Compensation strategies for employees in Fortune hotel (ITC Group) Significance

One of the key human resource decisions made by any organization is the design of its compensation strategy !hen choosing a compensation strategy" hospitality e#ecuti$es must make a $ariety of comple# decisions that %ill ultimately impact a company&s recruitment and retention efforts" as %ell as the attainment of organizational goals

Ob'ecti$e
( )hilosophies guides the de$elopment of compensation strategies %ithin the hotel industry * Fortune )ark +otels ,td using their compensation strategically (that is" tying compensation to organizational goals) - Types of comparisons do hotel e#ecuti$es utilize %hen de$eloping a pay structure . The benefits percei$ed to be most important by hospitality organizations Compensation )lanning The most important ob'ecti$e of any pay system is fairness or e/uity" generally e#pressed in three forms0 internal e/uity1 This ensure that more difficult 'obs are paid more 0 2#ternal e/uity1 !here 'obs are fairly compensated in comparison to similar 'obs in labor market 0 Indi$idual e/uity1 It ensures e/ual pay is ensured for e/ual %ork 2ase of operation" Comply %ith legal rules" Control costs" 3e% and desired beha$iors 2nsure e/uity" 4etain talent" 5ttract talent

Introduction
Compensation Compensation can be defined as all of the re%ards earned by employees in return for their labor This includes1

Direct financial compensation consisting of pay recei$ed in the form of %ages" salaries" bonuses and commissions pro$ided at regular and consistent inter$als Indirect financial compensation including all financial re%ards that are not included in direct compensation and can be understood to form part of the social contract bet%een the employer and employee such as benefits" lea$es" retirement plans" education" and employee ser$ices

Non-financial compensation referring to topics such as career de$elopment and ad$ancement opportunities" opportunities for recognition" as %ell as %ork en$ironment and conditions

In determining effecti$e re%ards" ho%e$er" the uni/ueness of each employee must also be considered )eople ha$e different needs or reasons for %orking The most appropriate compensation %ill meet these indi$idual needs To a large degree" ade/uate or fair compensation is in the mind of the employee Fortune Park Hotels Ltd Fortune )ark +otels ,td is a subsidiary of ITC ,td Set up in (667 to cater to the mid8 priced market segment in business and leisure destinations9 it is today a professional +otel :anagement company" %ith forty operating hotels and many more in $arious stages of completion Fortune +otels operate across a %ide spectrum and offer $arious categories such as :y Fortune" Select" )ark" Inns" 4esorts across the length and breadth of the country The Select" )ark and Inn categories are business hotels in metros and non8metros The ;:y Fortune; brand" representing a ;stylish lifestyle %ith efficient personalized ser$ice;" is the latest addition to the bou/uet of brands The Fortune chain has %on a number of a a%ards %hich include 8 The Galileo 2#press Tra$el and Tourism 5%ard for the <=est First Class +otel Chain in *>>.<" the +ospitality India 5%ard for the <=est :id :arket +otel Chain of the year *>>7< and the <=est First Class +otel Chain *>(( and also in *>>?" and Satte 5%ard for ;,eading :id8:arket chain; *>(* Compensation strategies for employees in Fortune hotel Compensation is comprised of a $ariety of things" generally including base salary" $ariable pay components" and benefits =ase salary is pay earned for a gi$en period" be it an hour" a %eek or a year" and e#cludes any additional pay" such as o$ertime or bonuses @ariable )ay components" like performance bonuses" profit sharing" or stock options" fluctuate in tandem %ith an organization&s performance and are generally used to recognize contributions to%ard company producti$ity and profitability =enefits packages can include health insurance and sa$ings plans" like pension or .>(A plans" as %ell as other perks such as a company car or tuition reimbursement Compiling and calculating the $alue of these elements to create a compelling compensation package is a challenging undertaking best reser$ed for +4 professionals %ho find actuary tables and calculus formulas fascinating =usiness o%ners and managers need not be compensation e#perts" but they should understand the $arious pay components and be a%are of the most recent trends in the area of compensation

Composition The Compensation Committee presently comprises fi$e 3on82#ecuti$e Birectors" four of %hom are Independent Birectors The Chairman of the Committee is an Independent Birector The names of the members of the Compensation Committee" including its Chairman" are pro$ided under the section ;=oard of Birectors C Committees; in the 4eport and 5ccounts Employee Stock Option Schemes The Company granted .*" ->"?>> Options during the financial year to the eligible employees of the Company and some of its subsidiary companies )ursuant to the Shareholders; appro$al on*-rd Duly" *>(> to the =onus share issue" in the ratio of ( =onus share for e$ery e#isting (Ordinary share" ad'ustment %as made to the outstanding Options %ith respect to the number of Options and the e#ercise price" in accordance %ith the 2mployee Stock Option Schemes of the Company read %ith the Securities and 2#change =oard of India (2mployee Stock Option Scheme and 2mployee Stock )urchase Scheme) Guidelines" (666" conse/uent to %hich("6*"E>".-* =onus Options %ere allocated during the year Service Contracts, Severance Fee and Notice Period The appointment of the 2#ecuti$e Birectors is go$erned by resolutions passed by the =oard and the Shareholders of the Company" %hich co$er the terms and conditions of such appointment" read %ith the ser$ice rules of the Company 5 separate Ser$ice Contract is not entered into by the Company %ith those ele$ated to the =oard from the management cadre" since they already ha$e a Ser$ice Contract %ith the Company There is no separate pro$ision for payment of se$erance fee under the resolutions go$erning the appointment of 2#ecuti$e Birectors %ho ha$e all been dra%n from amongst the management cadre The statutory pro$isions %ill ho%e$er apply In terms of the 5rticles of 5ssociation of the Company" a notice of one month is re/uired to be gi$en by a Birector seeking to $acate office and the resignation takes effect upon the e#piration of such notice or its earlier acceptance by the =oard ITC also empo%ers the employees %ith the follo%ing options like1 Gi$es them an option to s%itch di$ision if the person can perform better in some other di$ision Company also encourage cross business mo$ements for the capable employee 5 constant focus is gi$en on the career de$elopment of the employees8 the organization pro$ides opportunities for learning and gro%th" it is the indi$idual;s responsibility to ensure heFshe enhances hisFhers competencies to shoulder higher responsibilities There is no age barrier %hen it comes to gro%th

