“STUDY OF COMPANSATION PRACTICIES IN CAPARO”

SUMMER TRAINING REPORT

Submitted in the partial fulfillment for the degree of

MASTERS IN BUSINESS ADMINISTRATION

At

University School of Business

Chandigarh University, Gharuan

(2018)

Submitted by: Supervised by

Pooja Mr.Anchit Jhamb
17MBA1701

Chandigarh University

DECLARATION
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I declare that this project titled “STUDY OF COMPANSATION PRACTICIES IN

CAPARO” has been worked on, drafted and finalised by me – Pooja, 17MBA1701 student of

MBA 2nd semester of the batch 2017-2019. This project is an original piece of work and not

copied or plagiarised from any other source of literature, review article or published reference in

this regard. This is purely my Summer Internship Report being submitted in partial fulfillment of

the degree of Master in Business Administration from University School of Business,

Chandigarh University and has not been submitted for the reward of any certificate, diploma,

degree, fellowship with any college / university nor educational institute before this.

In case any part of this work is reported as copied from any another source, I shall be solely

responsible for the same and will be answerable for any action taken in this regard.

Students’ Signature

Name Pooja

UID No 17MBA1701

Date

Acknowledgement

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I acknowledge here the names of those people who have been instrumental in preparation of my

project.

I acknowledge my gratitude to my parents whose support, dedication and honest efforts have

given me an immense help in doing this project.

I express my deepest gratitude and veneration to my project guide Mr.Anchit Jhamb for

providing his valuable guidance, continuous motivation and genuine suggestions without which

this project would not have seen the light of the day.

Last but not the least I record my sincere thanks to all beloved and respectable persons who

helped me and could find any separate mention.

Above all I thank “GOD” the most beneficial, the most merciful that I have been able to

complete my training project successfully.

Pooja

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 TABLE OF CONTENTS

Chapter No. Nomenclature Of Chapter Page Nos.

Cover Page ---

Declaration by the student

Certificate of Authenticity of Report to be signed by Faculty guide

Acknowledgement

Contents

1 Relevant Information about the company/organization 06

2. Introduction and overview of project undertaken 12

3 Objectives and need of the study 43

4. Review of literature 44

5. Database and mythology 52

6. Analysis and interpretation 55

Recommendations for future improvements, to company 70

Learning outcome 72

7 Conclusion 74

Bibliography 75

Annexures (including several questionnaires, Tables, Charts, 76

Figures & Diagrams

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 Abstract
The work done in this project is to find out the level of employee satisfaction towards the

compensation management services provided by Caparo. The basic focus of the study is to find

out whether the employees are satisfied with the amount of salary and benefits they are receiving

as well as to know whether they have any problems in the calculation of their salaries and other

benefits. The study covers various aspects like satisfaction in respect of amount, time of

increment, solution to their compensation related issues, whether they are satisfied or not.

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 INTRODUCTION TO THE COMPANY
Caparo is a diversified global association of businesses with over a 1.5bn Euro turnover. With

interests predominantly in the design, manufacture and marketing of value added steel and niche

engineering products, Caparo’s wider activities encompass also new product development,

materials testing services, hotels, media, furniture and interior design, financial services, energy,

medical products and private equity investment.

The Group was founded in 1968 by Indian born British Industrialist, the Rt. Hon. Lord Paul of

Marylebone, who remains Chairman. Today, Caparo and its associates employ more than 10,000

people in their worldwide operations across Europe, North America, and Asia (including the

Middle and the Far East).

CAPARO IN INDIA

Caparo’s presence in India was first established in 1994 with a joint venture with the country’s

largest car manufacturer, Maruti Suzuki. Today Caparo India operates from over 25 sites, many

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of which are a result of greenfield projects and contain state-of-the-art equipment. The business

has extensive experience in the automotive sector and capabilities in forging, steel tube

manufacture, aluminium die casting, fasteners, energy and financial services. For further

information visit www.caparo.co.in.

Caparo Middle East is a worldwide distributor and trader of industrial and electrical products,

including cable and cable management systems

Caparo Middle East is part of the Caparo Group, a highly diversified global association of

businesses founded in 1968 in the UK by Rt. Hon. Lord Paul of Marylebone. Today, the Group

operates internationally over 40 sites, serving customers in more than 50 countries, primarily

from operations based in UK, USA, India and associates in China.

In 2005, Caparo Middle East was established in Jebel Ali Free Zone, Dubai and has successfully

supplied cable management and related products to the region. Our products have been supplied

to all major projects in the region including Burj Khalifa, Yas Island, Palm Jumeirah and Burj Al

Arab.

Our company operates from its own warehouse, showroom, and offices, employing a highly

focused team providing customers with stock, logistics, technical and sales support.

Working with an extensive network of regional partners in the UAE, Bahrain, Kuwait, Oman,

Qatar, Saudi Arabia and neighboring countries , we have built a reputation based on premium

products and quality of service.

Caparo UK has been serving the GCC market for over 30 years. At the end of 2005, Caparo

Middle East was established in Jebel Ali Free Zone, Dubai which has successfully supplied cable

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management products in the Gulf region, and have recently expanded its product range with the

addition of electrical cables.

Our Main Product range include:

1. Rubber Cable (HO7RN-F) – TFKable Poland

2. Flame X 950 Cable (fire alarm & Fire resistance cables) – TFKable Poland

3. Marine Cable TFKable Poland

4. LV cables & LSF Cables – Riyadh Cable

Caparo Middle East is the authorized distributor and stockist for TF Kable S.A, Poland in the

GCC region. TF Kable is the 3rd largest European cable manufacturer in Europe, having over

100 years of expertise, and technologically advanced acquired factories in Poland. We have a

wide range of TF products which include LV, MV, HV & EHV cables up to 400kV, special

cables such as Marine & shipboard cables, Fire Resistant or Fire Survival cables (TFK brand

FLAMEX 950 Series 1, 2, 3, 4 & 6), Lead sheathed cables for oil & gas applications, wind

energy cables, welding cables, LSF sheathed cables, panel wires, mining cables Tele-com cables

and many more customized types based on various applications & project requirements.

All TF Kable products are manufactured in Poland (Europe) and are in accordance with the

International standards, BS, IEC, VDE UL and local Polish standards. TF Kable have over 460

Product certificates certified by International certification bodies worldwide.

For more information, the complete product listing and technical specifications, download our

brochure below or visit

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UK – Caparo Atlas Fastenings

Taptite thread generating products Trilobular thread forming bolts for use in steel and aluminium

eliminating the need to tap a thread, thus avoiding cross threading on assembly and reducing in

place costs.

CorflexInduction hardened version of the above family of parts, for applications in steel of

higher hardnesses and deep thread generation.

KleertiteTrilobular thread former combining a paint removing feature employed prior to thread

generation. Specifically for earthing applications..

PowerlokAll metal prevailing torque trilobular locking feature, combining integral crest thread

and tapered lead. Designed for use in tapped holes.eg. useful for electrical earthing screws.

KleerlokAs ‘Powerlok’ with additional paint clearing feature.

Extrude-titeMetal forming screw for sheet metal and for rapid hole finding where clearance holes

and pilot holes are not in line. Generally for short thread engagements.

Bolts• Cold forging bolts and setscrews. M6 to M24, up to 200mm long• Grades 4.6 to 12.9, W

quality, SAE 2,5,8• Particular expertise with engine, suspension and wheel bolts• Range of heads

including Hexagon, Flange Hexagon, Countersunk, Button, Tee, 12-point, Torx®• Range of ends

including chamfered, dog, CA, paint clearing points• Captive washer assemblies (Sems), Paint

clearing threads (Stets)• Thread forms including metric, coarse, fine and extra fine, Duo-Taptite,

Corflex, Powerlok

Screws• Cold forging screws, M3 to M8 in carbon and stainless steel, up to 300mm long• Grades

4.6 to 12.9. Case hardened Expertise in vehicle trim parts• Self tapping, thread forming Various

head forms and drive features including Hexagon, Flange Hexagon, Pan, Countersunk, Flange

Pan with Torx®, Pozi, Supa Driv or Phillips drives and security drives• Various thread forms

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including Taptite II, Duo-Taptite, Taptite 2000, Hi-Grip, Plasgrip Captive washer assemblies

(Sems), Paint clearing threads (Stets)

Studs• Cold forging studs from carbon and stainless steels. M6 to M14, up to 120mm long•

Grades 4.6 to 12.9• Bar turned studs. M6 to 24, up to 400mm long• Range of drive features

including Torx® drive (internal or external)• Various thread forms including thread-forming and

thread locking• Expertise in engine studs and high temperature exhaust applications

Production Facilities

Bolts• 52 Cold Forging machines• 76 Finishing machines (Trim, Point, Roll, Grind, Sems)

Screws• 10 Cold Forging machines• 14 Finishing machines

Studs• 5 Cold Forging Machines• 10 Bar Turning Autos• 12 Finishing Machines

Product range licences

WhiztiteAn anti-vibration locking feature comprising underhead serrations designed to combat

loosening.

