and job satisfaction.”

“Compensation is a tool used by management for a variety of purposes to further the


existence of the company. Compensation may be adjusted according the business needs,
goals, and available resources.”

“Compensation may also be used as a reward for exceptional job performance. Examples of
such plans include: bonuses, commissions, stock, and profit sharing, gain sharing.”

“Employee compensation refers to all forms of pay or rewards going to employees and
arising from their employment, and it has two main components viz direct & indirect.”

“Direct financial payments in the form of wages, salaries, incentives, commissions and
bonuses and there are indirect payments in the form of financial benefits like employee paid
insurance and vacations.”

So in nutshell we can say that employee compensation refers to all the forms of pay or
rewards going to employees and arising from their employment.

“Compensation includes direct cash payments, indirect payments in the form of employee
benefits & incentives to motivate employees to strive for higher levels of productivity.”

“Compensation is affected by many factors like labour market factors, collective bargaining,
government legislation & top management philosophy regarding pay benefits.”

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“Process of compensation management is to establish & maintain an equitable wage & salary
structure & an equitable cost structure .it involves job evaluation, wage & salary survey,
profit sharing &control of pay costs.”

Importance of employees’ compensation or reward system

 Compensation or reward system of the organisation is most influencing factor for


employee motivation, must remember.
 If we observe history of causes of industrial disputes, employee compensation a
reward system issues were the main reason in most cases.
 Good compensation system of rewards system in the organisation will minimise
industrial disputes and helps in maintaining peace and harmony within the
organisation.
 Compensation system plays a key role in employee attrition.
 Compensation system mostly influences retention of employee in the organisation.
 Most of employee satisfaction depends upon compensation a reward system of
organisation.
 Effective compensation system builds employer brand, which plays a key role in
attracting talent.
 Effective compensation system makes employee to put his full efforts for
achievement of organisation's goals and objectives.
 Effective compensation system builds initiative towards work, which in turn enhances
the productivity of organisation.
 Effective compensation makes employees feel belongingness towards the
organisation.

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Compensation: an overview

Compensation management is one of the most challenging human resource areas because it
contains many elements and has a far-reaching effect on the organisation's goals. The purpose
of providing compensation is to attract, retain and motivate employees.

There are two main types of financial compensation.

1. Direct financial compensation - the pay that a worker receives as wages, salaries,
commissions and bonuses, and
2. Indirect financial compensation - all financial rewards that are not included in direct
compensation (i.e. benefits).

An example of direct financial compensation is the money the worker receives as wages at
the end of the week, or as a salary paid at the end of the month. Many companies pay salaries
straight into the employee's bank account.

An example of indirect financial compensation is when the company contributes to an


employee's housing subsidy or a pension plan.

Not all compensation is financial. A worker can get great satisfaction from his work and
enjoy the environment in which he works. This is called non-financial compensation and
cannot be counted in terms of money. For example, a veterinarian might enjoy working
outside, going to farms to treat animals and deliver calves. A publisher might enjoy the
challenge of producing books that will enrich people's lives.

It is not always possible to provide a perfect pay package (the agreement between the
organisation and the employee about how much money and other benefits the employee will
receive). Because of this, some companies allow their employees to work out their own
compensation packages.

The most important thing is to note that compensation plays a major role in attracting talent
from the market and compensation system of the organisation is Key factor for creating
employer brand, which is most important factor for attracting talent people. Having talent
people for the organisation is a major asset for the organisation development"

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Components of Compensation

There are two categories of compensation direct and indirect:

"Compensation includes direct cash payments, indirect payments in the form of employee
benefits and incentives to motivate employees to strive for higher levels of productivity"

In respect of the above explanation, we can classify there components as follows:-

Wage and Salary:

Wage and salary are the most important in the organization as it is decided on the size and the
structure of the organization. Wage refers to be paid to the employees on hourly basis such as
in UK minimum wages are paid at £5.93 per hour. Therefore Salary is referring to as
recompense paid to the white collar employees within an organization. Wage and salary are
paid on fixed period of time and it's not related to the production.

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Incentives

Wage and salaries are not the only compensation paid by the employer to the employee there
is some additional pay which employee gets in contrast of their better performance. These
incentives are basically given on individual basis or a group as a whole.

The term incentive means an inducement which rouses or stimulates one to action in a
desired direction. An incentive has a motivational power; a large number of incentives the
modern organisations use to motivate their employees may be broadly grouped into (i)
financial incentives, and (ii) non-financial incentives.

Fringe benefits

There are some long term benefits which the employees used to get such as like provident
fund, gratuity and pension. Some benefits are given on the happening of particular events like
medical benefits, accident relief, health and life insurance and also few facilities uniform,
canteens and recreation, etc. these benefits are usually fringe benefits.

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Types of Fringe benefits:

1. Payment for Time not worked:

Hours of work: Factory’s Act, 1948 specifies that no adult workers shall be required to
work in factory more than 48 hours a week. In some organisations number of working hours
per week is less than the legal requirements.

Paid Holidays: According to Factory’s Act, 1948 an adult worker shall have a weekly paid
holiday, normally Sunday. When a worker is deprived of weekly paid holidays he/ she is to
be compensated with the same number of holidays in the same month. Some organisations
offer two weekly paid holidays.

Shift Premium: Workers working on odd shift are to be compensated with more than the
normal wage rate, generally known as premium.

Holiday Pay: Generally organisations offer double the normal rate to those workers who
work on holidays.

Paid Vacation: Workers in mining , manufacturing and plantation who have worked for 240
days in year are entitled for paid vacations at a rate of 1 day for every 20 days worked in case
of adult workers and 1 day for every 15 days worked in case of child workers.

2. Employee Security:

Physical and job security to the employees should also be provided with a view to ensure
security to the employee and his family members. When the employee’s services get
confirmed, his job becomes secures. Further, a minimum and continuous wage or salary gives
a sense of security to the life.

