Compensation Management is an integral part of the management of the

organization. Compensation is a systematic approach to providing monetary

value to employees in exchange for work performed. Compensation may achieve

several purposes assisting in recruitment, job performance, and job satisfaction.

To be effective, the managers must appreciate the value of competitive pay, their

human resources, and have an investment view of payroll costs. It is of prime

importance for an organization to maintain pay levels that attract and retain

quality employees while recognizing the need to manage payroll costs.

The literal meaning of compensation is to counter-balance. In the case of human resource management, compensation is referred to as

money and other

Benefits received by an employee for providing services to his employer. Money and benefits received may be in different forms-base

compensation in money and various benefits, which may be associated with employee's service to the employer like provident fund,

gratuity, insurance scheme and any other payment which the employee receives or benefits he enjoys in lieu of such payment.

"Compensation includes direct cash payments, indirect payments in the form of employee benefits and incentives to motivate employees to strive for higher levels of productivity”

Compensation is a tool used by management for a variety of purposes to further the existence and growth of the company.

IMPORTANCE OF COMPENSATION

Compensation and Reward system plays vital role in a business organization. Since, among four Ms, i.e. Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Every factor contributes to the process of production/business. It expects return from the business process such as rent is the return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour expects wages from the process.

Labour plays vital role in bringing about the process of production/business in motion. The other factors being human, has expectations, emotions, ambitions and egos.

Labour therefore expects to have fair share in the business/production process. Therefore a fair compensation system is a must for every business organization. The fair compensation system will help in the following:

o An ideal compensation system will have positive impact on the efficiency and results produced by employees. It will encourage the employees to perform better and achieve the standards fixed.

o It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation and the set standards would be more realistic and achievable.

o Such a system should be well defined and uniform. It will be apply to all the levels of the organization as a general system.

o The system should be simple and flexible so that every employee would be able to compute his own compensation receivable.

o It should be easy to implement, should not result in exploitation of workers.

o It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would provide satisfaction to the workers.

o Such system would help management in complying with the various labor acts.

o Such system should also solve disputes between the employee union and management.

o The system should follow the management principle of equal pay.

o It should motivate and encouragement those who perform better and should provide opportunities for those who wish to excel.

o Sound Compensation/Reward System brings peace in the relationship of employer and employees.

o It aims at creating a healthy competition among them and encourages employees to work hard and efficiently.

o The system provides growth and advancement opportunities to the deserving employees.

o The perfect compensation system provides platform for happy and satisfied workforce. This minimizes the labour turnover. The organization enjoys the stability.

o The organization is able to retain the best talent by providing them adequate compensation thereby stopping them from switching over to another job.

o The business organization can think of expansion and growth if it has the support of skillful, talented and happy workforce.

o The sound compensation system is hallmark of organization’s success and prosperity. The success and stability of organization is measured with pay-package it provides to its employees.

Evolution Of Compensation

Today’s 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. The higher education standards and higher skills required for the jobs have made the organizations provide competitive compensations to their employees.

Compensation strategy is derived from the business strategy. The business goals and objectives are aligned with the HR strategies. Then the compensation committee or the concerned authority formulates the compensation strategy. It depends on both internal and external factors as well as the life cycle of an organization.

Traditional Compensation Systems

In the traditional organizational structures, employees were expected to work hard and obey the bosses’ orders. In return they were provided with job security, salary increments and promotions annually. The salary was determined on the basis of the job work and the years of experience the employee is holding. Some of the organizations provided for retirement benefits such as, pension plans, for the employees. It was assumed that humans work for money, there was no space for other psychological and social needs of workers.

Change in Compensation Systems

With the behavioral science theories and evolution of labour and trade unions, employees started asking for their rights. Maslow brought in the need hierarchy for the rights of the employees. He stated that employees do not work only for money but there are other needs too which they want to satisfy from there job, i.e. social needs, psychological needs, safety needs, self-actualization, etc. Now the employees were being treated as human resource.

Their performance was being measured and appraised based on the organizational and individual performance. Competition among employees existed. Employees were expected to work hard to have the job security. The compensation system was designed on the basis of job work and related proficiency of the employee.