6 Lobe6-lobe internal and external driving feature.

Pozidrive, Phillips, SupadrivCross recess driving features, particularly applicable to small

diameter screws.

Plastite, Plasgrip, Hi-grip, Hi-LoThread forming screws for application in plastic components

selected depending upon the grade of plastic being used.

India – Caparo Fasteners, Chopanki

The facility was launched in April 2006 and occupies a 46,000 square metre site in Chopanki.

The site is principally involved in the manufacture of special fastenings and components for the

automotive industry. Key customers include Honda Motors.

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Specific product lines include:• Cylinder bolt heads• Connecting rod bolts• Main bearing bolts•

Fly wheel bolts• Transmission bolts• Chassis/ mounting bolts• Trim line / body bolts• Long

bolts• Flange bolts• Round head bolts• Collar bolts• Double end bolts• Socket head bolts

CAPARO Engineering India Private Limited

Krishna Radha(Manager)

T1, Sunguvarchatiram, near chikour industrial estate t1 t2, Sunguvarchatram, Chennai - 602106,

Tamil Nadu, India

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 OVERVIEW TO THE PROJECT

What is COMPENSATION MANAGEMENT

Human Resource is the most vital resource for any organization. It is responsible for each and

every decision taken, each and every work done and each and every result. Employees should be

managed properly and motivated by providing best remuneration and compensation as per the

industry standards. The lucrative compensation will also serve the need for attracting and

retaining the best employees.

Compensation is the remuneration received by an employee in return for his/her contribution to

the organization. It is an organized practice that involves balancing the work-employee relation

by providing monetary and non-monetary benefits to employees.

Compensation is an integral part of human resource management which helps in motivating the

employees and improving organizational effectiveness.

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:

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

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employees in return for their services. If the compensation offered is effectively managed, it

contributes to high organizational productivity.

Direct Compensation

Indirect Compensation

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.

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Compensation is payment in the form of hourly wages or annual salary combined with benefits

such as insurance, vacation, stock options, etc. that can positively or negatively affect an

employee's work performance.

An ideal compensation management system will help you significantly boost the performance of

your employees and create a more engaged workforce that’s willing to go the extra mile for your

organization. Such a system should be well-defined and uniform and should apply to all levels of

the organization as a general system.. Plus you’ll enjoy clearer visibility into individual

employee performance when it comes time to make critical compensation planning decisions.

With effective compensation management you’ll also enjoy clearer visibility into individual

employee performance when it comes time to make critical compensation planning decisions.

These performance appraisals assist in determining compensation and benefits, but they are also

instrumental in identifying ways to help individuals improve their current positions and prepare

for future opportunities.

Definition

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.

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Types of Compensation Management

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

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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

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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.

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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.

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.

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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:

 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.

 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.

 Such a system should be well defined and uniform. It will be apply to all the levels of the

organization as a general system.

 The system should be simple and flexible so that every employee would be able to

compute his own compensation receivable.

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

 It will raise the morale, efficiency and cooperation among the workers. It, being just and

fair would provide satisfaction to the workers.

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

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

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

 It should motivate and encouragement those who perform better and should provide

opportunities for those who wish to excel.

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 Sound Compensation/Reward System brings peace in the relationship of employer and

employees.

 It aims at creating a healthy competition among them and encourages employees to work

hard and efficiently.

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

 The perfect compensation system provides platform for happy and satisfied workforce.

This minimizes the labour turnover. The organization enjoys the stability.

 The organization is able to retain the best talent by providing them adequate

compensation thereby stopping them from switching over to another job.

 The business organization can think of expansion and growth if it has the support of

skillful, talented and happy workforce.

 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.

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COMPENSATION MANAGEMENT: SUCCESS FACTORS

Many of today's senior executives name pay-for-performance as the most critical tool in

achieving the greatest financial results at their companies. But, implementing real, pay-for-

performance is easier said than done. Success Factors makes it easy for you to quickly and easily

implement a powerful pay-for-performance strategy. By rewarding great execution, you will

better retain your top talent and drive organizational performance that exceeds all expectations.

Plus, you'll enjoy clearer visibility into individual employee performance when it comes time to

make critical compensation planning decisions.

• True pay-for-performance culture improves retention. Employees who outperform their

peers will be rewarded appropriately, feel valued and happy—and more likely to stay with your

company.

• Ongoing compliance. Design your compensation strategy with objective data and

communicate it to managers to stay within allocated budgets and to employees to show the clear

link between compensation and performance expectations.

• Budget optimization. Run "what-if" scenarios and instantly see how increasing merit pay

to your best employees would impact your budget.

• Cost savings. Eliminate thousands of dollars from your expense column each year by

making sure you're not overpaying low performers. Also, the easy-to-use automated system will

save compensation managers time and money.

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• Zero error system. Manage your compensation in a secure environment with streamlined

workflows where your data is determined via calculation and eligibility engines—eliminating

privacy breaches and human calculation errors.

Human Resources Management - Benefits & Compensation

In a sluggish economy, compensation system gets a new focus by rewarding star performers

more than the rest of the pack 3-P Compensation: Pay for Performance In this article we look at

how an organization develops a motivating and rewarding incentive plan. An executive

perspective on employee benefits Executives say employee benefits help companies compete but

have an incomplete understanding of benefits and how they perform. Results of a McKinsey

Survey. pdf-file. 2006. Article starts at page 12 An Overview of Recent Trends in Incentive Pay

Programs This article examines recent trends and developments in an increasingly popular HR

practice--incentive pay programs. Pdf-file Analyzing Compensation Data Guide describes three

approaches that Federal contractors may use to analyze their compensation systems; analyses

may be useful in determining if there are patterns of discrimination in the workforce; focus is on

analyses of salaries or wages, procedures can be used to analyze other forms of compensation as

well. TOP Are Higher Pay Increases Necessarily Better? This study investigated the relationship

between pay increase percentages and pay satisfaction among 118 MBA students and found that

pay satisfaction had the largest increase between three percent and seven percent and appeared to

level off between seven percent and eleven percent, suggesting that there may be a point at

which high pay increases may not necessarily lead to more satisfaction. In addition, it was found

that pay increases between six and eight percent are the minimum amounts needed for pay

increase satisfaction. Finally, we suggest that employees may not need as high of a pay increase

to experience satisfaction with their pay increase when providing those employees with a signal,

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such as an average pay increase. pdf Building a Better 401(k) 401(k) plan sponsors are taking

steps to make their plans more attractive to employees in 2003. January 2003 Compensation

Planning: The Key to Profitability This book can help brokers create effective individual

company compensation plans by giving them a better understanding of how changes to existing

compensation schedules affect the company finances as a whole. Pdf-file 3.6 MB

Compensation Plans An overview, article provided by Salary Source Explaining Executive

Compensation Managerial Power vs. the Perceived Cost of Stock Options. Working Paper. Pdf-

file Glossary Of Employee Benefit Terms Is Your Long-Term Incentive Plan Really

Performance-Based? Long-term incentive plans (LTIPs) typically provide the largest component

of senior executives’ compensation, most often through one or more of three equity-based types:

stock options, restricted stock, and what are often called performance shares.