They ha$e a proper performance system in place 8 The cornerstone of the performance management system is the 5ppraisal System The indi$idual agrees to performance ob'ecti$es at the beginning of the year %ith hisFher superiors These ob'ecti$es naturally flo% from the ob'ecti$es of the unitFbusiness 5t the end of the year the indi$idual&s performance is assessed against the ob'ecti$es set The appraisal attaches as much importance to ;;ho%;; results %ere achie$ed as to the results themsel$es The rating is determined by the manager;s boss and endorsed by his boss Therefore" t%o indi$iduals are in$ol$ed in assessing a manager;s performance the appraisal process also gi$es the indi$idual an opportunity to share in a formal manner hisFher o%n career aspirations and %hat the indi$idual needs from the organization to enhance Their compensation package is $ery comprehensi$e 8 5part from the monetary component %hich comprises Consolidated Salary and Supplementary 5llo%ance" managers are pro$ided %ith /uality accommodation" medical assistance for self and family" lea$e tra$el assistance" etc 5t middle and senior le$els" managers are pro$ided %ith company maintained cars and the facility of a club membership for business purposes 5ll managers are members of ITC;s 4etirement Funds" the )ension Scheme being one of the most attracti$e in the country Other benefits include the facility of holiday homes" assistance for further educationFself

:ethodology
I %ill prefer inter$ie% and filling of /uestionnaire to ensure and encourage frank responses to the /uestions !hile framing a /uestionnaire I %ill try to list a series of /uestions" %hich can pro$ide me the needed information For study purpose I also keep in mind the respondents understanding capacity" ability to recall the information and his e#perience limits I %ill not include those /uestions" %hich can ha$e misconceptions and promote non8co8operation

SOURCE OF !"!
Source of data is classified in to t%o categories1 ( )rimary data * Secondary data

PR#$!R% !"!
)rimary data do not e#ist in records and publication The researcher has to gather primary data afresh for the specific study under taken by him :arket researchers are interested in primary data about demographicF socio economic characteristics" attitude F opinions F interests" moti$ation and beha$ior Three basic means of primary data1 ( Obser$ation

* Sur$ey - 2#periment SECON !R% !"! The data referred to those" %hich gathered for some other purpose and are already a$ailable in the firm initial records and commercial" trade or go$ernment publications are secondary data Sources of secondary data ( )ublished of secondary data * Go$ernment publication - Specialized libraries . General library research sources Sample Si&e' I used 7> respondents for my research report $E"HO OF !"! COLLEC"#ON' For getting the results of my research I used method %hich is /uestionnaire method that is under primary data 5 /uestionnaire (also kno%n as self-administered survey) is a type of statistical sur$ey handed out in paper form usually to a specific demographic to gather information in order to pro$ide better ser$ice or goods The /uestionnaire %as in$ented by Sir Francis Galton Guestionnaires ha$e ad$antages o$er some other types of sur$eys in that they are cheap" do not re/uire as much effort from the /uestioner as $erbal or telephone sur$eys" and often ha$e standardized ans%ers that make it simple to compile data +o%e$er" such standardized ans%ers may frustrate users Guestionnaires are also sharply limited by the fact that respondents must be able to read the /uestions and respond to them Thus" for some Bemographic groups conducting a sur$ey by /uestionnaire may not be practical 5 /uestionnaire consists of many types of /uestions" like direct /uestion" in direct /uestion" open8ended /uestion (free ans%er /uestion)" and close ended /uestion In this report open and close8ended /uestions are used The method %as discussed /uestioning 2ach person %as asked a set of /uestion in gi$en order and ans%er is limited to a list of alternati$e The studies are descripti$e in nature It is connected to study the present state of affair as it e#ists The open study tries to e#plore the system at present and report on it

(hy )uestionnaire methods has *een adopted ( It is $ersatile * Ideas related to the problem and its solution can be finding by asking the people in$ol$ed in $arious industries - Ano%ledge" opinions" and intention of people in$ol$ed can be easily founded . It is usually faster and cheaper than other methods It in$ol$es control o$er the data gathering acti$ities as compare to other method 2#ecuti$es %ere asked to make decisions that %ill build the compensation strategy for this company The purpose of using a fictitious e#ample is to unco$er their likely choices on compensation strategy %ithin real companies The main purpose of this research %as to pro$ide a descripti$e study for the compensation strategy choices and orientations of e#ecuti$es

=ibliography ( %%% google com * %%% hrcouncil caFhr8toolkitFcompensation8systems cfm - %%% scholar%orks umass eduFcgi . %%% itcportal com 7 %%% slideshare net ? %%% scribd comFdocFE.6(>(*-F:anagement8Control8System8at8 ITC