Maslow’s Need Hierarchy

Today’s Modern Compensation Systems

Today 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, company’s vehicle; House rent allowances; statutory leaves, etc.

Objectives of Compensation management are:

1.Attracting and Retaining Personnel: From organization’s point of view, the compensation management aims at attracting and retaining right personnel in the Organization Not only they require persons who are well qualified but they are also retained in the organization. There is no dirth of personnel at operative levels but the problems come at the managerial and technical levelsParticularly for growing companies. Not only have they required persons who are well qualified but they are also retained in the organization. In the present day context, managerial turnover is a big problem particularly in high knowledgebase Organizations.

2. Motivating Personnel: Compensation management aims at motivating personnel for higher productivity. Monetary compensation has its own limitations in motivating people for superior performance.

3. Optimizing Cost of Compensation: Compensation management aims at optimizing cost of compensation by establishing some kind of linkage with performance and compensation.

4. Consistency in Compensation: Compensation management tries to achieve consistency-both internal and external-in compensating employees. Internal consistency involves payment on the basis of criticality of jobs and employees' performance on jobs.

SCOPE OF COMPENSATION MANAGEMENT

Compensation management helps to determine the relative worth of a job in an organization in a systematic, consistent and accurate manner. It also helps in estimating the basic pay for each job in accordance with the importance of the job in the organizational hierarchy .once a basic pay is determined , the rewards , incentives and benefits attached worth the pay, positions and performance are also

COMPENSATION PACKAGE

MOTIVATION

NEED SATISFACTION

EMPLOYEE RETENTION

determined . The basic wage, incentives and rewards and benefits, together form the compensation package of an employee.

Components of Compensation System

Compensation systems are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities. Components of a compensation system are as follows:

Job AnalysisJob analysis is a systematic approach to defining the job role, description, requirements, responsibilities, evaluation, etc. It helps in finding out required level of education, skills, knowledge, training, etc for the job position. It also depicts the job worth i.e. measurable effectiveness of the job and contribution of job to the organization. Thus, it effectively contributes to setting up the compensation package for the job position.

Importance of Job AnalysisJob analysis helps in analyzing the resources and establishing the strategies to accomplish the business

goals and strategic objectives. It forms the basis for demand-supply analysis, recruitments, compensation management, and training need assessment and performance appraisal.

Components of Job Analysis

Job analysis is a systematic procedure to analyze the requirements for the job role and job profile. Job analysis can be further categorized into following sub components.

Job PositionJob position refers to the designation of the job and employee in the organization. Job position forms an important part of the compensation strategy as it determines the level of the job in the organization. For example management level employees receive greater pay scale than non-managerial employees. The non-monetary benefits offered to two different levels in the organization also vary.

Job Description

Job description refers the requirements an organization looks for a particular job position. It states the key skill requirements, the level of experience needed, level of education required, etc. It also describes the roles and responsibilities attached with the job position. The roles and responsibilities are key determinant factor in estimating the level of experience, education, skill, etc required for the job. It also helps in benchmarking the performance standards.

Job Worth

Job Worth refers to estimating the job worthiness i.e. how much the job contributes to the organization. It is also known as job evaluation. Job description is used to analyze the job worthiness. It is also known as job evaluation. Roles and responsibilities helps in determining the outcome from the job profile. Once it is determined that how much the job is worth, it becomes easy to define the compensation strategy for the position.

Therefore, job analysis forms an integral part in the formulation of compensation strategy of an organization. Organizations should conduct the job analysis in a systematic at regular intervals. Job analysis can be used for setting up the compensation packages, for reviewing employees’ performance with the standard level of performance, determining the training needs for employees who are lacking certain skills.

Pay-StructuresOnce job analysis has been done organizations need to decide upon the pay structures. Pay structure refers to the process of setting up the pay for a job in an organization. The process deals with internal and external analysis to estimate the compensation package for a job profile. Internal equity, External equity and Individual equity are the most popular pay structures. Job description provides the in depth knowledge about the job profile and its worth.

Pay structures are the strong determinant of employee’s value in the organization. It helps in analyzing the employee’s role and status in the organization. It provides for fair treatment to all employees. Pay structures also include the estimation of incentives.