This article focuses on performance shares, an increasingly common form of performance-based

LTIPs, and their importance as a major component of executive pay. We believe that

performance shares establish the strongest link in tying compensation to performance. The article

also presents data on the increasing prevalence of these types of plans. pdf

Labor Statistics Extensive compilation of statistics and data Misc. Issues Overview on some

compensation- and benefits-related issues: pay equity, variable pay systems, stock plans,

retirement plans, health and welfare plans, paid time off, government mandated benefits Offer a

Choice of Compensation Plans to Gain a Competitive Advantage pdf-file 2003 Organizational

Pay Mix The Implications of Various Theoretical Perspectives for the Conceptualization and

Measurement of Individual Pay Components. Pdf-file Organization-wide Broad-based

Incentives: Rational Theory and Evidence Despite the widespread use ofincentive pay, there is

limited evidence about what factors influence its organization-wide, broad-based application.

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Pdf-file Paying for Performance: An Overlooked Opportunity Sales force deployment and

compensation are among the most powerful means a company has to improve growth, market

share, and profitability. Yet few companies take the time to align their payout systems with

current strategy. The author explains how to design a successful compensation plan that is

precise, fair, and simple. pdf-file Performance based Pay The Value of Performance-Based Pay

in the War for Talent, pdf-download version Performance Standards in Incentive Contracts

Research in incentives has focused on performance measures and pay-performance sensitivities

but has largely ignored the “performance standard,” which generates important incentives

whenever plan participants can influence the standard-setting process. Working paper. pdf-file

Promise and Peril in Implementing Pay for Performance: A Report on Thirteen Natural

Experiments Despite the popularity of pay for performance programs, very little research has

examined the dynamics and dilemmas associated with implementing these programs. We studied

the implementation of thirteen experiments in pay for performance that were initiated by local

management in a high-commitment company (Hewlett Packard). We examined Hewlett Packard

documents and interviewed managers to understand their experience with implementing these

programs. Managers reported a relatively unfavorable cost-benefit assessment of programs and

difficulty in designing and maintaining them, especially in a fast changing business environment.

Managers at each site eventually concluded that they could attain greater performance benefits

through alternative managerial tools like effective leadership, clear objectives, coaching or

training, and therefore discontinued their pay for performance programs. Finally, we discuss

implications for management and for future research.

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COMPENSATION MANAGEMENT : SALARY NEGOTIATION

Compensation management chapter contain wage and salary aspect. The word salary applies to

compensation that is uniform from one period to the next and does not depend upon the number

of hours worked.

Compensation Management Objectives:

Wage, Compensation and their administration

Job Satisfaction

Labour and Wage Theories

Classification of Wages

Machinery for fixing wages

Job Evaluation

Objectives of job evaluation and methods of evaluation

Promotions and transfers

Wage and Salary Administration:

The term compensation management is the alternative of wage and salary administration. Wage

word is commonly used for those employees whose pay is calculated according to the number of

hours worked. The concept of wage came from capitalist before it in the Jamindari system the

concept of wage was in the slaves form. Salary applies to compensation that is uniform from one

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period to the next and does not depend upon the number of hours worked. When we got for job

definition we found that job is defined as a collection or aggregation of tasks, duties, and

responsibilities that, as a whole, is regarded as the reasonable assignment to an individual

employee. Job is known as impersonal however position is known as personal. Job always

contains a position which defines some set of works.

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EMPLOYEE SATISFACTION:

What does the term ‘Satisfaction’ imply to an employee? It implies nothing else than the feeling of

either being contended or non-contended on using a product. 

Employee Satisfaction is a prerequisite for the customer satisfaction. Enhanced employee

satisfaction leads to higher level of employee retention. A s t a b l e a n d c o m m i t t e d

w o r k f o r c e e n s u r e s s u c c e s s f u l k n o w l e d g e transfer, sharing, and creation --- a key to

continuous improvement, innovation, and knowledge-based total customer satisfaction. When companies

are committed with providing high quality products and services; when companies set high work

standards for their employees; and when employees are empowered through training and development,

provided with knowledge and information, permitted to make mistakes without punishment, and trusted;

they will experience an increase in their level of satisfaction at work.

This level of satisfaction can be enhanced further if they are offered competitive

salary and benefit packages . Continuous improvement comes from the efforts of the

empowered employees motivated by visionary leadership. This is supported by the findings that empowerment

and visionary leadership both have significant correlation with employee satisfaction. Teamwork is also supported

by the findings. In addition, the study found significant correlation between employee satisfaction and employee’s

intention to leave. The success of a corporation depends very much on customer satisfaction.

A high level of customer service leads to customer retention, thus offering growth and profit opportunities

to the organization. There is a strong relationship between customer satisfaction and employee satisfaction.

Satisfied employees are more likely to stay with company.

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job satisfaction describes how content an individual is with his or her  job. It is a

relatively recent term since in previous centuries the jobs available to a particular person were often

predetermined by the occupation of that person’s parent. There are a variety of factors that can

influence a person’s level of job satisfaction. Some of these factors include the level of pay and benefits, the

perceived fairness o the promotion system within a company, the quality of the working conditions, leadership and

social relationships, the job itself (the variety of tasks involved, the interest and challenge the job generates, and the

clarity of the job description/requirements). The happier people are within their job, the more satisfied

they are said to be. Job satisfaction is not the same as motivation, although it is clearly linked. Job design

aims to enhance job satisfaction and performance methods include job rotation, job enlargement and job

enrichment. Other influences on satisfaction include the management style and culture, employee

involvement, empowerment and autonomous workgroups. Job satisfaction is a very important

attributes which is frequently measured by organizations. The most common way of measurement is the use

of rating scales where employees report their reactions to their jobs. Questions relate to relate of pay, work

responsibilities, variety of tasks, promotional opportunities the work itself and co-workers. Some questioners ask

yes or no questions while others ask to rate satisfaction on 1 – 5 scale 9where 1represents “not all

satisfied” and 5 represents “extremely satisfied”).

Definitions

Job satisfaction has been defined as a pleasurable emotional state resulting from the appraisal of one’s

job; an affective reaction to one’s job; and an attitude towards one’s job. Weiss (2007) has argued that

job satisfaction is an attitude but points out that researchers should clearly distinguish the objects of

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cognitive evaluation which are affect (emotion), beliefs and behaviors. This definition suggests that we

from attitudes towards our jobs by taking into account our feelings, our beliefs, and our behaviors.

Affect Theory

Edwin A. Lockes Range of Affect Theory (1976) is arguably the most famous job satisfaction model.

The main premises of this theory are that satisfaction is determined by a Caparorepancy between what one wants

in a job and what one has in a job. Further, the theory states that how much one values a given facet of work (i.e.

the degree of autonomy in apposition) moderates how satisfied/dissatisfied one becomes when expectations

are/are not met. When a person values a particular facet of a job, his satisfaction is more greatly

impacted both positively (when expectations are met) and negatively (when expectations are not met),

compared to one who does not value that facet. To illustrate, if Employee A values autonomy in

the workplace and Employee B is indifferent about autonomy, then Employee A would be more satisfied

in a position that offers a high degree of autonomy compared to Employee B. this theory also states that too

much of a particular facet will produces stronger feelings of dissatisfaction the more a worker

values that facet.

Employee satisfaction is defined as a company’s ability to fulfill the physical, emotional, and

psychological needs of its employees. But this term can mean different things to different people.

According to Wilson Learning, they believe that if you can identify and measure a more

meaningful definition of satisfaction, you will find a closer causal relationship to organizational

performance. They call this “Fulfillment Satisfaction”, which is different from the traditional

meaning of satisfaction. An employee must have satisfaction with the job.

29
In order for that to be fulfilled, they need to value their day-to-day work activities, and need to

feel a sense of accomplishment or pleasure from the work itself. Employees need to have

satisfaction with relationships within the workplace. They want to enjoy working with their co-

workers. There needs to be satisfaction with leadership. People need to be managed effectively to

fulfill that satisfaction.

Evolution of Employee Satisfaction

The idea of employee satisfaction can be traced back to a significant movement that helped in the

evolution of understanding and managing people: the Human Relations Movement.