Retrenchment Compensation: The Industrial Disputes Act, 1947 provides for the payment
of compensation in case if lay off and retrenchment. The non-seasonal industrial
establishment employing 50 or more workers have to give one month’s advance notice or one
month’s wages to all the employees who are retrenched after one year’s continuous service.
The compensation is paid at the rate of 45 day wage for every completed year of service.
Workers are eligible for compensation as stated above in case of closing down of
undertakings.

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Lay Off Compensation: In case of lay off the employees are entitled to lay off compensation
at the rate equal to 50% of the total of the basic wage and dearness allowance for the period
of their lay off except for the weekly holidays. Lay off compensation can normally be paid up
to 45 days a year.

3. Safety and Healthy:

Employee’s safety and health should be taken care in order to protect the employees against
accidents, unhealthy working conditions and to protect the worker’s productive capacity. In
India, Factory’s Act, 1948 stipulated certain requirements regarding working conditions with
a view to provide safe working environment. These provisions relate to cleanliness, disposal
of waste and effluents, ventilation and temperature, dust and fumes, artificial humidification,
overcrowding, lighting, urinals, drinking water, latrines, spittoons etc.

Provisions relating to safety measures include fencing of machinery, work on or near


machinery in motion, employment of young persons on dangerous machines, self-acting
machines, casing of new machinery, hoists and lifts excessive weights, lifting machines,
chains, ropes explosive or inflammable dust , gas etc.

4. Workmen’s Compensation:

In addition to safety and health measures, provisions for payments of compensation have also
been made under the Workmen’s Compensation Act, 1923. The Act is intended to meet the
contingencies of death and invalidity of worker due to employment injury and occupational
diseases specified under the Act as the sole responsibility of employer. Under the Act the
amount of compensation depends upon the nature of injury and monthly wages of the
employee. Dependants of the employee are are eligible for compensation in case of death of
the employee.

5. Heath Benefits:

Sickness benefits: Sickness benefit is roughly 50% of average daily wages and is payable for
91 days during 2 consecutive benefit period.

Medical benefit: The Employee’s state Insurance Scheme provides full medical care in the
form of medical attendance, treatments, drugs and injections, specialist consultation, and

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hospitalization to insured person and also to members of their families where the facility has
been extended to the families.

Temporary Disablement benefits: TDB is payable to an employee suffers from


employment injury or occupational diseases and is certified to temporarily incapable of work.

Permanent Disablement Benefit: PDB is payable to an employee who suffers permanent


residual disablement as a result of employment accident or occupational diseases. The
maximum rate of PDB can be equal to TDB.

Maternity Benefits: Maternity benefits is payable to and insured women in the following
cases subject to contributory conditions: – (a) Confinement, (b) Miscarriage or medical
termination of pregnancy (MTP), (c) sickness arising out of pregnancy.

6. Voluntary Arrangement:

However, most of the large organisations provide health services over and above the legal
requirements to their employees free of cost by setting up hospitals, clinics, dispensaries, and
homeopathic dispensaries. Company’s elaborate health service programmes includes:

Providing health maintenance services, emergency care, on the job treatment for minor
complaints, health counselling, medical supervision in rehabilitation, accidents and sickness
prevention, health education programmes, treatment in employee colonies etc.

7. Welfare and Recreational facilities:

These benefits include canteens, consumer stores, credit societies, housing, legal aids,
employee counselling, welfare organisation, holiday homes, educational facilities,
transportation, picnics and parties etc.

Perquisites or Perks

Sometime it is very important for the manager to retain their employee and also pushing up
their job performance by giving them special benefits like pick and drop service or company
car, holiday pay and cub membership etc.

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Below are listed some types of perks that employers offer. The list is in no way
exhaustive:

• Provision for medical facilities


• Employee stock options
• Company provided car
• Counselling services
• Travel allowances
• Club membership
• Relocation expenses
• Credit cards provided by the company
• Medical expense reimbursement
• No and low interest loans
• Special dining privileges
• Company shares
• Reimbursement to children’s tuition fees
• Spouse travel
• Special living accommodations away from home

ROLE OF COMPENSATION AND REWARDS IN THE ORGANIZATION

 To attract capable employees to the organization


 To motivate them toward superior performance
 To retain their services over an extended period of time
 To establish a positive corporate reputation
 To increase or maintain morale/satisfaction
 To achieve internal and external equity
 To reduce turnover and encourage company loyalty
 Compensation plays a very important role in attracting the best talent in the
organization, as well as, retaining them for a long time.
 It helps in creating a solid human resource base in the organization which enhances
the productivity, efficiency and overall quality in the organization.
 A sound human resource infrastructure with employees possessing proper set of skills
for right job, is critical to the success of any organization and

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 It is perfectly achieved via a suitable compensation plan
 In order to avoid high attrition levels, compensation plays a key role in retaining the
top talent in the organization.
 To maintain high standards of productivity and service, the organization must
motivate employees.
 A suitable compensation, incentives and rewards program is the key motivator in any
organization today.
 In order to motivate employees and boost their morale to achieve desired performance
levels and goals, compensation plays a key role
 In order to achieve more incentives and compensation, employees raise their
performance levels.
 In the absence of appropriate compensation plans, employees will not be motivated to
perform efficiently and will always look for changing the current organization.
 Organizations should reward employees for their specific contributions to the
achievement of the organizational goals and objectives.
 In today’s dynamic business environment where innovation and efficiency is the key,
compensation is a crucial tool to reward the best performing employees for their
important role in success of the organisation.
 If there is an appropriate compensation system, it will encourage normal worker to
perform better & achieve the standards fixed.
 It would not penalize the workers for the reasons beyond their control and would not
result in exploitation of workers.
 It will raise the morale, efficiency and cooperation among the workers.
 It would embody itself the principle of equal work & equal wages and would provide
satisfaction to the workers.
 It would help management in complying with various labour acts
 It would bring amicable settlement of disputes between the workers’ union and
management.

