Compensation & Benefits PracticeMasterDVCstyle in subtitle Click to edit

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Table of Contents

Executive summary profile. to the topic plan at DVC

Company

Introduction

Compensation Review

of literature methodology

Research Findings

Limitations
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Recommendation

and suggestion

EXECUTIVE SUMMARY

Employees receive compensation from a company in return for work performed. While most people think compensation and pay are the same, the fact is that compensation is much more than just the monetary rewards provided by an employer. According to Milkovitch and Newman in Compensation, it is "all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship" The phrase "financial returns" refers to an individual's base salary, as well as short- and long-term incentives. "Tangible services and benefits" are such things as insurance, paid vacation and sick days, pension plans, and employee discounts.

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Contd
An

organization's compensation practices can have farreaching effects on its competitive advantage. As compensation expert Richard Henderson notes, "To develop a competitive advantage in a global economy, the compensation program of the organization must support totally the strategic plans and actions of the organization." Labor costs greatly affect competitive advantage because they represent a large portion of a company's operating budget. By effectively controlling these costs, a firm can achieve cost leadership.

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INTRODUCTION TO THE ORGANIZATION

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Contd

The Damodar Valley Corporation, popularly known as DVC, is the first multipurpose river valley project of independent India. The corporation came into being on July 7, 1948 by an act of the constituent assembly of India (act no.XIV). It is modeled on the Tennessee valley authority of USA. Jawaharlal Nehru, prime minister of India, Dr. B.C.Roy, chief minister of west Bengal and Sri Krishna Sinha, chief minister of Bihar, took personal interest to ensure early success of the project.

The Corporation has its Head Office atKolkata (previously Calcutta), has a full time Chairman and two part-time members, generally the 6/8/12

Contd

DVC has three Hydro-electric power station at Tiliya, Maithon and Panchet, with total installed capacity of 144 MW. The one at Maithon was Indias first underground Hydro-electric power station. DVC operates thermal power stations at Bokaro, Chandrapura, Durgapur and Mejia, with total capacity of 2745 MW. The power station at Bokaro was biggest in the country when it was built in the 50s .DVC is expanding its thermal power capacity and with the completion of its presents plan by 2012 it would be generating more than 11000 MW of power.

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Contd
MISSION The Mission of DVC is defined by the following objectives:

Flood control and irrigation. Generation, transmission and distribution of power. Eco-conservation and afforestation. Socio-economic welfare of the in habitants of Damodar Valley. Water supply of industrial and domestic use. VISION

To establish as a mega pithead power producer and distributor in the eastern Region and become a facilitator for all around growth of the region enriching the quality of lives of people. 6/8/12

LANDMARKS ACHIEVED
is the first multipurpose river valley project taken up by the Govt. of India. DVC, only the Government of India (GOI) organization generating power through three sources - coal, water and liquid fuel. 6/8/12
DVC

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DVC INFRASTRUCTURE AT A GLANCE

DVC Command Area 24,235 Sq. Km POWER MANAGEMENT Total Installed Capacity Thermal Power Stations Hydel Power Stations Gas Turbine Station Sub-stations and Receiving Stations 2796.5 MW Five Capacity 2570 MW Three Capacity 144 MW One Capacity 82.5 MW At 220 KV 11 nos. At 132 KV 33 nos. At 33 KV 16 nos. 220 KV 1500 ckt km 132 KV 3415 ckt km 33 KV 1070 ckt km

Transmission Lines

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DVC POWER PLANTS AT A GLANCE

Name Location Existing Capacity HYDEL
Tilaiya River- Barakar Dist.-Hazaribagh State- Jharkhand River- Barakar Dist.- Burdhaman State- West Bengal River- Damodar Dist.- Dhanbad State -Jharkhand . 4 MW (2X2 MW) U-I Feb 53 U-II July 53

Commissioning

Maithon

60 MW (3X20 MW)

U-I Oct 57 U-II Mar 58 U-II Dec 58 U-I Dec 59 U-II Mar 91

Panchet

80 MW (2X40 MW)

Total Hydel

144 MW

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Name

Location THERMAL

Capacity

Commissioning

Bokaro 'B'

Dist- Bokaro State- Jharkhand Dist- Bokaro State- Jharkhand Dist.- Barddhaman State- West Bengal Dist.- Bankura State- West Bengal

630 MW (3X210 MW) 390 MW (3X130 MW) 350 MW (1X140 MW) + (1X210 MW) 1090 MW (4X210 MW) + (1X250 MW) 2460 MW 2604 MW

Chandrapura

Durgapur

U-I Mar 86 U-II Nov 90 U-III Aug 93 U-I Oct 64 U-II May 65 U-III July 68 U-III Dec 66 U-IV Sept 82

Mejia

U-I Mar 96 U-II Mar 98 U-III Sept 99 U-IV Feb 05 U-V Feb 08

Total Thermal GRAND TOTAL

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INTRODUCTION TO THE TOPIC

"If you pick the right people and give them the opportunity to spread their wings - and put Compensation and rewards as a carrier behind it you almost don't have to manage them."