The Human Relations Movement included the Hawthorne Legacy and McGregor’s Theory X

and Y. The Hawthorne Legacy results concluded that individual needs, supportive supervision,

and group dynamics had an extremely powerful effect. Focusing more on an individual’s needs

was the beginning to the idea of employee satisfaction. This was also apparent in comparing and

contrasting McGregor’s Theories X and Y. McGregor’s Theory X assumes that most people

disliked work and would avoid it when they could. People must be coerced and threatened with

punishment before they would do work. Employee satisfaction was not a concern in Theory X. It

was in McGregor’s Theory Y that employee satisfaction started to show. Work was a natural

activity, like play or rest. People were viewed as creative and imaginative. Companies cared

more about the people who worked for them. The Total Quality Management Movement

included the Deming Legacy, which emphasized formal training for employees, helpful

leadership rather than order giving and punishment, elimination of fear so employees can feel

free to ask questions, and teamwork. When people are managed according to Total Quality

30
Management principles, everyone is more likely to get the opportunities and goods and services

they demand, ultimately resulting in a much higher level of employee satisfaction.

Compensation and benefits

Compensation and benefits is a sub-dCaparoipline of human resources, focused on employee

compensation and benefits policy-making.It is also known in the UK as “total reward” and as

“remuneration” in Australia and New Zealand.

COMPENSATION:

Would the three salespersons and the receptionist work for free? No. They would, like us all,

expect something in return. You must have heard a common phrase: Give and Take. You always

have to give things to people in return to what you take from them. Compensation refers to this

exchange, but in monetary terms. Compensation is the employer's feedback for an employee's

work. It simply is the monetary value you would give to your four employees in return of their

services.

Gary Dessler in his book Human Resource Management defines compensation in these words

"Employee compensation refers to all forms of pay going to employees and arising from their

employment." The phrase 'all forms of pay' in the definition does not include non-financial

benefits, but all the direct and indirect financial compensations.

Compensation is the HRM activity that deals with every type of reward that individuals receive

for performing organizational tasks. It is basically an exchange relationship. Employees

exchange their labour for financial and non-financial rewards. Financial compensation is both

31
direct and indirect. Direct financial compensation consists of the pay an employee receives in the

form of wages, salary, bonuses, and commissions. Indirect financial compensation (also called

“benefits”) consists of all the rewards that are not included in direct compensation, such as

vacation time and insurance coverage.

From the employees’ perspective, pay is a necessity in life. The compensation received from

work is one of the chief reasons people seek employment. Pay is the means by which they

provide for their own and their families’ needs. For some people, compensation may be the only

(or certainly a major) reason why they work. Others find compensation a contributing factor to

their efforts. But pay can do more than provide for employees’ psychological needs. It can also

indicate their value to the organization.

Compensation Policy has the objective to establish and maintain a compensation program that

will:

• Attract and retain qualified employees at all levels of responsibility who perform in a manner

that permits the College to achieve its objectives and goals;

• Reflect the relative value of jobs;

• Be externally competitive and internally consistent and fair;

• Provide the flexibility (based upon availability of funds) toward employees on the basis of

individual performance and contribution to the achievement of college goals;

• Foster good employee understanding and relationships; and

• Comply with all Board of Regents, State, and Federal Laws and regulations.

Traditionally, the focus of compensation management has been primarily on enabling an

organization to recruit and retain employees while complying with legal and statutory

32
requirements. Pay was primarily related to status and hierarchical position. It is now being

viewed increasingly as the key to acquire a competitive advantage.

Innovations in compensation are considered necessary to do more with less by reducing labour

cost per unit of output, motivating employees to higher performance, providing an impetus to

skill development and higher quality and so on.

Some Basic principles

1. There general level of wages and salaries should be reasonably in line with that

prevailing in the market. The labour market criterion is most commonly used.

2. There should be definite plan to ensure that differences in pay for jobs are based upon

variations in job requirements, such as skill effort, responsibility or job or working

conditions, and mental and physical requirements.

3. The plan should carefully distinguish between jobs and employees. A job carries a

certain wage rate, and a person is assigned to fill it at that rate. Exceptions sometimes

occur in very high-level jobs in which job-holder may make the job large or small,

depending upon his ability and contributions.

4. Equal pay for equal work, i.e., if two jobs have equal difficulty requirements, the pay

should be the same, regardless of who fills them.

5. An equitable practice should be adopted for the recognition of individual differences in

ability and contribution.

33
 6. There should be a clearly established procedure for hearing and adjusting wage

complains.

7. The wage should be sufficient to ensure for the worker and his family reasonable

standard of living.

8. Prompt and correct payments of the dues of the employees must be ensured and arrears

of payment should not accumulate.

BENEFITS:

Employees today are not willing to work only for the cash alone, they expect 'extra'. This extra is

known as employee benefits. Also known as fringe benefits, Employee benefits are non-financial

form of compensation offered in addition to cash salary to enrich workers’ lives.

What benefits would you offer to your employees at my Wear? Off course, you would offer

different benefits to the salespersons and the receptionist. Problem will arise when you begin to

decide what benefit to give to whom and on which basis? Employee benefits are not

performance-based, they are membership-based. Workers receive benefits regardless of their

performances. Employee benefits as a whole have no direct affect on employee performance,

however, inadequate benefits do contribute to low satisfaction level and increase absenteeism

and turnover in employees (DeCenzo and Robbins; 2007). So you would have to carefully design

your benefit package. Your package may include a cell phone to each worker, taking them to a

training workshop or seminar, giving them a day or two off every month and so on. While

deciding on the benefits package, do consider the associated costs.

Employee compensation and benefits are basically divided into four categories:

34
1. Guaranteed pay – monetary (cash) reward paid by an employer to an employee based on

employee/employer relations. The most common form of guaranteed pay is the basic salary.

2. Variable pay – monetary (cash) reward paid by an employer to an employee that is contingent

on dCaparoretion, performance or results achieved. The most common forms are bonuses and

sales incentives.

3. Benefits – programs an employer uses to supplement employees’ compensation, such as paid

time off, medical insurance, company car, and more.

4. Equity-based compensation – a plan using the employer’s share as compensation. The most

common examples are stock options.

Guaranteed pay

Guaranteed pay is a monetary (cash) reward.

The basic element of the guaranteed pay is the base salary, paid based on an hourly, daily,

weekly, bi-weekly or a monthly rate. The base salary is typically used by employees for ongoing

consumption. Many countries dictate the minimum base salary defining a minimum wage.

Individual skills and level of experience of employees leave room for differentiation of income-

levels within the job-based pay structure.

In addition to base salary, there are other pay elements which are paid based solely on

employee/employer relations, such salary and seniority allowance.

35
Variable pay

Variable pay is a monetary (cash) reward that is contingent on dCaparoretion, performance or

results achieved. There are different types of variable pay plans, such as bonus schemes, sales

incentives (commission), overtime pay, and more.

An example where this type of compensation plan is prevalent is the real estate industry and real

estate agents. A common variable pay plan might be the sales person receives 50% of every

dollar they bring in up to a level of revenue at which they then bump up to 85% for every dollar

they bring in going forward. Typically, this type of plan is based on an annual period of time

requiring a "resetting" each year back to the starting point of 50%. Sometimes this type of plan is

administered so that the sales person never resets and never falls down to a lower level. It also

includes Performance Linked Incentive which is variable and may range from 130% to 0% as per

performance of the individual as per his KRA.

Benefits

There is a wide variety of employee benefits, such as paid time-off, insurances (life insurance,

medical/dental insurance, and work disability insurance), pension plan, company car, and more.

A benefit plan is designed to address a specific need and is often provided not in the form of

cash.

Many countries dictate different minimum benefits, such as minimum paid time-off, employer’s

pension contribution, sick pay, and many more.

36
Equity-based compensation

Equity based compensation is an employer compensation plan using the employer’s shares as

employee compensation. The most common form is stock options, yet employers use additional

vehicles such as restricted stock, restricted stock units (RSU), employee stock purchase plan

(ESPP), and stock appreciation rights (SAR).

The classic objectives of equity based compensation plans are retention, attraction of new hires

and aligning employees’ and shareholders’ interests.

Organizational place

In most companies, compensation & benefits (C&B) is a sub-function of the human-resources

function.

