Compensation managementCompensation is what employees receive in
exchange for their contribution to the organisation.
Total compensation =Direct + Indirect CompensationBase
PayIncentivesBenefits
Components of employee remunerationRemuneration Financial
Non-financialBasic wagesIncentives,Individual plansGroup
plansFringe benefitsP.F.Medical careAccident reliefHealth and Group
insurance PerquisitesCarClub membershipPaid holidaysFurnished
houseStock option schemeJob contextChallenging
jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob
sharing etc
Concepts of WagesMinimum WagesFair WagesLiving wages
Objectives of compensation planningInternal equityExternal
equityIndividual equityAttract talentRetain talentEnsure equityNew
and desired behaviorControl costsEase of operation
Motivation and performance modelEmployees setGoals
andexpectationsPerformance Is rewardedEmployee considersEquity of
Performance rewardsFeedback to
employeesRewards aregivenEmployee sets new goals and
Expectations based on prior experiences
Importance of an ideal remuneration systemDesire forperformance
more paystrikesgrievancessearch for optionsabsenteeismturnoverPay
dissatisfactionlower
jobpsychologicalattractivenessdissatisfactionwithdrawalof
jobsabsenteeismvisits to the Doctorpoor mentalhealth
Influencing factors of Remuneration Remuneration
ExternalInternalLabour MarketCost of LivingLabour UnionsGovt.
LegislationsSocietyEconomy
Business StrategyJob evaluation & PAThe Employee
Devising a remuneration planJob Description
Job Evaluation
Job Hierarchy
Pay Survey
Pricing Jobs
The Development of a wage trend-
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