-Jack Welch COMPENSATION (Definition)

According to Robbins management is a process of

Compensation 6/8/12

Compensation may be used to:

Recruit and retain qualified employees. Increase or maintain morale/satisfaction. Reward and encourage peak performance. Achieve internal and external equity. Reduce turnover and encourage company loyalty. Modify (through negotiations) practices through unions.

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EVOLUTION OF COMPENSATION

Todays compensation systems have come from a long way. With the changing organizational structures workers' need and compensation systems have also been changing. From the bureaucratic organizations to the participative organizations, employees have started asking for their rights and appropriate compensations. In traditional compensation system it was assumed that humans work only for money, there was no space for other psychological and social needs of workers.

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Today modern the compensation systems are designed aligned to the business goals and strategies. The employees are expected to work and take their own decisions. Authority is being delegated. Employees feel secured and valued in the organization. Organizations offer monetary and non-monetary benefits to attract and retain the best talents in the competitive environment. Some of the benefits are special allowances like mobile, companys vehicle; House rent allowances; statutory leaves, etc.

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Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc.

Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered 6/8/12

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Direct Compensation

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Indirect Compensation

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NEED OF COMPENSATION MANAGEMENT

A good compensation package is important to motivate the employees to increase the organizational productivity. compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.

Unless

is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the 6/8/12

Salary

COMPENSATION PLAN AT DVC

DVC has been regulating by the central government from the beginning, when Damodar valley corporation act passed in 1948 for the development of Damodar valley in province of Bihar and Bengal. All rules and regulation regarding pay structures, compensation and benefits is governed by central government of India. Although central government is responsible for this corporation, but DVC has status and format like a company. Services classified under DVC are categorized into four categories.

Group A:under this group according to 6th 6/8/12 pay revision salary of employees are starting from

Group B: This category employees are called supervisory cadre. Their pay scales is starting from Rs. 5200 and ranging up to Rs.39100/-. Group C:- This category employees are called skilled lab our. They are physically working group. Their pay scales are starting from Rs.5200/- and ranging up to Rs. 20200/-. Group D- This employee are called unskilled lab our .their pay scales ranges from Rs.5200/- up to 20200.this group created in 1996.

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SI.No

1.BASIC PAY For group A employees

Post/grade as per DVC prerevised scales Existing DVC Scale Name of pay band/scale

Scales as revised w.e.f 1.1.06 Corresponding corresponding pay Grade pay bands/scales

(1) 1 2 3 4 5 6 7 8 9 Group -A

(2) 1 2 3 4 5 6 7 8 9

(3) (4) 8000-13500 PB - 3 8000-14050 PB - 3 1000015200 1200016500 1430018300 1505020000 1640020900 1840022400 1840022400(+150 PB - 3 PB - 3 PB - 4 PB - 4 PB - 4 PB - 4 PB - 4

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(5) 1560039100 1560039100 1560039100 1560039100 3740067000 3740067000 3740067000 3740067000 3740067000

(6) 5400 5650 6600 7600 8700 8800

8900 10000 10150

SI.No

Basic pay for group B, C, and D employees

Post/grade as per DVC pre-revised scales Existing DVC Scale Name of pay band/scale

Scales as revised w.e.f 1.1.06 Corresponding pay corresponding bands/scales Grade pay

(1) 1 2 3 4 5

(2) (i)

(3) 2550-3200 2610-3540 2650-4000 2750-4400 2820-4475

(4) PB - 1 PB - 1 PB - 1 PB - 1 PB - 1

(5) (6) 5200-20200 1800 5200-20200 1800 5200-20200 1800 5200-20200 1800 5200-20200 1800

Group D

(ii) (iii)

Group-C

A B

6 7 8 9 10 11 6/8/12

Group-B

C D E F G H

2890-4550 3050-4590 3200-4900 4100-6400 4250-6550 4750-7900

PB - 1 PB - 1 PB - 1 PB - 1 PB - 1 PB - 1

5200-20200 1850 5200-20200 1900 5200-20200 2000 5200-20200 2650 5200-20200 2650 5200-20200 3200

2. GRADE PAY
For Group A employees Pay Bands are

PB-3(Rs.15600-39100) PB-4 (Rs.37400-67000)

For group B, C, and D employees

PB-2 (Rs.9300-34800) PB-1 (Rs.5200-20200)

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3. House Rent Allowance

30% will be payable to the employee on BP+GP+NPA in respect of the employees posted at Kolkata , Howrah, Delhi & 20% will be payable in respect of the employees posted at Ranchi and Jamshedpur as per GOI order. In respect of field employees HRA will be continued to be paid @ 10% to 5% as the case may but without any ceiling limit.

