EMPLOYEE RENUMERATION

ARWA DALAL GAURI BULBULE MANASVI PAREKH RASIKA NATU

3Ws of Remuneration
It is the compensation received by an employee in return for his or her contribution to organization

What
Employer, significant issues as to decide the contribution to the cost of production Whom it is concerned Employee, motivation, loyalty and productivity

Why

Many strikes are fought between on wage related issues

Component of Remuneration
Remuneration

Financial

Non-Financial

Hourly & Monthly rated a).Wages b).Salary

Incentives

Fringe Benefits

Perquisites

Job Context

FACTORS INFLUENCING EMPLOYEE REMUNERATION

1. External Factor 2. Internal Factor

EXTERNAL FACTOR
Labor market :Demand for and supply of labor influence wage and salary fixation

CONT..
Cost of living: This criteria matters during periods of rising prices. Labour Union: Presence/absence of labour organization determine the wages Labour laws Society: Prices fixed by an organization for its goods and services. The economy

INTERNAL FACTOR
Business Strategy

Job evaluation and performance appraisal

The employee

1. 2. 3. 4.

Reinforcement Theory Expectancy theory Equity Theory Agency Theory

REMUNERATION THEORY

REINFORCEMENT THEORY (Skinner, 1953)

Reinforcement theory is the process of shaping behavior by controlling the consequences of the behaviour. In reinforcement theory a combination of rewards and/or punishments is used to reinforce desired behaviour or extinguish unwanted behaviour.

Expectancy Theory
Expectancy theory can be understood by examining the relationship between the attitudes of the employees, their perception regarding the feasibility of achieving the targets and the rewards they hope to receive as a consequence of elevated performance.

EQUITY THEORY (Adams, 1963)

Equity theory is based on the premises of the belief in fair treatment by the organization in terms of equally rewarding all employees doing equal amount and equal level of work.

AGENCY THEORY (Fama, 1980)

It states that the principal (employer) should choose a contracting scheme that helps align interest of agent (employee) with principals own interest.

DEVISING A REMUNERATION PLAN

JOB DESCRIPTION JOB EVALUATION JOB HIERARCHY PAY SURVEY PRICING JOBS

s OF REMUNERATION
skilledbased pay
Pay review
RENUMERATION

Monetary versus nonmonetary rewards

Employee participati on Comparable worth

Pay secrecy