Index of Compensation Management

SCDL
Serial content Page no.
1.2 Concept of compensation management 2
1.3 Essentials of an equitable and ideal compensation and reward
1 system 3
Demand and supply position 3
Nature of business 3
Size of business 3
Government rules 3
Current state of industry 4
Management thinking 4
1.4 Disagreeability of the job 4
1.5 Characteristics of good compensation system 6
1.6 Role of compensation and reward in an organisation 6
1.7 Advantages of a fair compensation system 7
1.8 Need for the designing of compensation policy 8
1.9 Importance of compensation reward system in a business 9
1.10 organisation 10
1.11 Concept of cost 12
1 Various cost concepts elements of cost 13
Cost sheet orientation and understanding of problems 13
Standard Costing 14
1.12 Marginal costing 14
Budgetary control 16
Cost associated with personnel functions 16
1.13 Direct labour cost 17
Indirect labour Cost 19
Concept of cost to the company organisation 19
The personnel department 19
Time recording department 20
Payroll department 20
Engineering department 20
Cost accounting department 21
Employee turnover 22
Nature of employee turnover 22
Cost involved in labour turnover 23
Replacement costs 24
Preventive costs 24
Causes of labour turnover 25
Avoidable causes 25
Unavoidable causes 26
Effects of employee turnover 26
Measurement of employee turnover 27
Separation method rate 27
Replacement method rate 27
Flux method rate 27
Employee turnover and stability index 28
Skill dilution index 29
Skill wastage index
Employees cost to the company
Unit2
35
Control system for labour cost 35
2.3 Direct and indirect labour 37
2.4 Labour cost control techniques 37
Role of various departments 38
The personnel department 39
Employee’s History card 40
Timekeeping and methods 41
Attendance time recording methods 41
Hand written register 42
Disc Method 44
Time recording clock 46
 Time booking 46
Time booking objectives 47
Time booking methods 48
Daily time sheet 49
2.5 Weekly time sheet 50
Job cards 51
Industrial engineering department 51
Work study 52
Ppc 52
Method study 52
Motion study 53
Time study 53
2.6 Procedures for time study 55
Time computation 55
Types of workers 55
Piece workers 56
2.7 Casual workers 57
Out workers 58
Payroll department 58
Preparation of payroll wage sheet 58
Computation of earnings 58
Components of gross earning 59
Components of deduction 59
2.8 Net earning 61
2.9 Disbursement and internal checks 61
Wage analysis 62
Cost accounting treatment of wages components 63
Overtime 64
Unit 3 Idle time analysis
3.2 Fringe benefit 68
3.3 Compensation systems their merits and demerits 70
Compensation reward management process 70
Components of remuneration 70
Wages and salary 70
Incentives 70
Fringe benefits 70
Perquisites 71
Non monetary benefits 71
3.4 Employee reward 72
Performance related pay 73
Reward system 73
Profit sharing 74
Job evaluation 74
Merit rating 74
Types of rewards 74
Extrinsic rewards 74
Intrinsic rewards 75
Pay as an extrinsic reward 75
Pay as a source of motivation 76
Creative pay practice 76
Skill based pay 76
Gain sharing plans 76
Profit sharing plans 76
Employee stock ownership plans 76
Lump sum pay increases 77
Flexible benefits plans 77
You get what you reward 78
Advantages of fair compensation system 79
Aspects of reward management 79
Time rate 79
Piece rate plan 79
Combination plan 79
Wages and salaries 79
Commissions 79
Draws 80
Bonuses 80
Capital sharing payments 80
Other taxable form of compensation 81
Balance or debt method 81
Various compensation systems and their merits and demerits 81
Time rate system 82
At ordinary level 83
High wage level high time rate 83
Graduated time rates 88
Piece rate payment by result system 89
Taylor differential piece rate system 90
Merrick’s
Gantt task plan

Wages and salary administration 98

99
Nature and purpose of wage and salary administration 99
Wage level 100
Wage structure 100
Wage determination process 101
Process of job analysis 101
Wage surveys 102
Analysis of relevant organisational problems 102
Preparation of wage structure 105
Plotting jobs on a curve 105
Wage administration rules 106
Factors influencing wage, salary structure and administration 107
Organisation’s ability to pay 107
Supply and demand of labour 108
Prevailing market rate 108
The cost of living 108
The living wage 108
Productivity 109
Trade union’s bargaining power 109
Job requirements 109
Managerial attitudes 110
Psychological and social factors 110
Administration of wages and salaries 112
Principle of wage and salary administration 113
Components of wages 113
Theory of wages 113
Subsistence theory 113
Wage fund theory 114
The surplus value theory of wages 114
Residual claimant theory 114
The bargaining theory of wages 115
Behavioural theories 118
Minimum, fair and living wage 118
Elements or ingredients of good wage plan 119
Wage differentials 120
Occupational differentials 120
Inter firm differentials 121
Inter area of regional differentials 121
Inter industry differentials 121
Personnel wage differentials 122
Importance of wage differentials 123
Wage differentials in India 125
Executive compensation plans
Job cluster

Legal frame work for wage and salary administration 138

139
Wage Boards
Collective bargaining 147
Compensation structures 147
Elements of management compensation 147
Salary basic salary or consolidated salary 147
Gradewise flat allowances 148
Reimbursements of expenses 148
Annual payments 148
Benefits 148
Employee stock option schemes 148
Total cost to the company 148
Retiral benefits 148
Performance based increase 149
Performance bonus 149
Grade oriented compensation system 149
Compensation review periods 152
Retention strategies 152
Types of compensation system 155
Role of compensation and reward in modern organisation 155
Salary compensation surveys 155
Ceo 155
Senior manager 155
Middle manager 155
Junior manager 156
Management trainees 157
Job evaluation internal and external equity 160
Objectives of job evaluation 160
Job analysis
Remuneration