4. Dearness Allowance
D.A. is calculated as a percent of the basic salary. At present 22%, according to GOI is calculated on basic pay. 6/8/12

5. City Compensatory Allowance (CCA)

Allowance that is given for To and for Journey from living premises to officers premises. Now this has been merged with transport allowances with effect from 01.04.2009.

6. Non Practicing Allowances (NPA)

This allowance is given to doctors only. This is 25% (Basic Pay+ Grade pay) and it is given on condition that their total amount does not exceed 85000(Basic Pay +Grade Pay +NPA). The NPA at 6/8/12 new rate has been effective from 01.01.2009 the

8. Night Duty Allowances

Grade Pay Range
Rs.1800/- and 1850/Rs.1900/- and 2000/Rs.2650/Rs.3200 and 4200/Rs.4300/-,4400/-,5400/-

Rate (Rs.) per night shift

100/125/160/200/240/-

9. Hazard Allowance
Hazard Allowance @Rs.10/-per day of active duty per employee is been given for working in the notified area of Hazards.
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10. Conveyance Allowances

This

allowance is given for two wheeler and four wheeler journey. Corporation compensates the expenditure for daily journey from living establishment to office establishment. This allowance has been merged with transport allowance effective from 01.01.09.

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11. Energy Allowances (EC)

EA is payable in accordance with the following Grade Pay range to the extended cost to units shown here under and chargeable by the service provide to the employee.
Grade-Pay Range For Rs.1800/- and Rs.1850/For Rs.1900/-, Rs 2000/-, Rs.2650/-,Rs.3200/-,Rs.4200/-,R s.4300/- & Rs.4400/- & Rs.5400/Electricity units 100/150/-

DVC employees, residing in DVC colony Quarter, will receive free electricity as per the above range. Any additional consumption is been charged at usual rate of the corporation.

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REVIEW OF LITERATURE
Article:-Devising

a Good Compensation Plan

A comprehensive compensation plan must

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Research Methodology
Objective of the Study:
To

check the level of satisfaction level of the employees with the compensation plan in DVC. identify and correctly describe the compensation structure of the organization. study existing compensation system in DVC. examine why compensation system is important.

To To To

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Research Method for Data collection:

The sample data will be collected through the questionnaire.

Primary Data: for research primary data will be collected through questionnaire.

Data: secondary sources of information will be taken from 6/8/12 companys magazine, books and
Secondary

Data Collection, Analysis and Interpretation

Primary data is collected from the permanent employees of DVC through questionnaire and secondary data is collected through informal & formal talk, observation and study of compensation policy at DVC.

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Questionnaire
1.

Does the pay practice help your company to have employees who are satisfied with their jobs?

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Interpretation: - Employees of the company believes that the compensation is very

important for selection and retention of the high performing employees.

Questionnaire
2.

Does the pay practice help the company to high performing employees?

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Questionnaire
3.

Does the pay practice make a positive contribution to the overall effectiveness of the organization?

Interpretation: The employees who are 6/8/12

Questionnaire
4.

Does base salary increases typically determined for the managerial and professional employees?

Interpretation: The determination of the base salary for the high level professionals is unknown by
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Questionnaire
5.

Does the pay incentives and such as bonus or profit sharing is an important part of the compensation strategy in this organization?

6/8/12 Interpretation: Strategies like profit sharing has

Questionnaire
6.

Does the benefits are an important part of the total pay packages?

Interpretation: The benefits provided by the DVC are considered very important by the employees for the effectiveness and the loyalty employees shows. 6/8/12

Questionnaire
7.

In this organization a portion of an employees earning is contingent o group or organization performance goals being achieved?

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Interpretation: A large percentage of the employees say that the seniority very much affects the pay determination.

Questionnaire
8.

Does the employees seniority enter into pay decisions?

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Questionnaire
9.

Does the employee benefits package is very generous compared to what it could be?

Interpretation: Employees benefits are very

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Questionnaire
10.

Do the pay policies recognize that long term results are more important than short term results?

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OVERALL COMPARISION OF DATA

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FINDINGS
The

respondents are fairly satisfied by the compensation plans prevailing in their organization but do not go to the extreme against the management for giving their own opinions which could give more realistic view of the shortcomings in the policy. Most of the employees of the

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LIMITATIONS
Employees

the report to be used for some other purpose so they do not give accurate opinion. time allotted for the data collection was very short. internet information could be irrelevant. respondent were limited so

The The

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The

RECOMMMENDATIONS AND SUGESTIONS

The

effectiveness can be measured by comparing the compensation in the two companies one could be of the private sector and other of public sector.

affecting the compensation policy could be taken separately to compare the effect of these factors 6/8/12 the policy. on
Factors

CONCLUSION
The

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increasing competitiveness of the labor market and turnover of employees had resulted in nightmare in compensation planning. Apart from this, the growing demands of the employees and competitive salaries offered by multinational companies had almost resulted in a compensation war in certain industries.