Internal Equity

The internal equity method undertakes the job position in the organizational hierarchy. The process aims at balancing the compensation provided to a job profile in comparison to the compensation provided to its senior and junior level in the hierarchy. The fairness is ensured using job ranking, job classification, level of management, level of status and factor comparison.

External Equity

Here the market pricing analysis is done. Organizations formulate their compensation strategies by assessing the competitors’ or industry standards. Organizations set the compensation packages of their employees aligned with the prevailing compensation packages in the market. This entails for fair treatment to the employees. At times organizations offer higher compensation packages to attract and retain the best talent in their organizations.

Salary-SurveysOrganizations have to bridge the gap between the industry standards and their salary packages. They cannot provide compensation packages that are either less than the industry standards or are very higher then the market rates. For the purpose they undertake the salary survey. The Salary survey is the research done to analyze the industry standards to set up the compensation strategy for the organization. Organizations can either conduct the survey themselves or they can purchase the survey reports from a reputed research organization. These reports constitute the last 2-5 years or more compensation figures for the various positions held by the organizations. The analysis is done on the basis of certain factors defined in the objectives of the research.

Objectives of Salary Survey

To gather information regarding the industry standards

To know more about the market rate i.e. compensation offered by the competitors

To design a fair compensation system

To design and implement most competitive reward strategies

To benchmark the compensation strategies

Types of Compensation Surveys

There are two types of compensation surveys undertaken by the organizations.

Standard Surveys

Standard surveys are undertaken by organizations on a regular basis. These surveys are conducted annually based on the organizational objectives. These surveys attempt to cover the same companies every year and provide the same time of analysis. The reports are published annually by the research organizations. The organizations willing to formulate their compensations strategies based on the surveys purchase the reports from the research organization.

Custom Surveys

At times, a few organizations need to know some specific information. The surveys which cater this need are known as custom surveys. The organizations either higher research organizations to conduct theses surveys for them or they themselves conduct the survey by sampling few of the competitors on their own. These surveys do not have any time interval. They are undertaken as the need arises. They focus on important issues usually one or two.

Types of Compensation

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 is effectively managed, it contributes to high organizational productivity.

Direct Compensation

Indirect Compensation

Direct Compensation

 Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are given at a regular interval at a definite time.

.Basic Salary

Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month, etc. It is the money an employee receives from his/her employer by rendering his/her services

House Rent Allowance

Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work.

Conveyance

Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.

Leave Travel Allowance

These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization.

Medical Reimbursement

Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements.

Bonus

Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one month’s salary of the employee.

Special Allowance

Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.

Indirect Compensation

Indirect compensation refers to non-monetary benefits offered and provided to employees in lieu of the services provided by them to the organization. They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes.

Leave Policy

It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as, casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay, etc.

Overtime Policy

Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay, etc.

Hospitalization

The employees should be provided allowances to get their regular check-ups, say at an interval of one year. Even their dependents should be eligible for the medi-claims that provide them emotional and social security.

Insurance

Organizations also provide for accidental insurance and life insurance for employees. This gives them the emotional security and they feel themselves valued in the organization.

Leave Travel

The employees are provided with leaves and travel allowances to go for holiday with their families. Some organizations arrange for a tour for the employees of the organization. This is usually done to make the employees stress free.

Retirement Benefits

Organizations provide for pension plans and other benefits for their employees which benefits them

after they retire from the organization at the prescribed age.

Holiday Homes

Organizations provide for holiday homes and guest house for their employees at different locations. These holiday homes are usually located in hill station and other most wanted holiday spots. The organizations make sure that the employees do not face any kind of difficulties during their stay in the guest house.

Flexible Timings

Organizations provide for flexible timings to the employees who cannot come to work during normal shifts due to their personal problems and valid reasons.

Need of Compensation Management

A good compensation package is important to motivate the employees to increase the organizational productivity.

Unless compensation is provided no one will come and work for the organization. Thus, compensation helps in running an organization effectively and accomplishing its goals.

Salary is just a part of the compensation system, the employees have other psychological and self-actualization needs to fulfill. Thus, compensation serves the purpose.

The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.