Comparisons compensation surveys service hospitality

and telecom software industries 164
166
Issues related to compensation in service hospitality industry 166
Duration of pay revision 166
Labour turn out 167
Compensation surveys dot com companies 167
The business concept 173
Four phases of dotcom movement of pay 173
Company rank by perks and benefits 178
Insurance and reimbursements 181
Emerging trends 182
Esop 184
Benchmarking with the best in the compensation and the benefit 185
policies 186
Manufacturing se 186
Pharmaceutical 186
Financial
Bpo
Telecom

190
Comparisons compensation surveys manufacturing 191
engineering industry 191
192
Aspects of wage surveys 193
Analysis of relevant organisational problems 195
Preparation of wage structure 195
Broad groups 196
Wage administration rules 196
The organisation ability to pay 196
Supply and demand of labour 196
Prevailing market rate 197
The cost of living 197
The living wage 197
Productivity 197
Trade union 198
Job requirement 199
Managerial attitudes 200
Psychological and social factors
Compensation and benefits in perspectives 202
A tool to attract talent 209
Compensation and benefits as a tool to drive performance and
build work force capability
Role of compensation and benefits in arresting attrition
Compensation structure today
214
Pay structure today and tomorrow 215
215
218
Compensation structure 218
Types of compensation 221
Role of compensation and reward in modern organisations 221
Tax planning and payroll components 222
Perquisites 222
Budget save income tax 223
New Tax brackets and rates
Budget hold for retail investors 225
Pay structure today and tomorrow 225
New trends in compensation expectation of the executive cadre 225
rational pay structure 226
Gardener wages 226
Recreational facilities
Refreshment
Transport facilities
Telephone bill 230
231
Incentives reward system and pay restructuring 234
235
Meaning of incentives 235
Determinants of incentives 236
Perceived personnel cost obtained monetary rewards 238
Wage incentives 238
Objectives of wage incentives schemes 241
Merits of wage 243
Types of wage incentive plans 243
Short term plan 244
Halsey premium plan 244
Halsy weir 245
Rowan 246
The 100 per cent 246
Bedeaux point plan 247
Taylor 247
Merric 248
Gnat task and bonus plan 248
Emerson efficiency plan 249
Co partnership system 254
Accelerating premium system 256
Long term wage 257
Profit sharing 259
Scanlon plan 259
Jee effects 260
Prerequisites 260
White collar 260
Salesman 260
Straight salary method 260
Strait commission basis 261
Combination methods of salaries 261
Salary plus pension 261
Incentives for management employees 261
Failure of incentive plan 261
The principal of failure are 261
Unfair standards 261
Fear of rate cut 262
Group restrictions 262
Employee do not understand the plans 264
Lack of required tools training equipments etc 266
Time or output basis incentive plans
Guidelines for effective incentive plans
Non monetary incentives
The problem of equity 270
 271
Process and steps for preparation of payroll 271
271
Wage and salary determination 272
Process of job analysis 272
Possible deduction 272
Statuary deduction 272
Provident fund 272
Professional tax 272
Income tax 272
Labour welfare fund 272
Esi contribution 273
Other deduction 273
Salary advance 273
Festival advance 273
Housing loan 273
Insurance premium 274
Company loan 274
Deduction due to absence from duty 274
Canteen recovery 274
Transportation charges bus fare 275
Fine 275
Any loss sustained 276
Possible inputs to the payroll process 277
New employee input 277
Promotion increment revision 277
Pay slips 277
Earning and deduction statement 277
Recovery statement 278
Journal entry 278
Tax deductible statement 279
Annual report 279
Summary of salaries 280
Preparation of payroll wage sheet 280
Components of gross earning 281
Components of deduction 284
Net earning
Disbursement and internal checks
Wage analysis
Wage levels 288
288
Tax planning and payroll components 290
291
Income from salaries 291
Section 292
Perquisites 293
Taxable in all cases 293
Taxable under specific cases 293
Non taxable prerequisite 293
Recreational facilities 293
Gardener wages 293
Refreshment 293
Transport facility 294
Telephone bill 294
Refresher course 297
Perquisites 297
Value of perquisites 298
Accommodation 298
Free education 298
Motor car 299
Gas light and water 299
Valuation of free transport 299
Domestic servants 300
In lieu of salary 301
House rent 301
Provident fund 301
Approved superannuation fund 301
Deduction from salary 302
Standard deduction 305
Entertainment allowance
Tax on employment
Provident fund
Entertainment expenditure 310
310
Emerging issues and trends 314
314
An individual lifestyle 315
Marriage and family values 315
Consumerism 315
Society 315
Domination of machines 315
Mass production 315
Exploitation of workers 315
No identification with the work 315
Poor working conditions 316
Environment pollution 316
Trends towards urbanisation 316
Pressure on existing institutions 316
Scientific advancement 316
Material prosperity 317
Colonialism 317
Pricing trends of construction infrastructure industry 317
Food habit flexible work timings partying and alcoholism 317
Development of rational outlook 318
Development of materialistic outlook 318
Individualism 319
Permissiveness in sexual morals 322
Increase in crimes 324
Loosening of social control 325
New trends in executive managerial compensation 326
Issues of non recovery bad debts runaways 327
The new environment
Business process re engineering
Minimising downsizing pains
Bpo 334
334
Constitutional and international labour standards and 336
norms 337
338
Vv giri 338
International labour organisation 339
Different living standards
The correlation
Geographical differences
Same job v/s same pay
Managing the pay roll