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Objective of Compensation

The objective of the compensation function is to create a system of rewards that is equitable
to the employer and employee alike. The desired outcome is an employee who is attracted to
the work and motivated to do a good job for the employer. Patton suggests that in
compensation policy there are seven criteria for effective-ness. Compensation should be:

 Adequate Minimal governmental, union, and managerial levels should be met.


 Equitable each person should be paid fairly, in line with his or her effort, abilities,
and training.
 Balanced Pay, benefits, and other rewards should provide a reasonable total reward
package.
 Cost-effective Pay should not be excessive, considering what the organization can
afford to pay.
 Secure Pay should be enough to help an employee feel secure and aid him or her in
satisfying basic needs.
 Incentive-providing Pay should motivate effective and productive work.
 Acceptable to the employee the employee should understand the pay system and feel
it is a reasonable system for the enterprise and him or herself.

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Top Five Trends in Compensation and Benefits for 2017

We saw some long-anticipated predictions materialise in 2016. We can expect to see these
exciting transitions continue this year as we move into the Fourth Industrial Revolution,
which has launched many deep and thoughtful conversations on thriving in a world that is
rapidly becoming reliant on digital technology.

Here are some of the key themes to look out for in our predicted trends for 2017:

FLEXIBILITY

Today's technology is enabling more and more professionals to change their mind-sets about
giving up full-time employment for contract-based opportunities that offer greater control
over their time, growth, education, and job security. This trend is largely being driven by
those with bulkier resumes and longer tenures especially in STEM (science, technology,
engineering and mathematics) industries. The job market is filling up with new and exciting
endeavours, but there are a limited number of qualified professionals to fill the need.

Managing contractors – who may only be around for 6-12 months – requires a creative and
systematic approach to crafting fair pay and benefits arrangements that can attract, motivate,
and protect them. Note that a majority of these employees will be in life stages where time for
family and personal growth will take priority. But, the returns to reap can be vast and game-
changing for your organisation.

Engaging contingent workers can reduce overhead costs, especially for tax and infrastructure
expenses. Their valuable experiences and insights can introduce much-needed diversity,
dynamism, and agility to your business, and provide cost-effective learning and innovation
initiatives. Moreover, they could become ambassadors for the culture and brand, which can
boost your organisation's reputation and staffing objectives.

TECHNOLOGY

The concept of having greater flexibility in the workplace has been brewing for a long time,
but the administrative demands for implementing custom arrangements was a minefield.
Nowadays, however, with the world changing at a breakneck speed, organisations have to be
ever more robust.

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A mere ten years ago, digital spread sheets and automated charts were all it took to enable
pay strategies. Now there are powerful compensation software products to help perform this
task. These can not only implement flexible arrangements but more importantly, integrate
seamlessly between systems and process, thus enabling linkages between job levelling,
market benchmarking, and compensation analytics. This gives compensation professionals
increased opportunities to strategize further and determine timely solutions that could give
more bang for buck, not to mention save countless hours of manual administration.

PERSONALISATION

Many of the hybrid jobs that now exist weren't even offered five to ten years ago. These roles
will continue to evolve as we speed through the 21st century, which will call for an overhaul
of the traditional compensation mind-set.

Professionals have previously been content to take their salary and expect an across-the-board
approach to pay increases and rewards. But as flexibility in the workplace becomes the norm,
employees will also want their compensation and benefits packages to become more
personalised.

Organisations will see analytics strongly recommending actions to maximise on human


capital by adopting skills-based performance evaluation; customising pay and benefits to
address the employee's life stage and personal needs; and creating alternative paths of career
growth.

It will be worthwhile revisiting your Employee Value Proposition (EVP) and to consider
creating customised rewards programmes for the top talent that are vital to your organisation.
Supplementing analytics with employee insights could steer your EVP towards a more
meaningful goal for both the business and your workforce.

HEALTH AND WELLNESS

While rapid technological advancements of this era have helped to streamline systems and
processes, they have also made the global marketplace even more competitive and
demanding. According to our 2016 Staying@Work Survey, over 50% of employees say
their jobs are a primary source of stress, especially in companies where there is less regard or
prioritisation of personal safety, health, and wellbeing. Numerous studies have linked

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workplace stress with various medical conditions, including cardiovascular disease, obesity,
diabetes, hypertension, certain types of cancer, and mental health issues.

However, many employers still view health and wellness as an individual responsibility,
preferring to stick with mostly hands-off approaches like providing medical insurance, sick
leaves, and occasional off-site activities.

On the other hand, there is evidence that management-led health and wellness programmes,
which are thoughtfully planned and coordinated, result in a happier and healthier workplace –
with less distress, higher engagement and increased wellbeing. Productivity can be enhanced,
and both hard and soft health care costs would decrease."1 Successful health and productivity
strategies have resulted in 6.5 fewer missed work days, twice higher engagement on the job,
25% fewer employees with hypertension, 24% fewer employees with high blood sugar levels,
and 50% higher revenue per employee, among many other benefits.2

PAY AND TRANSPARENCY

Base salary continues to be the number one driver of attraction and retention for employees in
Asia Pacific3. It is as crucial as ever to not only get your compensation right – but to ensure
you are communicating openly and honestly to your workforce about pay. People now know
that performance evaluation is a two-way street; the question of "How can you contribute to
our bottom line?" applies to both the employer's business objectives and the employee's
personal needs.

What factors are considered in determining pay? Is compensation benchmarked against


similar roles and skillsets in the market? How is the company doing financially? Can the
employer afford to offer salary increases in the next year?

Organisations that stick with the old rhetoric – of only equating salary to the job and
performance rating – risk causing confusion for their employees and may appear more unfair
or untrustworthy. Employees are more likely to trust and engage with employers who openly
communicate and explain their compensation and benefits decisions.

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5 Compensation Management Trends Taking Shape in 2017

Keeping an eye on compensation management trends can be helpful for HR professionals as


they strategize and develop pay plans for their own organizations. As we head into a new
season and make our way through the final quarter of the year, here are a few leading
compensation trends to look out for:

1. Improving Benefits Decisions

HR Daily Advisor cites a study in which the majority of respondents (81%) listed managing
costs as a top benefits priority, while 50% stated that helping workers to make better benefits
decisions was also a top concern.

