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CO4 Session 1 [Intro of Employee Compensation]

The document discusses compensation management as a systematic approach to providing monetary value to employees in exchange for their work, highlighting its significance in human resource management. It outlines the different forms of compensation, including pay, benefits, and incentives, and emphasizes the importance of internal and external equity in compensation planning. Additionally, it identifies key objectives of compensation planning such as attracting quality candidates, retaining employees, cost control, compliance with legal rules, and ensuring ease of understanding and operation.

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sreeram saipranitha
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11 views

CO4 Session 1 [Intro of Employee Compensation]

The document discusses compensation management as a systematic approach to providing monetary value to employees in exchange for their work, highlighting its significance in human resource management. It outlines the different forms of compensation, including pay, benefits, and incentives, and emphasizes the importance of internal and external equity in compensation planning. Additionally, it identifies key objectives of compensation planning such as attracting quality candidates, retaining employees, cost control, compliance with legal rules, and ensuring ease of understanding and operation.

Uploaded by

sreeram saipranitha
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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MODULE 4 |

SESSION 1

COMPENSATION
MANAGEMENT
Course ‘22BBL12C1’ | Class
‘BBA-LLB’

DR MUDIT
S
COMPENSATION

• 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.
• Compensation is one way or the other reward given to the employees by
the employer in return to their services or contribution to the organization.
• It plays a very significant role in human resource management because it
helps in attracting, retaining & motivating employees.
• Employees are provided compensation in three different forms:
 Pay: Provided in the form of periodic wage & salary.
 Benefits: Provided in the form of medical facility, insurance facility, recreational
benefits etc.
 Incentives: Provided in the form of bonuses, commissions etc. to award the good
performers.
COMPENSATION MANAGEMENT /
PLANNING
• Compensation management is an integral part of the human resources
management approach to productivity improvement in the
organization. It deals with the design, implementation and maintenance
of compensation systems that are geared to the improvement of the
organizational, team and individual performance.
• Compensation management practice consists of policies and practices
that are used by managers to reward and maximize the potential of
human resources in the organizations.
We must consider certain objectives before planning for compensation to
the employees. These are as follows:-

1> Internal and External Equity


The employees should be paid in accordance to the services delivered by them.
In internal equity, if an employee is performing a difficult or more complex task
he should be paid more in synchronization with his contribution to the
organization. The absence of internal equity can lead to discontent amongst the
employees and an unhealthy work environment.
In external equity, an employee’s job should be fairly reimbursed to similar jobs
in the market. In the absence of which the employees might leave in the hunt of
greener pastures.

OBJECTIVES OF COMPENSATION
PLANNING
2> Attract Quality Candidate
Quality candidates are in demand in every organization. In order to attract and
retain them the compensation offered by an organization needs to be high
enough to retain them. An organization should offer higher salaries which will
motivate talented candidates to apply.

3> Retain Employees


Nowadays there are ample opportunities available to the candidates in the
market hence the most challenging task of an organization is to retain its
employees. If the organization wants to retain efficient employees it should
maintain an effective level of compensation. If the level falls employees can
switch to other organizations.

OBJECTIVES OF COMPENSATION
PLANNING
4> Cost Control
A good organization always ensures that their employees are neither paid too
less nor too much. Both situations are harmful to the organization. They
should always be paid in proportion to the services provided by them. The
organization should also take care that the cost of recruiting new talents is
not too high.

5> Comply with Legal Rules


While giving the compensation to the employee’s government policies and
rules should also be kept in mind regarding minimum wage, allowances,
benefits, bonuses etc.

6> Ease to Understand and Operate


The compensation planning should be easy to understand and operate. It
should be comprehensive and clear and the employees, managers and union
should be able to refer to them with ease.
OBJECTIVES OF COMPENSATION
PLANNING
THANKING
YOU!
If you have any query, feel free to ask
me.

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