Professional Documents
Culture Documents
What is Compensation ?
Compensation is the process of directly and indirectly
rewarding employees on a current or deferred basis,
for their performance of assigned tasks.
Objectives of Compensation
Legal Compliance with all appropriate laws and
regulations
Cost effectiveness for the organization
Internal, External and Individual equity for employees
Performance enhancement for the organization
Compensation Types
DIRECT
Base Pay
INDIRECT
Benefits
Wages
Medical Insurance
Salaries
Variable Pay
Bonuses
Incentives
Stock Options
Copyright 2004 Asia Cryo-Cell Private limited.
In technological collaboration with Cryo-Cell International, Florida, USA.
Workers Compensation
Line Manager
and
Administers
Compensation system
Conducts job evaluation
and wage surveys
Develops wage / salary
structures and policies
Attempt
to
march
pay
rates
employee
based
compensation purposes
Copyright 2004 Asia Cryo-Cell Private limited.
In technological collaboration with Cryo-Cell International, Florida, USA.
COMPENSATION STRATEGIES
Compensation Philosophies
Strategic Compensation Design
Compensation and Organizational Culture
Cost Effectiveness and Labour Market Positioning
Compensation Philosophy
ENTITLEMENT
PERFORMANCE
Seniority Based
Today
Fixed salary
Tomorrow
Variable
pay
common
throughout the organization
Fixed
benefits,
reward long tenure
Flexible benefits
Portable benefits
Company-based
career moving up
Industry-based career,
moving around
Skill-based,
employment
interim
Hierarchical
organizations
Flatter
team-based
organizations
Network
organizations
virtual
Total
compensation
(Look at benefits, too)
Bonuses/perks
executives only
for
more
Quartile Strategy
Third Quartile
Above-Market Strategy
Maximum
Second Quartile
Middle-Market Strategy
Medium
First Quartile
Below-Market Strategy
Minimum
Organization-Related
Outcomes
Employee-Related
Outcomes
Enhanced employee
understanding of Organisational
big picture
Increased effectiveness of
work Team
Job Evaluation
Pay Surveys
Pay Policies
Pay Structures
Performance
Appraisal
Individual Pay
Implementation,
Communication, Monitoring
Salary Structure
Job Evaluation Results
Identify Different
Pay Structures
Establish Pay Grades
Compute Pay
Ranges