2. Breaking up Bonuses

As part of a way to move towards a more on-going approach to performance management,


some organizations have begun breaking bonuses up into smaller, more regular amounts,
according to HR Zone. In doing so, employers can make rewards and praise a more on-going
effort instead of a yearly “event” to support a fulfilling company culture.

3. Strategically Rewarding Top Performers

The Balance states that forward-thinking organizations should aim to offer a variable
compensation rate of 7-8% in addition to base pay to top-performing staff members. In doing
so, you can use your compensation structure to incentivize high performance and
communicate your expectations, which brings us to our next point.

4. Using Compensation to Communicate

Organizations are now viewing compensation as a tool that can be used to communicate
exactly what’s expected of employees. When management is clear on how pay decisions are
made, employees can understand the “why” – not just the “what” – behind their pay, which
can build trust across the organization.

5. Seeking Better Technology

The study referenced by HR Daily Advisor also shows that more than half of employers are
looking for better compensation software to reduce workload. If your organization is like the
majority, upgrading your compensation tool is one of the best decisions you can make. Not

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only will it reduce workload; it can also help you stay in line with the other four leading
compensation trends listed here.

The best way for your company to approach compensation will depend on your
organizational strategy, culture, and a number of other differentiating factors. Nonetheless,
monitoring compensation trends is essential to making sure you’re paying fairly and
competitively in today’s job market.

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includes applicant tracking software, compensation planning software, total rewards software,
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New Trends in Compensation Management Strategy

I was recently invited to speak at a roundtable where I was asked what trends I am seeing in
the marketplace for compensation programs and how technology can support same. Despite
data suggesting the simplification of comp plans, I actually see the opposite. Organizations
are using comprehensive compensation as a strategy for creating environments that reward
employees and establish a strong ethos of employee engagement. This trend brings with it an
increased demand for flexibility in compensation systems. It is not uncommon for companies
today to have bonus plans with a large number of designs, calculations, and components. I
work closely with one client who has 82 bonus plans with over eight components in each. To
be successful, companies like this must be prepared to support the implementation of these
plans.

Another interesting trend is the increase in frequency by which companies are accessing their
compensation systems. Traditionally, there were a select few users utilizing their system
1x/2x per year – typically only during their comp cycles. Now, up-line/down line managers,
finance personnel and general HR practitioners are all increasingly utilizing their systems for
strategic purposes – often with year-round usage. Transparency in earnings is also growing in
importance, leading to a large increase in demand for additional reporting functionality and
customized statements.

From a broader technology based perspective, I see 3 significant trends

Globalization: In a global economy, many companies have employees residing and working
in multiple countries. The comp function must adhere to the ways that pay practices differ
around the world, and programs/processes need to be put in place that will enable the
company to effectively implement their comp programs, in the local language/currency, and
allow them to compete for top talent. Enabling technologies need to either have these market
practices built in or be configurable enough to support them. If not, the comp team is left with
manual interventions and/or workarounds.

Mergers & Acquisitions: Many companies have a business strategy that includes growth
through strategic acquisitions. Depending on the size and impact of these mergers, it can take
an extended period of time to integrate HRIS systems and compensation programs. The
compensation function is often asked to manage common processes, such as annual merit,

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before systems are even combined. This requires compensation technologies that can process
different approaches for varied groups of employees.

Predictive Analysis / Modelling: As systems get smarter and capture more information,
company executives are looking to the compensation team to provide more than just basic
analytics. Modelling allows for forecasting of total compensation costs based on different
“What If” planning scenarios. Comp professionals are increasingly analysing data year-
round, allowing them to predict what will happen in the future, and proactively recommend
course corrections when necessary.

Comprehensive compensation management programs are an integral part of attracting and


retaining the right employees that will help your organization reach its corporate goals.
Utilizing the right technology will help you implement these programs, giving you a
competitive advantage and ensuring your continued success.

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New trends in compensation management

The following are the new trends in compensation management:

1. Insurance Scheme or Group medi-claim


2. Personal Accident insurance scheme
3. Company leased accommodation
4. ATM Facility
5. Corporate credit card
6. Club membership
7. Cellular phone / laptop
8. Personal health care (regular medical check-up)
9. Educational facility (for higher education)
10. Cultural program
11. Wedding or birthday gift
12. Employee referral scheme
13. Maternity leave
14. Paternity leave
15. Work life balance
16. Pay transparency
17. Broad banding
18. Variable pay (incentive pay)
19. Flexible benefits

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Medi-claim Insurance Policy Features in Reliance Group

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enterprises offer their employees access to timely medical care. The Reliance Group
Mediclaim Insurance Policy not only provides medical coverage for your employees, but also
gives you tax benefits.

Key benefits of our group health insurance policy

 Lowers the employee turnover


 Discount in renewal premium for claim-free experience with family members
 Lower premium costs
 Customized group medi-claim policy
 Cover for all members
 Cashless claims across network hospitals
 Tax benefits
 Regular health check-ups
 Day care procedures covered

Reliance Group Medi-claim Insurance Policy Coverage

Hospitalization Expenses covered include:

 Room charges and operation theatre charges


 Fees of medical practitioner, anaesthetist, and consultants
 Nursing expenses

Medicine, Consumables, and Diagnostic Expenses covered include:

 Cost of medicines and drugs


 Aesthesia, blood, and oxygen administration expenses
 Cost of surgical appliances, pacemaker, and radiotherapy
 Expenses towards diagnostic material and X-rays, dialysis, and chemotherapy
 Cost of artificial limbs and organs

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Domiciliary Hospitalization

 Medical condition restricting the patient from being shifted to hospital


 Lack of accommodation in any hospital/nursing home

Day Care Treatment

 Coverage for treatment that does not need hospitalization for 24 hours or more

Pre and Post-Hospitalization

 Medical expenses for a specified number of days covered

Value Added Benefits:

The group health insurance policy offers you many more benefits:

 Family floater clause can be added for ensuring your employee’s peace of mind
 Option of day-one cover for maternity, pre-existing illness and for children, without a
waiting period for the cover to commence
 Extra insurance cover for needy employees, so that the buffer sum insured can be
extended to employees who have exhausted their sum insured

2. Personal Accident insurance scheme

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3. Company leased accommodation

Company-leased accommodation is considered a perquisite in the hands of the employee, and


its value is determined as per the income tax rules. On the other hand, in the HRA route, rent
paid by the employee makes her eligible to claim tax exemption in respect of the HRA she
receives

The employer enters into the lease agreement with the landlord, pays the rental deposit and
pays the monthly rent directly to the landlord. The house may be a ‘ready to move in’
accommodation, pre-identified by the company or it could be a house of the employee’s
choice. Opting for company-leased accommodation helps the employee settle down faster in
a new city and the company is also at an advantage because the employee can concentrate on
the new job without the added stress of arranging accommodation. For tax purposes, the
accommodation provided by the company is treated as a ‘perquisite’ in the hands of
employee and is considered to be a part of her taxable salary. The value of such
accommodation is calculated as 15% of the salary or actual rent paid by the employer,
whichever is lower.

‘Salary’ here includes the total salary, but excludes the allowances exempted from tax,
employer’s contribution to the provident fund, any medical benefits paid by the employer and
value of other perquisites like electricity bills, and car or club expenses provided by the
employer. If the rent paid by the employer is more than 15% of the salary, the employee
stands to gain because a part of the rent paid by the employer goes tax free.

Corporate credit card

Nowadays both small and large sized businesses are trying every way to minimize expenses
that are related to traveling or any other purchases done by employees for the benefit of the
enterprises. One of the best ways to cut down unnecessary employee expenses is by creating
an employee credit card policy. To reduce misuse of the company's credit card, the company
should lay out rules and regulations concerning how the business credit card should be used.

However, not many companies are aware of the best ways on how to develop employ credit
card policies. Many business owners always have the desire to create these policies but lack
direction on how to do it. Due to this, here is a vivid description on how companies can
effectively create employee credit card policies.

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PERSONAL HEALTH SERVICES

"Personal health services" are the services that an individual receives from others to address
health problems or for health promotion and disease prevention. It is helpful to consider the
meanings and implications of each of these words. "Personal" is used to connote attention to
improving or maintaining an individual's health state, though that state may directly impinge
upon others, either in the family or community—there are emotional attachments to sick
persons; an individual illness may diminish family resources and capacities; and illnesses
have direct implications for communities, such as in the transmission of communicable
diseases or in alternative uses for scarce clinical-care resources. Thus, a personal illness can
have a profound impact on others, and on the health and well-being of the general public.

"Health" is not an easy term to define (see the discussion elsewhere in this volume), but in the
context of health services, there are important conceptual issues. One, as noted above, is the
role of health promotion and disease prevention in personal health services. Since many
important dimensions of prevention are related to social behaviours or environmental
modifications, they are often outside the usual health care system. Another is defining the
boundary of health care in terms of appropriate themes. At least in the past, various
community health centres and other medical care organizations provided assistance with
housing, clothing, and personal legal matters, as well as referral to religious resources. This is
not an issue of worthiness, but rather the implication here is that the content of medical
services varies and must be explicitly addressed and defined.

Educational facility

In case school or college fees of family members of employee is paid by the employer
directly to the school or college or fee paid by the employee is reimbursed by the employer, it
is a taxable perquisite whether the employee is a specified or non-specified type of employee.

In case school, college etc. is run or maintained by the employer and free educational
facilities are given to the children of employee or any other member of his household, the
valuation of this perk is to be calculated as under.

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Cultural Programme

Organizational culture as having to do with the “behaviour of humans within an organization


and the meaning that people attach to those behaviours.” That’s a bit unhelpful, so they go on
to list a number of factors that contribute to company culture. Here’s the full list:

Company vision, values, norms, systems, symbols, language, assumptions, beliefs, and
habits.

Employee referral scheme

Employee referral is an internal recruitment method employed by organizations to identify


potential candidates from their existing employees' social networks. An employee referral
scheme encourages a company's existing employees to select and recruit the suitable
candidates from their social networks. As a reward, the employer typically pays the referring
employee a referral bonus. Recruiting candidates using employee referral is widely
acknowledged as being the most cost effective and efficient recruitment method to recruit
candidates and as such, employers of all sizes, across all industries are trying to increase the
volume of recruits through this channel.

Benefits of Employee Referral Scheme

Proponents of employee referral schemes claim the benefits to be an improved candidate


quality, 'fit', and retention levels, while at the same time delivering a significant reduction in
recruitment expenditure. However, there are a number of potential drawbacks. One of the
greatest concerns tends to be that relying too heavily on employee referrals could limit
diversity in the workplace, with new staff recruited in the likeness of existing employees.
But, provided that there is already a diverse workforce in place this ceases to be such an
issue.

Maternity Leave

Maternity Benefits in India: The Maternity Benefits Act applies to every establishment in
India. The maximum period for which any woman shall be entitled to maternity benefit shall
be 12 weeks of which not more than 6 weeks shall precede the date of her expected delivery.

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What is the law relating to maternity benefits in India?

The maternity leave and benefits are provided to protect the dignity of motherhood by
providing for the full and healthy maintenance of woman and her child when she is not
working. As the number of women employees is growing, maternity leave and other
maternity benefits are becoming increasingly common. In 1961, the Maternity Benefit Act
was passed aiming at a uniform maternity benefit all over the country. By an amendment No.
29 of 1995 effective from 1-2-1996 a female employee will be eligible for leave with wages
for 6 weeks in case of miscarriage or medical termination of pregnancy or production of such
proof.