        

Strategic Compensation

Strategic compensation is determining and providing the compensation packages to the employees that are aligned with the business goals and objectives. In today’s competitive scenario organizations have to take special measures regarding compensation of the employees so that the organizations retain the valuable employees. The compensation systems have changed from traditional ones to strategic compensation systems.

Banking & Finance Sector

Indian banking and finance sector is currently experiencing high growth rate. With increased FDI and high inflation rates, finance sector is enjoying high deposits. Financial institutes and commercial banks are expanding their business and going for large scale recruitments. The banks are collaborating with insurance units to provide insurance coverage to their clients. Few of the banks are also dealing in gold and silver.

Nationalized banks are preferred more as they provide for job security. Compensation packages in banks have always been lucrative. Incentives, special allowances, travel leaves, concessions, paid vacations, paid leaves, retirement benefits are also offered along with basic salary and other allowances such as house rent allowance, transportation vehicle etc. Compensation package in finance and banking sector depends on the level of knowledge and experience an individual have.

Top players such as nationalized banks- Bank of India, SBI, Indian Overseas Bank, Bank of Baroda, Punjab National Bank, HDFC, ICICI and other private banks, financial institutes such as Bajaj Capital, Kotak Mahindra, etc, are offering high salary packages with lucrative incentives to attract and retain their talented work force.

Figure: Average salary offered in Banking & Finance Sector Based on Experience

ENTRY LEVEL COMPENSATION PACKAGES

Indian finance & banking sector offers jobs in various segments. The managerial level jobs are held by management professionals, commerce graduates and finance professionals. However at the entry level there are more jobs for graduates in marketing segment. The positions are for customer care executives, marketing executives in credit card department, loan department, verification department, recovery department. In other departments like audit, credit, advances, foreign exchange, etc individuals are professionals such as CA, CS, MBA-finance, commerce graduates, B.com, M.Com etc. Software packages such as tally certification guarantees jobs in the finance sector.

Getting into nationalized banks is quite difficult, but if the candidate has desired skills and willingness, he/she has to pass an entrance exam followed by personal interview and medical inspection. These exams are conducted by the respected banks only. Packages offered to individuals are based on their knowledge level and training experience. The profile of the candidate also matters. However the candidates looking for a career in finance should possess the necessary skills. They are:

Effective Communication Skills

Commerce Background

Excellent Marketing Skills

Strong Analytical Skills

Ability to meet deadlines

Apart from pay packages finance professionals also get high incentives and perks. The industry provides for special allowances such as annual bonus, house rent allowances, mobile allowances, transportations, travel leaves, paid vacations, etc.

Figure: Average Salary offered in Indian Banking & Finance Sector for Entry Level Jobs

Management Level Compensation

Finance sector is a promising sector where compensation is considered. The sector has witnessed 17% average increase in the salary packages in the year 2006. The compensation packages offered to managerial level employees are very much lucrative. Besides the basic salary employees are also provided with heavy perks and incentives with special allowances. They are offered club memberships, company’s vehicle, travel leaves, paid vacations, other allowances and non-monetary benefits.

Organizations also conduct training and development programs for their employees’ professional growth. Organizations provide for certification courses and online degree courses for the employees.

At higher level employees are given employee stock options. Individuals are given equal preferences on the basis of their performance.

          Figure: Components of Compensation Packages at Managerial Level in Banking & Finance

Sector

Nationalized banks offer job security and private financial institutes provide high lucrative packages. With the globalization, liberalization, business expansion, more number of competitors, jobs in the financial sector are also demanding too much hard work. Earlier bank jobs were considered very comfortable ones but now the scenario has been changed. Indian banking sector is heading for 24*7. Some of the nationalized and private banks have started working 8 to 8.

Hospitality SectorIn next 10 years Indian hospitality sector is expected to grow at the rate of 8%. The emergence of Government voluntary schemes such as Incredible India has caused more and more tourists pouring in Indian holiday destinations. This has caused more and more development of the hospitality sector. The sector can be categorized into two sub industries- hotel industry and travel & tourism industry.

The sector offers jobs in various segments customer care executives, marketing, servicing, house keeping, kitchen management, faculties, cabin crew, finance, help desk, management, etc. Hospitality sector offers lucrative compensation packages.