HR organizations in big companies are typically divided into three: HR business partners

(HRBPs), HR centers of excellence, and HR shared services. C&B is an HR center of excellence,

like staffing and organizational development (OD).

Main influencers

Employee compensation and benefits main influencers can be divided into two: internal

(company) and external influencers.

The most important internal influencers are the business objectives, labor unions, internal equity

(the idea of compensating employees in similar jobs and similar performance in a similar way),

organizational culture and organizational structure.

37
The most important external influencers are the state of the economy, inflation, unemployment

rate, the relevant labor market, labor law, tax law, and the relevant industry habits and trends.

Bonus plans

Bonus plans are variable pay plans. They have three classic objectives:

1. Adjust labor cost to financial results – the basic idea is to create a bonus plan where the

company is paying more bonuses in ‘good times’ and less (or no) bonuses in ‘bad times’. By

having bonus plan budget adjusted according to financial results, the company’s labor cost is

automatically reduced when the company isn’t doing so well, while good company performance

drives higher bonuses to employees.

2. Drive employee performance – the basic idea is that if an employee knows that his/her bonus

depend on the occurrence of a specific event (or paid according to performance, or if a certain

goal is achieved), then the employee will do whatever he/she can to secure this event (or improve

their performance, or achieve the desired goal). In other words, the bonus is creating an incentive

to improve business performance (as defined through the bonus plan).

3. Employee retention – retention is not a primary objective of bonus plans, yet bonuses are

thought to bring value with employee retention as well, for three reasons: a) a well designed

bonus plan is paying more money to better performers; a competitor offering a competing job-

offer to these top performers is likely to face a higher hurdle, given that these employees are

already paid higher due to the bonus plan. b) if the bonus is paid annually, employee is less

inclined to leave the company before bonus payout; often the reason for leaving (e.g. dispute

with the manager, competing job offer) 'goes away' by the time the bonus is paid. the bonus plan

38
'buy' more time for the company to retain the employee. c) employees paid more are more

satisfied with their job (all other things being equal) thus less inclined to leave their employer.

The concept saying bonus plans can improve employee performance is based on the work of

Frederic Skinner, perhaps the most influential psychologist of the 20th century. Using the

concept of Operant Conditioning, Skinner claimed that an organism (animal, human being) is

shaping his/her voluntary behavior based on its extrinsic environmental consequences – i.e.

reinforcement or punishment.

This concept captured the heart of many, and indeed most bonus plans nowadays are designed

according to it, yet since the late 1940s a growing body of empirical evidence suggested that

these if-then rewards do not work in a variety of settings common to the modern workplace.

Research even suggested that these type of bonus plans have the potential of damaging employee

performance.

39
ADVANTAGES OF COMPENSATION & BENEFITS

Advantages to Your Boutique:

A well designed compensation and benefits plan helps to attract, motivate and retain talent in

your firm (which is myWear). A well designed compensation & benefits plan will benefit your

boutique in the following ways.

1. Job satisfaction: Your employees would be happy with their jobs and would love to work for

you if they get fair rewards in exchange of their services.

2. Motivation: We all have different kinds of needs. Some of us want money so they work for

the company which gives them higher pay. Some value achievement more than money, they

would associate themselves with firms which offer greater chances of promotion, learning and

development. A compensation plan that hits workers’ needs is more likely to motivate them to

act in the desired way.

3. Low Absenteeism: Why would anyone want to skip the day and watch not-so-favorite TV

program at home, if they enjoy the office environment and are happy with their salaries and get

what they need and want?

4. Low Turnover: Would your employees want to work for any other boutique if you offer them

fair rewards. Rewards which they thought they deserved?

Advantage to Your Employees:

1. Peace of Mind: your offering of several types of insurances to your workers relieves them

from certain fears. Your workers as a result now work with relaxed mind.

40
2. Increases self-confidence: Every human being wants his/her efforts to get acknowledgment.

Employees gain more and more confidence in them and in their abilities if they receive just

rewards. As a result, their performance level shoot up.

Factors affecting wages or compensation or determinants of wages or compensation:

1) Productivity of workers: to get the best results from the employees and to increase the

productivity compensation has to be productivity based.

2) Ability to pay: it depends upon the employer’s ability to pay wages to the workers. This

depends upon the profitability of the firm. If the firm is marginal and can’t afford to pay higher

than the competitors then the employees will go to other firms while if the company is successful

then they can easily pay their employees as they wish.

3) Government: government has also fixed the rules for protecting the interest of the employees.

The organizations are liable to pay as per the government instructions. Wages can not be fixed

below the level prescribed by the government.

4) Labor union: labor union also helps in paying better wages to the workers. Higher wages

have to be paid by the firm to its workers under the pressure of the trade unions.

5) Cost of living: wages depends upon the cost of living if it is high wages will also hike.

6) Demand and supply of labor: it is one of the important factors affecting wages. If the

demand of labor is more they will be paid high wages otherwise vice versa. If the supply of the

employees is more than they will be paid less and vice versa.

41
7) Prevailing wage rate: wages also depends upon the prevailing wage rate as the organizations

have to pay accordingly to keep the employees with them.

42
OBJECTIVES OF THE STUDY:
1. To find out employee satisfaction with salary and benefits of employees of

caparo so that caparo can improve its services.

2. To find out and analyze the future expectations and opinion about the

present services rendered by caparo.

3. To attain basic information on the basis of which caparo can give suggestions

and recommendations

43
 REVIEW OF LITERATURE

INTRODUCTION:
HRO is an integral part of the BPO industry and its scope is rapidly evolving to include areas

such as payroll, benefits administration, training, recruiting, performance management,

compensation management and so on. Employees typically get support through the Web, mail,

phone and a limited amount of face-to-face interactions. Different authors have defined

employee satisfaction with business outsourcing differently.

“Human Resource Outsourcing (HRO) is the process of transferring elements of a

company’s HRM functions or activities to a provider outside of the company itself. HRO is

not new. For example, organizations typically engage law firms for advice regarding HR

legislation.

EVIDENCE SUPPORTING TO THIS STUDIES:

Bob (2011) Compensation processes are based on Compensation Philosophies and strategies and

contain arrangement in the shape of Policies and strategies, guiding principles, structures and

procedures which are devised and managed to provide and maintain appropriate types and levels

of pay, benefits and other forms of compensation.1

Bob (2011) This constitutes measuring job values, designing and maintaining pay structures,

paying for performance, competence and skill, and providing employee benefits. However,

compensation management is not just about money. It is also concerned with that non-financial

compensation which provides intrinsic or extrinsic motivation.2

44
Anyebe (2003) This work however is limited to financial compensation in Anambra State Civil

Service as a recent study has shown that pay is the driving force for seeking employment in the

Civil Service.3

Armstrong (2005) stated that compensation management is an integral part of human resources

management approach to productivity improvement in the organization. It deals with the design,

implementation and maintenance of compensation system that are geared to the improvement of

organizational, team and individual performance.4

Pearce (2010) Compensation implies having a compensation structure in which the employees

who perform better are paid more than the average performing employees.5

Armstrong (2005) Compensation Management is concerned with the formulation and

implementation of strategies and Policies that aim to compensate people fairly, equitably and

consistently in accordance with their value to the organization.6

Anyebe (2003) The task in compensation administration is to develop policies and the terms of

attracting, satisfying, retaining and perhaps motivating employees.7

Anambra State Civil Service (1991) which the researchers examined originated from the

Eastern Nigeria Government and the old Anambra State. The creation of this state led to the set

up of the Anambra State Civil Service. Employing the tenets of traditional public administration,

the state civil service was an instrument of the government authorities as well as an impartial

interpreter and implementer of the policies and programmes of the State Government.8

The concept of employee satisfaction has been a focus for research and practice for the last two

decades in particular (Greasley, et. al., 2005) and considered to be a critical issue for

45
organizational performance. A number of scholars and management “gurus” stressed the

importance of employee satisfaction and its influences on organizational performance as much as

customer satisfaction (Chen, et. al., 2006).