Paternity Leave

There is no provision on paternity leave in Indian labour law for private sector workers. The
civil servants (Central Government) however are entitled to paternity leave. A male civil
servant (including an apprentice, probationer) with less than two surviving children, may be
granted Paternity Leave for a period of 15 days before or up to six months from the date of
delivery of the child. If paternity leave is not taken within 6 months of the birth of child, it is
treated as lapsed. Workers on paternity leave are paid their leave salary equal to the pay
drawn immediately before proceeding on leave. The paternity Leave may be combined with
leave of any other kind. The paternity leave cannot be debited against the leave account.
Paternity Leave cannot normally be refused under any circumstances. Similar provisions are
applicable on the adoption of a child under the age of one year.

To be eligible, you must have a contract of employment and have been working for the same
employer for 26 weeks by the end of the 15th week before the week your baby is due.

It is your choice whether you take one or two weeks' paternity leave and when you do so, but
it must begin:

 on the day your baby is born; or


 a number of days or weeks after the birth; or
 From a specific date after the first day of the week the baby is due.

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Work-Life Balance

 Flexi time
 Compressed workweek
 Job sharing
 Telecommunicating
 Part-time work
 Modified retirement
 Employee assistance programme
 Child care assistance
 Elder care assistance

Pay Transparency

Employee wants transparency in pay system. Now a day some organizations are using
transparent pay system. Pay transparency influences employee in

 Fostering trust in management


 Increase employee engagement
 Reducing turnover
 Creating competitive advantage
 Encourage discretionary effort

Broad Banding

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Broad banding means that the number of grade is compressed into relatively small number of
much wider bands.

Wide bands provide for more flexibility in assessing worker to different job groups.

Variable Pay (incentive pay)

 Piece work incentives


 Time work incentives
 Pay for performance
 Merit pay
 Bonuses
 Grade pay
 Gain sharing
 Profit sharing
 Sales incentives
 Commission
 Club membership

Employee Stock Option Plan

An employee stock option plan implies the right of an eligible employee to purchase a certain
amount of stock in future at agreed price.

Shares are given to employees are held in the ESOP trust until the employee retires or leave
the company.

It also provides for tax benefits to the employees.

Flexible Benefits

Flexible benefits allow employees to pick benefit that meet their needs. The idea is to allow
each employee to choose a benefits package that is individually tailored to his or her own
needs and situations.

There are three most popular type of benefit plan are:

1. Modular plan
2. Core-plus option
3. Flexible expending account.

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Modular Plans

 Modular plans are pre-designed packages of benefits, with each module put together
to meet the needs of a specific group of employees.
 So a module designed for single employees with no dependents might include only
essential benefits.
 Another, designed for single parents, might have additional life insurance, disability
insurance, and expanded health coverage.

Core-plus Plans

 Core-plus plans consist of a core of essential benefits and a menu-like selection of


other benefits options from which employees can select and add to the core.
 Typically, each employee is given “benefit credits,” which allow the “purchase” of
additional benefits that uniquely meet his or her needs.

Flexible Spending Plans

 Flexible spending plans allow employees to set aside up to the amount offered in the
plan to pay for particular services.
 It’s a convenient way, for example, for employees to pay for health-care and dental
premiums.
 Flexible spending accounts can increase employee take-home pay because employees
don’t have to pay taxes on the amount they spend out of these accounts.

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RESEARCH METHODOLOGY

Discuss the research design, research problems, important of the study, scope and
significance of the study, source of data, questionnaire, sample design statistically techniques
used, and objective of the study and limitations of the study.

RESEARCH DESIGN:

A research design is an arrangement of conditions for collection and analysis of data in a


manner that aims to combine relevance to the research.

Purpose with economy in procedure. It is the conceptual structure within which research is
conducted and it constitutes the blueprint for the collection, measurement and analysis of
data. It includes an outline of what the researcher will do from within the hypothesis and its
operational implications to the final analysis of data.

The research design used for the study is descriptive design. Descriptive research design
includes surveys and fact finding enquires of different kinds. The major purpose of
descriptive research is description of the state of affairs, as it exists at present.

SOURCE OF DATA:

The relevant data has been collected from the primary sources and secondary sources. The
primary data is collected by a questionnaire form the employees. For this purpose of data
collection, the questionnaire from the employees. For this purpose of data collection, the
questionnaire was circulated among the employees to collect information. The secondary data
is collected by newspaper company journals, magazines websites etc.

QUESTIONNAIRE ADMINISTRATION:

The questionnaire was prepared after counselling with the officer. Employee relations of the
HR department of Airport Authority of India, Luck now. The

Researcher prepared a set of questionnaire.

SAMPLE DESIGN:

A sample of 50 respondents was taken using random sampling. The researcher contacted the
executive personally and brief summary of the nature of the study and details in the
questionnaire were narrated to them.

PERIOD OF STUDY:

The present study had been undertaken for period of period of 6 weeks, in which it had
divided into three stages as such. Stage I is of research problem and collection the literature
of the topic chosen. Stage II is of analysis and interpretations by using different statistical
tools, findings and recommendations.

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STATISTICAL TOOLS USED:

For the purpose of present study percentage analysis was used

GOOGLE Systems of Compensation management:


 Physical fitness (gym)
 Dry cleaning and alteration
 Rejuvenating
 Car wash
 Unrestricted dress code
 Bike repair
 Hair cut
 Theatre
 HRA
 Transport and fuel
 Recreational or cultural program

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Indian IT Market
Indian IT industry in the witnessed in high growth rate in modern day in India. IT industries
are most growing industries in current Indian trends and paying highest compensation.

This sector recruiting is more and more technical and professional people.

The growth rate of recruiting in this sector has been observed as 14.5%.

With the immense recruitment and high attrition rate, organization focuses on higher
competitive packages.

The average increase in the salary during since 2006 was reported as 16%.

The compensation package for an employee is based on various factors such as his/her
educational levels, relevant experience in the industry, job position in hierarchy, skills and
attributes and job related technically.