The compensation package in the sector includes heavy incentives, meals, accommodation, and travel allowances along with basic salary. Usually basic salary is less but the incentives and perks known as tips provides for handsome earnings.

The compensation packages in the industry are based on the brand and position an individual is working for. There’s a huge gap between the compensation provides by a 5 star hotel and an ordinary 1 star hotel. The package and position is also depicted on the basis of the educational background of the candidate. A person with hotel management degree will earn more than an individual with no certifications in hotel management.

Figure: Distribution of Compensation Packages in Hotel Industry*

Figure: Distribution of Compensation Packages in Tourism Industry*

Entry Level Compensation PackagesHospitality Sector offers lucrative packages to fresh graduates. An individual needs to complete a full time or part time degree or certification course to enter the promising industry. The compensation packages offered vary from job to job, segment to segment and brand to brand. For example, a pilot in some private airlines gets a very high package than a driver in a roadways organization. But the industry offers heavy returns to the owners of the business enterprises.

Hotel Industry An individual who wish to join the hotel industry needs to have a certification course or diploma/degree in hotel management. Of course there are many low grade restaurants and other family restaurants and

hotels where these certifications are not required but there the compensation packages are very less. The brand names such as ITC hotels, Hyatt Regency, Oberoi Hotel and Leela Hotels offer high lucrative packages with heavy perks and incentives. But these organizations look for diploma/degree holders. An individual must possess the following skills to fulfill his/her salary expectations:

Effective Communication Skills Specialized Skills Strong Commitment Level Willingness to Work at Stretch Team-oriented Willingness to Work in Shifts

Tourism Industry

Tourism industry also offers very promising compensation packages. There are various job openings in the sector. One can start his/her career in any of the sub segments. There are growth opportunities in railways, airlines, roadways and crews. There are both public and private organizations dominating the sectors. Crews and Airlines offer most lucrative packages to fresh graduates. They look for degree/diploma holders. Top players such as Air India, Indian Airlines, Deccan Airways, Indian Railways, DTC, BEST, Shipping Corporation of India Ltd are offering most competitive packages to their employees. One needs to have some skills and attributes to start his/her career in the industry. The desired skills are:

Effective Communication Skills Specialized Skills Strong Commitment Level Willingness to Work at Stretch Team-oriented Willingness to Travel Willingness to Work in Shifts

 

Management Level Compensation PackagesHospitality industry offers high packages. Although the basic salary in the sector is less as compared to other sectors but the incentives and perks offered are very high that makes the total amount a huge one. With relevant experience, diploma certification/degree provides for an added advantage for the individuals working in the hospitality industry.

Top management enjoys very high compensation packages in the hotel industry. The packages include basic salary, incentives and bonus. Due to immense competition packages are increasing at a high rate to attract and retain the talented workforce.

Big names such as Hyatt Regency, Leela Hotels, ITC Hotels, Oberoi Hotels are offering lucrative packages. In the tourism industry airlines such as Air India, Kingfisher, Jet Airways and Indian Airlines are offering higher packages to attract and retain best human resource.

               

Figure: Average Salary Offered to Top Management in Hotel Industry

Hospitality sector provides for varied compensation packages. For example, hotels located in center city and resort areas provide higher salary to their managers as compared to hotels located along highways or in the suburbs. In a study it was found that managers of a hotel located in center city earns an average of 125% more than the manager working at a highway hotel. Industry is expected to grow at the rate of 8% that predicts that compensation packages for the employees will also increase with the same pace.  

QUESTIONNAIRE FILLED BY HDFC EMPLOYEES

1. What types of compensations are available?

Analysis:

There are two type of compensation are available are direct or indirect compensation. Direct includes Base Pay,Commissions,Overtime Pay, Bonuses, Travel/Meal/Housing Allowance and indirect compensation includes vacation, leaves, retirement, taxes.

3. Who handle the compensation management department in your organization?

_______MANAGER__________________________________________

Analysis:

The manager handle the compenstation management department in their

organization.

