Current Issues on Compensation

7/29/2019 Current Issues on Compensation

1/21

Presented by:Supriya


2/21

What iscompensation


3/21


4/21

Internal equity versus external equity

Fixed pay versus variable pay

Performance versus membership

Job versus individual pay


5/21

Elitism versus egalitarianism

Below market vs above market compensation

Monetary vs non monetary rewards

Open vs secret pay

Centralisation vs decentralisation of paydecisions


6/21

Despite high pay, employees will continue toleave

Pay has substantive and symboliccomponents. Its important to balance both

Time to think whether remuneration should

be made transparent to all.


7/21

INDIVIDUAL INCENTIVES GROUP INCENTIVES

TIME BASED OUTPUT BASED

HALSEY PLAN

ROWAN PLAN

EMERSON PLAN

BEDEAUX PLAN

TAYLOR PLAN

MERRICKS PLAN

GANTT PLAN

PRIESTMEN PLAN

SCANLON PLAN


8/21

Merits:

-simple

-regular and fixed income-good quality-Avoids wasteful handling of materials and

machine-equality


9/21

Demerits:

-Not encouraging to efficient worker

-rigid supervision required-no rewards linked to performance


10/21

TOTAL WAGE = T*R+50%(S-T)*Rmerits: - simple

- beneficial

- guaranteed minimum wage- workers become efficient

Demerits:- std based on past perfomance

-half the benefit-quality may suffer-much clerical work


11/21

TOTAL WAGES= T*R+[T*R*(time saved/stdtime)]

Merits:-guaranteed minimum wage

-beneficial-check against overspeeding wrk

Demerits:- difficult to understand

-discouraged to save more half the stdtime


12/21

TOTAL WAGE= T*R+ (% OF BONUS*T*R) EFFICIENCY LEVEL= (Std time/time

taken)*100Bonus- increases beyond the prescribed levelusually 66.67%

Merits:-guaranteed wage-fair rate of bonus-bonus begins at 66.67%


13/21

Demerits:- employer may fix the std time at alower

-create jealousy and disunity-lots of clerical work involved-not flexible.


14/21

Std time represented in terms of B 75% of wage for time saved paid as bonus to

worker and 25% to foremen TOTAL WAGES= S*R + 75% OF R(S-T)Merits: -minimum wages guaranteed

-foremen is motivateddemerits:- workers may resent sharing

-calculations are complex


15/21

Merits:

- direct relation between efforts and rewards

- Encouragement to efficient worker- Just and fair to all- Increase productivity- Less Supervision cost


16/21

Demerits:- Deteriorate quality- Industrial disputes

- Wastage of material- Create jealousy among worker


17/21

Two rates are set: Lower rate & Higher ratemerits: - sufficient incentives to efficient worker

-inefficient worker penalised- need not share bonus with foremanDemerits:- no guarantee wage

-deterioration in quality-employer may fix very high stds


18/21

Three rates:-


19/21

Std time fixed for the task Who do not complete the task paid the basic

rate Who completes the task within specified time

minimum paid with bonus varying from 20%to 50%


20/21

TYPES:

-Priestman bonus plan

-Townes gain sharing plan

-Scanlon plan


21/21

Documents

Current Issues on Compensation