Compensation management systems are the financial reward structure organizations uses to compensate the employees for the work they perform for the organization. Compensastion strategy consists of Reward system includes anything, that employee may value of desire and that employer is able or willing to offer in exchange of employee’s contribution. ...

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Different organizations have different compensation polices with different content. It is what gives them their competitive advantage. These are grouped under the headings of fixed and variable compensation as under: Fixed compensation: 1.    Base pay 2.    DA 3.    HRA 4.    Compensation-based pay 5.    Pay for fixed term employment 6.    Fringe b...

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An incentive is an important mechanism that encourage and motivates managers to achieve organizational objectives”. An incentives scheme is a plan or programs to motivate individual for good performance. An incentive is most frequently built on monetary rewards, but may also include a variety of non-monetary rewards or prizes. The type of incentive...

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Fringe benefits are those benefits which are provided by an employer to or for the benefit of an employee and which are not in the form of wages, salaries and time related payments. Fringe Benefits embrace a range of benefits and services that employees receive as part of their total compensation package. Benefits and services, however, are indirec...

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Statutory Benefits Compensation benefits : An employer is liable to pay compensation if personal injury is caused to a workman by accident arising out of and in the course of his employment. if a workman employed in any employment contracts any disease, specified in the Act as an occupational disease peculiar to that employment. Insurance benefits ...

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The characteristic of a compensation system Long term perspective Variable pay component Based on individual and/or team effort(=pay for performance) Goal oriented Mix of monetary and/ non monetary rewards Perspective on compensation: There are 2 types of perspective Organization’s perspective Reward for work Monetary and non monetary form Term of ...

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The various components are- Retirement plans Severance pay Life insurance Workers’ compensation Holidays Maternity leave Travel expenses Child care

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Employee benefits such as: Deferred income Loss-of-job income continuation Disability income continuation Health & accident protection Various methods for costing benefits Annual Cost - This method provides total annual cost figures for each benefit. Cost per employee per year-Simple bookkeeping procedures permit the development of annual costs per...

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Compensation is being drastically affected by the Internet. Employees now has easy access to the competitive rates commonly paid for their positions within any given geographic area. A future where employees know more than their employers about the value of their positions in the competitive marketplace is what now faces worldwide employers. Unfort...

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It is important for small business owners to understand the difference between wages and salaries. A wage is based on hours worked. Employees who receive a wage are often called "non-exempt." A salary is an amount paid for a particular job, regardless of hours worked, and these employees are called "exempt." The difference between the two is carefu...

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An important consideration for a small-business owner is whether to hire employees that are full time, part time or a combination of the two. Each comes with certain benefits and drawbacks involving such things as cost and worker commitment. The type of business you run is also a factor when determining if full-time or part-time workers are more su...

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The following principles must govern the administration of fringe benefits : Benefits and services need to be provided to the employees on the basis of a genuine interest in the protection and promotion of their well-being. The management should not feel that the fringes are trust upon  them. Nor should the management feel that they are providing t...

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Design a Remuneration Plan: Any remuneration plan must be understandable, workable and acceptable. The remuneration scheme must have two components- a base rate and the scope for increasing the base rate. The remuneration plan must be determined keeping in mind the requisites and the component. The persons responsible for determining a remuneration...

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Principles of Fringes : The following principles must govern the administration of fringe benefits: Benefits and services need to be provided to the employees on the basis of a genuine interest in the protection and promotion of their well-being. The management should not feel that the fringes are trust upon them. Nor should the management feel tha...

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Fringe benefit programs should be looked at as a worthwhile corporate instrument in HRM. Future policy planning in this area will have to keep in view some fresh reference points. Non-unionization and skills shortage are no more relevant for policy consideration. Any meaningful package of benefits must reflect some perspective planning. Inflexibili...

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The factor affecting executive compensation are as follows : Changing nature of Work: The way work is organized and managed is constantly changing. This change is triggered by technological breakthrough and the mounting pressure of global competition. The changing world of work demands new compensation practices for executives who are at helm of af...

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Executives compensation is critical to the long-term interest of shareholders and attainment of organizational goals and objectives successfully. Therefore, executives compensation must be based on certain sound principles as under: Attracting and retaining executives talents: Executives compensation policies should to able to attract and retain hi...

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Compensation satisfaction  represents an important construct to organizations and to the field of human management, because is serves as a critical mediator between an organization’s compensation policy and relevant behavioral and attitudinal outcomes, job performance, turnover and deviant behaviors have been found to be important outcomes of the e...

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