4. On what basis company provide compensation to their employees.

a) Base Pay b) Commissions

c) Travelling/meal/housing allowance d) Any other

20%

80%

Sales

Base Pay

Commissions

Travelling/meal/housing al-lowance

Any other

Analysis:

This graph shows that company provide compensation to their employees on the

basis of base pay & Travelling/meal/housing allowance.80% of employee prefer

Travelling/meal/housing allowance & only 20% of employee prefer base pay.

5. What kind of compensation you prefer.

a) Monetary b) Rewarding

c) Motivation d) Holiday packages

33%67% Rewarding

MotivationHoliday packagesMonetary

Analysis:

From the chart above we find that, 67% of employee prefers monetary benefits & only 33% of employee are happy & satisfied with non monetary benefits like rewards. In this company neither the employee are motivated nor are they satisfied with holiday package as compensation.

6. Are you satisfied with the compensation you receive.

a) Yes b) No

80%

20%

Yes

No

Analysis:

From the chart given above we can clearly see that 80% of employees are satisfied with the compensation they receives & only 20% of employees are dissatisfied with the compensation they receives.

7. What do you think that HDFC is providing better compensation package to the employees.

a) Yes b) No

If “NO” than which organization do you think?

80% 20%

YES NO

Analysis:

Yes, HDFC is providing better compensation package to the employees out of 10 employee % of employees are satisfied with the compensation they get and % of employee are dissatisfied with the compensation provided by the company.

8. Is there different type of compensation for different type of services.

a) Yes b) No

100%

YES

NO

Analysis:

Yes, there are different types of compensation for different type of services like direct and indirect compensation provided to the employee of the organization for increasing their motivation and retention of employees.

9. Is cash still king in employee compensation.

a) Yes b) No

80%

20%

Sales

YES

NO

Analysis:

From the chart given above we can clearly see that the cash is still king there because everyone is satisfied with the monetary motivation and not by non monetary motivation. Here we can see that 90% of employees are satisfied with monetary value rather than

10. Is Compensation based more on group performance and less on individual contribution.

a) Yes b) No

10%

90%

YES

NO

Analysis:

In this organization compensation is based more on individual contribution because every employee is single entity there and they are judge on the basis of self performance.

11. Is there any procedure of receiving formal feedback by employees on Company policies, compensation, benefits, and employee attitudes.

a) Yes b) No

90%

10%

YES

NO

Analysis:

Yes, there are procedure of receiving formal feedback by employees on Company policies, compensation, benefits, and employee attitudes. It helps in bringing out new ideas. It also helps in improving employee and management relationship number of ideas helps in choosing the better option from them which will be more effective and beneficial for the organisation.

12. In your organization employees receive effective performance appraisal.

a) Yes b) No

Sales

YES NO

Analysis:

Yes, in our organization employee receive effective performance appraisal because it give pleasure to the employee by rewards and they also get motivated which leads to the effective performance.It enhances effectiveness of employees and boosts the confidence level of employees.

13. Are you getting training for improving the performance.

a) Yes b) No c) can’t say

0.8 1 1.2 1.4 1.6 1.8 2 2.20

2

4

6

8

10

12

Sales

Analysis:

Yes, tanning help in improving the performance of employee. It helps in developing skills & motivation level of employees. It also provides practical knowledge. It is necessary for the organization to provide training to their employees for better performance and update employee time to time. It helps in increase in the performance & motivation level of employee and also enhance effectiveness of employees.

14. Are you free to give ideas to the higher management.

a) Yes b) No

YES NO0

1

2

3

4

5

6

7

8

9

Sales

Analysis:

Yes, the employees are free to give ideas and suggestions to the higher management. By this new and different ideas are bring out of the box and this help in taking better decision which may be beneficial for the organization. It also boosts the confidence level of employees and their ideas are entertained so they get motivated also.

FINDINGS

The compensation management policy is good in HDFC bank.

The employee of the organization is satisfactory to the employees.

The employees are motivated because of the environment of the organization.

The products of HDFC bank have good credibility in the region.

CONCLUSION

The Compensation Committee reviews the overall compensation structure and policies of the Bank with a view to attract, retain and motivate employees, consider grant of stock options to employees, reviewing compensation levels of the bank's employees.

The Bank's compensation policy is to provide a fair and consistent basis for motivating and rewarding employees appropriately according to their job / role size, performance, contribution, skill and competence.