The concept of employee satisfaction is a multi-dimensional and inter dCaparoiplinary term that

has been attracted the attention of researchers and practitioners from different dCaparoiplines

such as psychology, human resource management, organizational behavior, TQM and so fort. In

literature there are a large number of studies that analyze the term from many different

perspectives and its relationship with various organizational variables (Lund, 2003). However

there is no universal definition of employee satisfaction that exposes all these dimensions at the

same time (Bernal, et. al, 2005). Most of the definitions emphasize the importance of

employees’ job-related perceptions that link the expectations of them and what they receive in

return. Some researchers focus on the overall job satisfaction or even life satisfaction of

employees (Judge, et. al, 2005)

Locke, et. Al (1969) describes job satisfaction a pleasurable or positive emotional state resulting

from the appraisal of one's job and job experiences. According to this, employee satisfaction is a

“function of the perceived relationship between what one wants from one’s job and what one

perceives it as offering”

Judge, et. al, (1993), on the other hand, mentions that employee satisfaction is positively

correlated with motivation, job involvement, organizational citizenship behavior, organizational

commitment, life satisfaction, mental health, and job performance, and negatively related to

absenteeism, turnover, and perceived stress and identify it as the degree to which a person feels

satisfied by his/her job.

46
Cranny, et. al, (1992), suggests that employee satisfaction encompasses a lot of different facets.

Hence overall employee satisfaction describes a person’s overall affective reaction to the set of

work and work-related factors whereas the facets of job satisfaction involve workers’ feelings

toward different dimensions of the work and work environment.

In contrast, Rousseau (1978) identified three components of employee satisfaction: they are

characteristics of the organization, job task factors, and personal characteristics.

Hagihara, et. al, 1998 According to Rousseau’s identification the characterization of the

organization and the job task factors can be regarded as work factors in job satisfaction, while

personal characteristics can be regarded as non-work factors of job satisfaction (). Human

Resource Management (HRM) literature underlines the importance of employee satisfaction as

well.

Edgar and Geare, 2005 The relationship between “appropriate” HRM practices and positive

employee attitudes including employee satisfaction, loyalty and productivity have been widely

analyzed.

Silvestro, 2002 It is also suggested that treating employees as a valuable asset improves their

commitment and loyalty which leads to higher performance and quality.

Cranny, Smith & Stone 1992 These studies follow the assumption that when a certain set of job

conditions are present a certain level of job satisfaction will follow. The Hawthorne Studies are

considered to be the most important investigation of the human dimensions of industrial relations

in the early 20th century. They were done at the Bell Telephone WesternElectric manufacturing

plant in Chicago beginning in 1924 through the early years of the Depression. The Hawthorne

plant created an Industrial Research Division in the early 1920’s.

47
Brannigan & Zwerman 2001 Simply stated when people realize that their behavior is being

watched they change how they act. The development of the Hawthorne studies also denotes the

beginning of applied psychology, as we know it today. These early studies mark the birth of

research on job satisfaction relating to ergonomics, design and productivity.

Gregson, 1991 This measure basis itself on five facets of job satisfaction. The first facet is the

work itself, satisfaction with work itself is measured in terms of the core job characteristics such

as autonomy, skill variety, feedback, task identity, and task significance.

Hackman & Oldham, 1975 Supervision, the second facet, is measured in such ways as how

supervisors provide feedback, assess employees performance ratings, and delegate work

assignments. Coworkers, the third facet, are measured in terms of social support, networking,

and possible benefits attached to those relationships.

Cranny, Smith & Stone, 1992 Pay, the fourth facet, is an important source of satisfaction

because it provides a potential source of self-esteem as well as the generic opportunity for

anything money can buy.

Cranny, Smith & Stone, 1992 Obviously satisfaction with pay is measured primarily by current

income but also by opportunities for salary increases. Promotion is the final facet and the one

that the JDI explicitly assesses how perceptions about the future can affect job satisfaction.

Today the facets of the JDI are generally assessed by modifying the adjective checklist and using

a Likert scale on statements such as, “opportunities for advancement are plentiful”

Thompson & Blain, 1992 Another popular and highly researched measure of job satisfaction is

the Minnesota Satisfaction Questionnaire (MSQ). The MSQ can be scored for twenty facets;

48
scores from one question for each facet provide a single overall composite score. The MSQ is

commonly used in conjunction with the Minnesota Importance Questionnaire (MIQ). “These

instruments were designed for use with adult career counseling clients with work experience.

They are particularly useful for clients that might be called “career changers,” that is, adults with

considerable work experience in one or more chosen occupations who are dissatisfied with their

work and remain undecided about their career future”

Yankelovich Partners, 1998 p.42 A study conducted in Europe, Asia, Africa, and the Americas

reported similarities among workers. “10,339 workers were surveyed across 10 European

countries, Russia, Japan, and the United States. Researchers consistently identified the same top

five key attributes in a job: ability to balance work and personal life, work that is truly enjoyable,

security for the future, good pay or salary and enjoyable co-workers. Across the four major

geographic regions studied, workers specifically emphasized the importance of potential

advancement and the opportunity to build skills as a way to maintain employability and job

security.

Cardona, 1996, p.9 A survey polling members of the Association for Investment Management

and Research found that 81% of the managers said they were satisfied or very satisfied with their

job. When asked to identify the factors that create positive feelings about their job, most

managers named professional achievement, personal or professional growth, the work itself and

their degree of responsibility more important than compensation. Factors they viewed as

creating negative feelings about their jobs were company policies, administration, relationships

with supervisors, compensation and the negative impact of work on their personal lives.

49
Maurice, 1998, p.13 In order to decrease some of these negative feelings and increase

productivity it has been proposed to reduce the number of work days employees miss by

increasing job satisfaction, redesigning disability plans and involving supervisors in

management.

Walker, 1998, p.18 Employers interested in remaining competitive in today’s world economy

needs to concentrate on retaining quality employees. “Rewarding employees for work well done

increases satisfaction and productivity”

Metzler, 1998, p.37-42 Simple practices like this can aid the atmosphere of the work

environment. “Giving recognition and rewards outside the paycheck such as recognizing key

employees by name may also help”

McDonald & Hutcheson, 1999, p.18 Other research indicates that customer satisfaction and

loyalty are excellent predictors of profitability…the strongest predictors of customer satisfaction:

employees’ general satisfaction with their jobs and employees’ satisfaction with their work/life

balance”

Osipow, 1968 Again its important to note that job satisfaction is subject to change. “Results of

studies comparing differences between age groups and level of job satisfaction report an

increases in job satisfaction with age”

Karl & Sutton, 1998, p.515 “From an employee’s standpoint, job satisfaction is a desirable

outcome in itself. From a managerial or organizational effectiveness standpoint, job satisfaction

is important due to its impact on absenteeism (1) turnover, (2) and pro-social “citizenship”

behaviors such as helping coworkers, helping customers, and being more cooperative. (3) Thus,

50
to redesign jobs, reward systems, and human resource management policies that will result in

optimum job satisfaction and productivity, managers need to know what employees value”

Wiggins & Bowman, 2000 The nine domains, ranked in order of importance, are cost/finance,

leadership, professional staff interactions, healthcare delivery concepts, accessibility, ethics,

quality/risk management, technology, and marketing.

Wagner & Rush, 2000 Another study focusing on organizational citizenship behaviors (OCB)

analyzing peer ratings of altruistic OCB in a sample of 96 U.S. nurses showed that the contextual

variables of job satisfaction, organizational commitment, and trust in management were pertinent

for the participants

Williams & Anderson, 1991 “OCB researchers have investigated context-relevant attitudes

such as job satisfaction, pay satisfaction, trust in management and peers, and organizational

commitment as antecedents of OCB in U.S. populations”

51
 RESEARCH METHODOLOGY
NEED OF STUDY:
1. The study is done to find out whether the services provided by Caparo are

contributing to the satisfaction level of employees.

2. Caparo required new and updated information about it’s employees to

design future services.

3. Caparo wanted to know the view of employees towards various factors

associated with the salary and other benefits .

RESEARCH METHADOLOGY:
Research Methodology is way to systematically solve the research problem. It guides the

researcher to do the search scientifically. It contains of different steps that are generally adopted

by a researcher to study his research problem along with the logic behind him. Data become

information only when a proper methodology is adopted. The research methodology includes the

logic behind the methods we use in the content of our research study.