Indian IT industry provides a lucrative compensation package provide for entry level jobs.
Top industries such as: TCS, Wipro, Infosys, IBM, Accenture and other multinational
organizations provided competitive packages to attract and retain talented human resources.

Besides the pay packages, employees are also given certain monetary and non-monetary
benefits such as: allowances, accommodation, respective.

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Insurance Sector in INDIA
In India, Insurance sector is at the booming stage as only 40% of the population insured.

Private organizations are striving hard and hard to develop the sector.

Organization are coming up with newer insurance plans to attract the market such as:
Accidental insurance, medical insurance, medi-claims, family health insurance, dental
insurance, diabetes insurance, auto insurance, etc.

Government is also supporting the insurance sectors to increase the gross domestic product
ratio from the sector which is now about 1.4% only.

Insurance create large number of employment with higher packages in India.

From basic salary with small incentives, compensation systems have been grown to increased
salary, incentives, perks, allowances, etc.

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Data Analysis

Q1. What is the most common compensation among companies?


a) Flexible benefits
b) Insurance Scheme

INTERPRETATION:

These two are the most rated compensation in every organization which is recognizes as rated
such as:
A) Flexible benefits as 55%
B) Insurance benefits as 45%

Both are the new trends of compensation management in most recognized companies.

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Q2. Which is the most rated compensation strategy by employee?
a) Flexible benefits
b) Insurance Scheme

INTERPRETATION:

The most rated compensation among the different industries is as follow:

A) Flexible benefits that is highest rated in the industries as more than four
B) Insurance benefits that are second highest rated of compensation among the industries
as 3.8.

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Q3. What are the most common strategies of new compensation management?
a) Globalization
b) Mergers
c) Acquisitions
d) Predictive Analysis & Modelling

INTREPRETATION:

According to the new survey of compensation system in among the different industries and
found that there four most common strategies of compensation management strategies.
a) Globalization model as most effective of strategies to enhancing compensation
strategies.
b) Merger in most important and best way to development of an organization to
enhancing compensation management strategies.
c) Acquisition as work as takeover of another small company to boost their financial
growth and compensation management strategies.
d) Predictive analysis and modelling is effective to survey or analysis of current
compensation strategies among other industries in the market.

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Q4. What are the times in changes of new compensation?
a) In IT Sector from 2016
b) Insurance sector 2015

INTERPRETATION:

According to my survey on that I took few industries among all these are
1. IT industries
2. Insurance industries
3. BPO & KPO
4. Real state

But most of the affected in increasing rate in compensation management in new trend of
compensation these are IT and Insurance sector they grab the highest spot in the current
market they are working as a leading market in the current era of competitive market in india.

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Q5. What are increase rate in IT sector in compensation of employees?
a) 12-16%
b) 16-20%
c) 20-25%
d) 26-30%.

INTERPRETATION:

The increasing rate in the IT has grab highest rate in compensation among the industries. IT
has leading role in the industries and they are providing highest amount of salaries to their
employees.And increasing rate in the IT industries such as

a) 12-16%
b) 16-20%
c) 20-25%
d) 26-30%.
They provided salaries as per level of experience and education, achievement of employees.

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Q6. Which sector is most adopting of new compensation management system?
a) IT Sectors
b) Insurance Sectors
c) BPO & KPO
d) Others

INTERPRETATION:

There are several industries that are adapting to now compensation strategies to attracting and
inducing and retaining to best candidate or employees in their companies.
Such as:
a) IT Sectors
b) Insurance Sectors
c) BPO & KPO
d) Others

Others industries like: real state, aviation, hotel management and agriculture etc.

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Q7. What are top industries in Indian current market?
a) IT
b) Insurance
c) Pharmacy
d) Others

INTERPRETATION:

There are top industries in the current leading market that they provide more compensation to
their employees for motive to retain talented employees and attracting more efficient and
effective candidate to their company. And top Indian current markets are:

a) IT
b) Insurance
c) Pharmacy
d) Others

Other like: Agriculture, food science, chemical industries, small scale industries, steel
industries etc.

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Q8. What are the bases of compensation growths in market in India?
a) Experience
b) Education
c) Others

INTERPRETATION:

Companies provide more compensation to their employees on the basis of their


a) Experience
b) Education
c) Others
Others like: Skills, competencies and seniority and productivity of the company.

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Q9. What are average salaries offered by top player in Indian IT sector?
a) 1.5-2.0 LPA
b) 2.0-2.5 LPA
c) 2.5-3.0 LPA
d) More than 3 LPA

INTERPRETATION:
Now, in the current market the top industries in IT players provides huge amount o their
employees such as

a) 1.5-2.0 LPA
b) 2.0-2.5 LPA
c) 2.5-3.0 LPA
d) More than 3 LPA

And the top IT players there are-


 HP
 Oracle
 HCL
 Mind tree consulting
 Infosys
 Wipro
 TCS

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Q10. What are the average salaries offered by IT as per level of experienced?
a) 2-5 LPA to 3-5 year of experience
b) 6-12 LPA to 6-8 Year of experience
c) 12-20 LPA to 8-10 year of experience
d) More than 20 for 10 plus experience

INTERPRETATION:

In the IT sector company offered salaries to their employees according to their experience
such as:

a) 2-5 LPA to 3-5 year of experience


b) 6-12 LPA to 6-8 Year of experience
c) 12-20 LPA to 8-10 year of experience
d) More than 20 for 10 plus experience

IT sector provides salaries to their employees according above level of experience and they
prove huge amount such more than 20 lakh per annum.

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Q11. What are the top competitors in Insurance sectors?
a) HDFC
b) ICICI Prudential
c) Met Life
d) LIC
e) Birla Insurance

INTERPRETATION:

There are top competitors in Insurance sectors that they are leading in current Indian
markets. There are as follow:

a) HDFC
b) ICICI Prudential
c) Met Life
d) LIC
e) Birla Insurance

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Q12. Is employee satisfied with new trend of compensation management?
a) 80%
b) 20%

INTERPRETATION:

According to above chart shown that 80% of employees are satisfaction with their company
new trends of compensation systems and strategies.