DATA COLLECTION METHOD

There are two types of data that are:

1. Primary data

2. Secondary data

(1) Primary data collection:

52
Primary data is the data collected for the first time through field survey. The primary data was

collected through an administered questionnaire. The questionnaire consisted of a variety of

questions that lay consistent with the objective of the research.

Source of primary data:

1. Experimentation

2. Observation

3. Questionnaire schedule

(2) Secondary data collection:

The websites of the service providers and various other researchers done in this
area along with the websites. Besides this the availability of documents, files, notes
and brochures served by the CAPARO served as an additional secondary data for
this project.

SURVEY METHOD:

One of the most commonly used primary data collection methods is used in the
survey. With a survey we can gather wide range of valuable information.

SOURCES OF DATA:

The data regarding employee satisfaction been collected through questionnaire

method of primary source.

SAMPLING:

Primary data can also be collected with the help of sampling method. Sampling is
not something which is only followed in statistics, is used in everyday life.
Sampling as a method is also used in a research.

Sampling methods:

1. Random or probability sampling ( convenient random sampling)

2. Non random or non probability sampling

53
Sampling population:

The caparo Ludhiana is having more than 50 employees and the questionnaire was
given to the workers and employees of the company.

Sample size:

Out of more than 50 workers and employees of caparo have successfully

completed 50 samples i.e 50 workers and employees of the company has conveyed
us the level of employee satisfaction obtained from the company.

54
 DATA ANAYSIS AND INTERPRETATION

TABLE 4.1.1
1. Since how many years have you been working in this company?
S. No Criteria No. of respondent Percentage
1. Below 1 year 17 34%
2. 1 – 2 year 23 46%
3. 2- 3 years 7 14%
4. More than 3 years 3 6%
Total 50 100%

Chart:

no. of respondents
25

20

15 no. of respondents

10

0
below 1 year 1-2 years 2-3 years more than 3 years

INFERENCE: Out of sample of 50, 34% is below 1 year, 46% 1-2 year, 14% 2-3
year, 6% more than 3 Years.

TABLE 4.1.2

55
2. Is this your first job?

S. No Criteria No. of respondent Percentage

1. yes 22 44%
2. no 28 56%

CHART 4.1.2:

Chart:

no. of respondents

yes
no

INFERENCE: Out of 50 employees 22% are freshers.

56
TABLE 4.1.3
3. I am paid fairly for the work I do?

S. No Criteria No. of respondent Percentage

1. Strongly agree 10 20%
2. Agree 18 36%
3. Neither agree nor 10 20%
disagree
4. Disagree 7 14%
5. Strongly disagree 5 10 %
Total 50 100%

CHART 4.1.3
Chart:

no. of respondents

strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16 18 20

INFERENCE: Out of 50 employees 20% strongly agree, 36% agree, 20% neither
agree nor disagree, 14% disagree, 10% strongly disagree.

57
TABLE 4.1.4
4. My salary and benefits are comparable with similar jobs I might
find elsewhere.
S. No Criteria No. of respondent Percentage
1. Strongly agree 10 20%
2. Agree 11 22%
3. Neither agree nor 15 30%
disagree
4. Disagree 5 10%
5. Strongly disagree 9 18%
Total 50 100%

CHART 4.1.4
Chart:

no. of respondents

strongly disagree

disagree
no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16

INFERENCE: Out of 50 employees 20% strongly agree, 22% agree

30% neither agree nor disagree, 10% disagree and 18% strongly disagree.

58
TABLE 4.1.5
5. i am satisfied with my benefit plan
S. No Criteria No. of respondent Percentage
1. Strongly agree 23 46%
2. Agree 10 20%
3. Neither agree nor 00 0%
disagree
4. Disagree 11 22%
5. Strongly disagree 06 12%
Total 50 100%

CHART 4.1.5
Chart:

no. of respondents

strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 5 10 15 20 25

INFERENCE: Out of 50 employees 46% strongly agree, 20% agree, 22%

disagree, 12% are strongly disagree.

TABLE 4.1.6
59
6. Favoritism is not an issue in benefits, raises or promotions.
S. No Criteria No. of respondent Percentage
1. Strongly agree 15 30%
2. Agree 15 30%
3. Neither agree nor 3 6%
disagree
4. Disagree 10 20%
5. Strongly disagree 2 4%
Total 100%

CHART 4.1.6
Chart:

no. of respondents

srongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16

INFERENCE: Out of 50 employees 30% strongly agree, 30% are agree, 6% are
neither agree nor disagree, 20% are disagree, 4% are strongly disagree.

60
TABLE 4.1.7
7. My job performance and contribution affects compensation I
receive.
S. No Criteria No. of respondent Percentage
1. Strongly agree 35 70%
2. Agree 10 20%
3. Neither agree nor 0 0%
disagree
4. Disagree 5 10%
5. Strongly disagree 0 0%
Total 100%

CHART 4.1.7
Chart:

no. of respondents
strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 5 10 15 20 25 30 35 40

INFERENCE: Out of 50 employees 70% are strongly agree, 20% are agree, 10%
are disagree.

61
TABLE 4.1.8
8. I receive my salary, bonus and other benefits on time.
S. No Criteria No. of respondent Percentage
1. Strongly agree 28 56%
2. Agree 12 24%
3. Neither agree nor 1 2%
disagree
4. Disagree 9 18%
5. Strongly disagree 0 0%
Total 50 100%

CHART 4.1.8
Chart:

no. of respondents

strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 5 10 15 20 25 30

INFERENCE: Out of 50 employees 56% are strongly agree, 24% agree, 2%

neither agree nor disagree , 18% disagree.

62
TABLE 4.1.9
9. I can ask for the details of my monthly salary or calculation for
other benefits.
S. No Criteria No. of respondent Percentage
1. Strongly agree 5 10%
2. Agree 12 24%
3. Neither agree nor 3 6%
disagree
4. Disagree 19 38%
5. Strongly disagree 11 22%
Total 50 100%

CHART 4.1.9
Chart:

no. of respondents

strongly disagree

disagree
no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16 18 20

INFERENCE: Out of 50 employees 10% are strongly agree, 24% agree, 6%

neither agree nor disagree , 38% disagree and 22% strongly disagree.

63
TABLE 4.1.10
10. I am given increment after a fair time interval.
S. No Criteria No. of respondent Percentage
1. Strongly agree 8 16%
2. Agree 15 30%
3. Neither agree nor 9 18%
disagree
4. Disagree 12 24%
5. Strongly disagree 6 12%
Total 50 100%

CHART 4.1.10
Chart:

no. of respomdents

strongly disagree

disagree

no. of respomdents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16

INFERENCE: Out of 50 employees 16% are strongly agree, 30% agree, 18%
neither agree nor disagree , 24% disagree and 12% strongly disagree.

64
TABLE 4.1.11
11. Company gives me bonus whenever it have enough money.
S. No Criteria No. of respondent Percentage
1. Strongly agree 5 10%
2. Agree 9 18%
3. Neither agree nor 12 24%
disagree
4. Disagree 18 36%
5. Strongly disagree 6 12%
Total 50 100%

CHART 4.1.11
Chart:

no. of respondents

strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16 18

INFERENCE: Out of 50 employees 10% are strongly agree, 18% agree, 24%
neither agree nor disagree , 36% disagree and 12% strongly disagree.

65
TABLE 4.1.12
12. I never had any problem with the amount of salary and bonus I
received.
S. No Criteria No. of respondent Percentage
1. Strongly agree 4 8%
2. Agree 14 28%
3. Neither agree nor 7 14%
disagree
4. Disagree 18 36%
5. Strongly disagree 7 14%
Total 50 100%

CHART 4.1.12
Chart:

no. of respondents
strongly disagree

disagree

no. of respondents
neither agree nor disagree

agree

strongly agree

0 2 4 6 8 10 12 14 16 18 20

INFERENCE: Out of 50 employees 8% are strongly agree, 28% agree, 14%

neither agree nor disagree , 36% disagree and 14% strongly disagree.

66
 ANALYSIS USING STATISTICAL TOOL
FINDING WEIGHTED AVERAGE OF THE STATED DATA:

S.no. Variables \ Weights 5 4 3 2 1 Weighted

average
1 How many years have 17 23 07 03 3.08
you been working in
this company?
2 Is this your first job? 22 28 1.44
3 I am paid fairly for the 10 18 10 07 05 3.42
work I do
4 My salary and benefits 10 11 15 05 09 3.16
are comparable with
similar jobs I might find
elsewhere.
5 i am satisfied with my 23 10 00 11 06 3.66
benefit plan
6 Favoritism is not an 15 15 03 10 02 3.32
issue in benefits, raises
or promotions.
7 My job performance 35 10 00 05 00 4.5
and contribution affects
compensation I receive.
8 I receive my salary, 28 12 01 09 00 4.18
bonus and other benefits
on time.
9 I can ask for the details 05 12 03 19 11 2.62
of my monthly salary or
calculation for other
benefits.
10 I am given increment 08 15 09 12 06 3.14
after a fair time interval.
11 Company gives me 05 09 12 18 06 2.78
bonus whenever it has
enough money.
12 I never had any problem 04 14 07 18 07 2.8
with the amount of
salary and bonus I

67
 received.

WEIGHTED AVERAGE SCORE TABLE

Table showing weighted average score of the statements rated by the respondents and
their ranking accordingly.

Weighted average score is calculated as follows:

WAS = ∑f w ÷N

Where,

f = No. of respondents giving a particular rating to a statement.

w = Weights assigned to different ratings on likert scale of 5 point, where

5= strongly agree

4= agree

3= neither agree nor disagree

2= disagree

1= strongly disagree

N = Total number of respondents.

When WAS score of each statement is calculated, the statements are lying between the
following ranges:

4-5 highly agree

3-4 moderately agree

2-3 slightly agree

68
1-2 disagree

TABLE SHOWING THE RANGE OF FINDINGS

S.no. Variables Weighted Range

average
1 How many years have you 3.08 Moderately
been working in this agree
company?
2 Is this your first job? 1.44 Disagree
3 I am paid fairly for the 3.42 Moderately
work I do agree
4 My salary and benefits are 3.16 Moderately
comparable with similar agree
jobs I might find
elsewhere.
5 i am satisfied with my 3.66 Moderately
benefit plan agree
6 Favoritism is not an issue 3.32 Moderately
in benefits, raises or agree
promotions.
7 My job performance and 4.5 Highly
contribution affects agree
compensation I receive.
8 I receive my salary, bonus 4.18 Highly
and other benefits on time. agree
9 I can ask for the details of 2.62 Slightly
my monthly salary or agree
calculation for other
benefits.
10 I am given increment after 3.14 Moderately
a fair time interval. agree
11 Company gives me bonus 2.78 Slightly
whenever it has enough agree
money.
12 I never had any problem 2.8 Slightly
with the amount of salary agree
and bonus I received.

69
 FINDINGS AND SUGGESTIONS

1. The survey shows that 34% of the employees are working for this company

below 1 year, 46% of the employees are working for 1-2 year, 14%

employees are working for 2-3 years and 6% of the employees are working

for above 3 years in the company.

2. For 44% employees of the company it is their first job experience and 66%

of employees have the experience of working at some other organization.

3. The survey shows that employees are moderately agree with the statement.

20% of workers strongly agree that they are being paid fairly, 36% person

agrees, 20% are neutral, 14% disagrees and 10% strongly disagrees with this

fact. So, the majority have keeps a positive attitude.

4. According to the survey, employees are moderately agree with the

statement. 20% of employees strongly agree, 22% agree, 30% are neutral,

10% disagree and 18% strongly disagree with the fact that they are getting a

competitive salary as compared to similar organizations. This indicates that

they may move to another organization if got a chance.

70
5. Acc. to the survey we can find out that there is moderate agreement of the

employees with the statement. This means that they are not dissatisfied with

their benefit plan.

6. Acc. To survey we can find out that employees do not feel the presence of

strong favoritism as they are moderately agree to the statement that

favoritism is not an issue.

7. Employees are sure that higher performance will lead to growth.

8. Due to outsourcing of compensation management employees faces some

issues regarding acquiring salary details.

9. Employees also feel that company doesn’t give appropriate bonus all the

time.

10.They have some salary related problems which are not heard and solved.

SUGGESTION OF EMPLOYEES SATISFACTION

71
1. Employees should be aware about the fact of outsourcing by caparo.

2. There should be more communication between caparo and CAPARO.

3. Caparo must forward compensation related issues of its employees to

CAPARO.

4. CAPARO must timely address to the employee’s complaints.

5. They should be given full appreciation of work done that is by them.

6. CAPARO must suggest to caparo to increase the amount of bonus and other
benefits at reasonable intervals.

7. CAPARO must suggest Caparo to communicate to its employees various

standards and basis which will be counted while calculating benefits to put
an end to feeling of favoritism.

8. Employees can be provided with work of their own interest so that they can
perform job in an efficient manner and feel interested while doing a job.

9. Proper communication skill enhancing training should be given to

employees so that they can feel easy in communicating with different
customers in different languages.

72
10.Good personality development class should be given to the team members to
improve their knowledge.

73
 CONCLUSION
The study it can be concluded that on an average most of the employees are

satisfied with the services rendered by CAPARO. There are some minor problems

and issue which can be solved by taking certain steps one of which can be more

communication.

It can be said that, in future CAPARO should conduct timely surveys to know the

expectations of the employees. And after a detailed with its client caparo,

CAPARO should design the future benefit packages which can satisfy the interest

of both the parties.

74
 BIBLIOGRAPHY
1. Bob, N. (2011). Making employees suggestions Count, Journal of personnel
management 17; 20 -41.

2. Bob, N. (2011). Making employees suggestions Count, Journal of personnel

management 17; 20 -41.

3. Anyebe, A. (2003). The Nigerian Civil Service; Issues in structure and

operation, journal of professional administration, 5; 11-17.

4. Armstrong, M (2005). A Handbook of Human Resources management practices.

UK: Kogan page, 986 p.

5. Ejiofor P. (2010). Management in Nigeria: Theories and issues. Onitsha:

Africana- Feb publishers limited, 295.

6. Armstrong, M. and Brown, D. (2005). Relating Competences to pay: The UK

Experience, Compensation and Benefit Review, 18(2); 2905-310.

7. Brown, A. (2003). Reward strategies, Journal of personnel management, 1; 17-

29.

8. Dyer, and Schwab, P. (1991) Developing Job Evaluation, Journal of

management, 5, 10- 14.

9. Fein, B. (2001). Compensation Management Strategies, Journal of personnel

Administration, 18; 13-27.

10. Harrison, D.A and Liska, N. (2010). Promoting Regular Exercise in

Occupational Fitness Programme, Journal of Personal Psychology, 5(5); 27-45.

11. Hewitt A.(2005). Managing performance with incentive pay, Journal of

personnel Management, 7(1): 20

75
 QUESTIONNAIRE
Name: .……………………….. Gender:
……………………….
Age: …………………………. Qualification:
……………………….
Designation: …………………………. Department:
……………………….

1.How many years have you been working in this company?

Below 1 year 6 1-2 year

2-3 year Above 3 years

2. This is my first job

yes no

4. I am paid fairly for the work I do.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

4.My salary and benefits are comparable with similar jobs i might find.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

76
5.I am satisfied with my benefit plan

Strongly agree agree

Neither agree nor disagree Disagree

Strongly disagree

6.Favoritism is not an issue in benefits, raises or growth.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

7.my job performance and contribution affects compensation I receive.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

8.I receive my salary, bonus and other benefits on time.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

9.I can ask for the details of my monthly salaryand benefits.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

10.I am given an increment after a fair interval.

Strongly agree Agree

77
 Neither agree nor disagree Disagree

Strongly disagree

11.Company gives me bonus whenever it has enough money.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

12.I never had any problem with the amount of bonus and salary I receive.

Strongly agree Agree

Neither agree nor disagree Disagree

Strongly disagree

Suggestions if any to the organization to development further.

…………………………………………………………………..…. Thanking you.

78