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Q13. Is employee participating with new compensation strategies?
a) 75%
b) 25%

INTERPRATATION:

The above chart shows that 25% of employees are interested in participating in any kinds of
compensation management strategies and rest of 75% of employees are like to cooperate and
participating in the company’s management decision making.

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Q14. What are the reasons of changes in compensation strategy?
a) Employee turnover
b) Migration
c) Attracting Talents
d) Retain competent employee
e) others

INTERPRETATION:

According to recent survey in the world wide there are several reasons to make changes in
their compensation policies in their current compensation strategies. Such as:

a) Employee turnover
b) Migration
c) Attracting Talents
d) Retain competent employee
e) others

There are the basic reasons of a company that force to make changes in their compensation
strategies due to above several reasons.

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FINDINGS

There are several reasons to make changes in their compensation management systems and
compensation of an employee within the organizations.

a) Employee turnover

b) Migration

c) Attracting Talents

d) Retain competent employee

e) Others

There are the basic reasons for company to adopt new compensation management strategies
to their company.

There are top industries that provide different kinds of new compensation such as:

1. Insurance Scheme or Group medi-claim


2. Personal Accident insurance scheme
3. Company leased accommodation
4. ATM Facility
5. Corporate credit card
6. Club membership
7. Cellular phone / laptop
8. Personal health care (regular medical check-up)
9. Educational facility (for higher education)
10. Cultural program

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LIMITATION

Compensation that is either too low or unfair makes it hard to attract, retain and motivate
people. Even if it's only perceived as being low or unfair, it can cause those same problems to
occur.

The flip side however is not strong either. Yes, high base compensation can help attract and
retain, but it generally cannot motivate; and retaining unmotivated people is hardly your goal.

Similarly, poorly designed incentive schemes motivate the wrong sort of behaviour. Pump up
the incentives high enough and lenders will make irresponsible loans, sales reps will game
the system, and leaders will put a short-term boost to earnings ahead of long-term success.

Well-designed incentives programs can reinforce good behaviour that flows from sound
goals, good job design and solid management. But incentives work best playing a supporting
role in motivation rather than a lead one.

The people at the American Compensation Association recognized the limits of


compensation and wanted to expand their scope to a broader range of things that attract,
retain and motivate talent: including performance and recognition, development and career
opportunities, and work-life quality. Given the limits of compensation, that makes sense.

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RECOMMENDATION

Efficiency

 More flexible compensation tools to simplify administration and less effort to adapt to
the current rigid system.
 Clarifying how employees are compensated and linking compensation to job
performance should improve organizational performance and efficiency.
 Formal compensation analyst personnel will provide more efficient determination of
market‐based compensation

Flexibility and Responsiveness

 Linking employee pay to the marketplace will make the system more responsive to
institutional need.
 Flexible compensation tools will allow us to more accurately meet resource needs.
 A new system should be flexible enough to adjust as needs change.

Alignment

 Flexible compensation tools to support recruitment of needed staff.


 Compensation linked to employee performance to encourage employee participation
and employee development over the employee lifecycle.
 Compensation that recognizes employees based upon the marketplace for their current
competence which should also encourage staff to develop skills to advance their
compensation and at the same time benefit the organization.
 Compensation analyst infrastructure will assist in aligning compensation structure
with other universities and/or private sector as applicable for the university to remain
competitive for talent.

Consistency

 The compensation system tools should be available across for all employee
categories. The particular compensation system tools should be applied in a way that
is appropriate for the job responsibilities. In the current system, different tools are
available for different employee categories.

Transparency

 The current system is very complex. It is difficult for employees to understand how
their compensation is determined.
 Clear compensation practices tied to identifiable markets and employee performance
should improve employee understanding of how their compensation is determined.
 Clear compensation policies properly applied could leverage compensation as a tool
to help encourage employee job performance.

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CONCLUSION& SUGGETIONS

The main purpose of this dissertation is to gain some practical knowledge and apply our skills
in practical and real environment. It is time to when we have to sharpen our skills, abilities,
and knowledge which would help me in getting opportunities to explore my potentials.

In this survey of this subject we find some conclusion these are:

a) The relevant market should be identified for all positions. Further, many positions
should have compensation ranges. Subject to recommendations from the
employee categories and titling teams, those positions for which a range is needed
will not include certain groups of employees, such as faculty, researchers and
other specialized positions.
b) For positions that have compensation ranges: a) Decisions should be made and
compensation ranges should be established based on applicable market analysis.
b) These decisions will require the involvement of campus compensation analysts
familiar with applicable markets based on job category. c) Compensation analysts
are expected to consider living wage by geographic location in setting market
compensation depending on applicable employee categories. d) Pay ranges will be
evaluated at regular intervals to ensure market changes are addressed. Pay ranges
can also be evaluated outside of the regular schedule as circumstances require.
c) Compensation starting pay and adjustment guidelines should be developed with
reference to the market midpoint and should be dependent on employee categories
and titles established.
d) Comprehensive training programs and related tools will be required for all
employees to ensure performance management operates effectively, recognizing
performance measurement may vary depending on the responsibilities of a
position.
e) There will be a need for a compensation oversight committee or office.
f) Factors considered in periodic pay adjustments will include structural adjustments
(market, cost of living, equity, and living ware) as well as performance
adjustments. The weighting will depend on the responsibilities of the position.
There may be certain jobs where employees have so little discretion over how
their job is performed‐they either do the job as expected or they do not‐that there
are few opportunities to perform above and beyond job expectations. In these
cases, performance‐based compensation may not be appropriate. There may also
be cases where performance‐based compensation may more appropriately be
applied on a team basis.

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BIBLIOGRAPHY

REFERENCES:

 Human Resource Management: V.S.P Rao


 HRM: True men
 HRM: L.M Prasad

WEBSITES:

 www.citehr.com
 www.quickmba.com
 Slide share.com
 www.scribd.com
 Whatishumanresource.com
 youracticallibrary.com

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