Compensation and Benefits

7/17/2019 Compensation and Benefits

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Compensation Benefts

Quns 1 Discuss the contents o job evaluation Describe the process o jobevaluation

Ans:1 Contents o job evaluation:-

Job analysis:- It is the process of examining the job content by breaking it down into its

functions, elements, tasks, operations and processes.

Job description:- It is a written and general statement that outlines the skills, education andtraining required by the potential employee to perform the particular task.

Job classification:- Jobs are grouped with respect to their worth.

Job specification;- It is a statement, which contains the qualification and characteristics of anemployee, which are required for the successful task completion.

Process of job evaluation!

1. Appointment and creation of committee:-In the first step a committee is set up which

consists of experience "# experts, employees and union members so as to evaluate all the jobs

in the organi$ation.

2. Identifying jobs that needs to be evaluated:- In the second step, the jobs in various

departments of the organi$ations need to be identified in order to find out which job requires to be evaluated

. Analysing the job description and job analysis:! %he third step in the organi$ation is toconduct job analysis and job description which is necessary for successful performance.

!. "election of job evaluation method:! %he fourth step in the evaluation of the job is to select

the method for evaluation. %his must be identified while keeping the demands of the organi$ationas well as factors related to job in mind.

&.#lassification of job and compensation:- In the fifth step, the relative worth of the jobs arearranged as per the requirement of skills, experience required, conditions under which the task isto be carried out, responsibilities to be handled, degree of supervision that is required and so on.

$. Initiating the program:- %his step is further carried out when the action plan is ready and the

top management explain this plan to their employees and finally put it into operation



'. #oncluding results:-final step in the evaluation of the job is to review and examine the jobs

periodically taking into account the environmental conditions such as technology, service,

products environmental performance skills intelligence compensation analysis etc.

%ns2 "uppose you are a &' manager and you are as(ed to develop an effective incentive

scheme for your organi)ation. *hat are the pre-re+uisites you ,ill consider ,hiledeveloping an ffective Incentive "cheme /iscuss the merits of Incentive

Ans: 0plain the pre-re+uisites for an effective incentive scheme:- (e can conclude by nowthat for all firms a well!designed system of wage payment can yield a number of advantages. )ut

it is also true that to reali$e these advantages there must be some safeguards known as pre!

requisitions of effective incentive plants

1. %he worker co!operation is mandatory in execution o*f incentive schemes. %he co!operation is

required in respect of methods adopted for analysis of result or output on basis of which payment

is done , the setting wage rate methods for different work categories and pre!requisites relating to

job security.

2. %he incentive scheme must be influenced by scientific work measurement like the standards setmust be practical and inspiring .

. +ll indirect staff like foremen, helpers, supervisors, and canteen staff charge hands etc.

!. + management commitment to oversee the outlay and schedule the proper administration pf

plans should be formed.

. +n incentive plan should be first planned properly and then implemented carefully to achieve

desired results saw mentioned .

erits of incentives:- ou will find that the principal advantage of incentives is that it induces

and motivates employees to achieve high efficie-ncy and superior output. ixed remunerationdoes not act as a motivator for workers to yield improved results rather it removes panic of

insecurity from employees/ mind Incentives result in enhancement of earnings which have helped

employees in improving their standard of living instance show that time!rated wages because ofincentives

irms can bring down their per unit as well as total cost of production using incentives as

increase in productivity will lead to a larger output for given inputs brini0ng down the total and

unit co*st of production.

%he further benefits of incentive payments are reduced command , greater equipment utili$ation,

reduction in scrap and time lost , condensed turnover and augmented output.

0ample:-%he Indian assembly line industries have been able toi achieve remarkable

enhancement in performance and also provide an option of self!financing.

%us /iscuss the types of managerial renumeration. 0plain the elements of a

managerial remuneration



Ans:1. 3ypes of managerial rumination:-1ue to financial crises in the last two decades, the

remuneration part of the managers has changed drastically which affect their compensation

structure. %hus managerial rumination comprises of two important pays which are as follows

"hort term pay:- %he short term remuneration is related to the bonuses 2short term3 and the

base pay which are usually paid to the managers according to their performance in theorgani$ation.. %his type of pay is totally cash based managerial remuneration component and

over a certain period of time these bonuses become deferred.

Long term pay:- The long term remuneration comprises of stocks which are

restricted, stock options, salary which depend on the performance against the index

and shares. These long term remuneration elements are used by the shareholders

in order to protect the organiation!s "alue as well as gaming control of the top le"el

managers on the ri#sing "alue of the $rm in the marketplace

0plain the elements of a managerial remuneration:- 4anagerial remuneration areassociated with the people who have attained top level managerial position such as directors,

Presidents, 5eneral manager, vice president etc.

1. 4ase salaries:- It is the first elements of the managerial remuneration which is analy$ed

with the help of job evaluation and also serves as incentives also. (hile evaluating the

salary, job evaluation and also serve as incentives also.

6. "pecial pac(age of per+uisites and benefits:- anagers also enjoy all kinds of benefits and perquisites which the organi$ation offer to their employees. %herefore, inorder to maximi$e the availability of time to key managers from the purpose of business

perspective, various other facilities are also offered to them such as connection ofinternet, connection of cell phone and so on.

-. 5rofit sharing bonus:- In today/s global competitive scenario, in the programmed of

executive payments, profit sharing bonus plays a very important role. %his type of bonus

is usually based on the profit sharing or performance.

7. "hort term bonus:-8u9ch type of bonuses ranges freom&*: of the base salary to ;* ormore times of the base salary are offered when firm a very good year had by recogni$ing

the finanacial indicators.

&. 6ong term performance bonus:- the payment of cash to the corporate managers issimilar to that of the short term bonuses. %he only difference you may find is in the time

period for receipt is 6 years or more into the future and the award si$e is based on the

multiyear achievement of establishment performance related objectives.



<. "toc(s options:- =ow a day many firms offer >/ stock equivalences// in the form of share

appreciation rights? phantom shares

%uns!. /efine pay structure ,hat are its objectives 0plain the major decision involved in

designing and setting competitive pay structures and setting competitive pay structure

Ans: /efinition of pay structure:- + Pay? salary structure refers to the collection of salarygrades, bands or levels , connection of related jobs within a series or hierarchy which helps the

organi$ation in the providing a framework for the implementation of various policies and reward

strategies within the organi$ation. %he pay structure in the organi$ation are quite diversdepending upon the technical knowledge and skills required , jobs, roles and external and

internal pressure of compensation. pay structure and system so as to improve the performance of

the business.

7bjectives of pay structure:- . to balance strategy of reward with the strategy of the business so

as to encourage and motivate high performance level people.

. %o bring out clarity and order between organi$ation and its people in managing career

progression as well as increase in pay.

. %o make transparency and ensure lawfulness and fairness while designing the pay structure.

ajor decisions in designing and setting competitive pay structures:- %he major decisions indesigning and setting the competitive pay structures include

;.8pecifying the competitive pay policy of the employer with the help of surveys which gives

data for converting the pay policy into pay structure, pay levels and pray mix.

6. 1efining the purpose of survey which is conducted because of the following reasons. to analy$e pay related problems and establish pay structure

. to estimate labor price of service and product market competitors and to select the marketcompetitors which are based on similar skills, same services and products as well as employees

within the similar geographical area.

-.8election of jobs in the survey with the help of two approaches

@ow! high approach which identifies lowest and highest paid benchmark jobs the salaries for

these jobs as anchors basically for the skills based structures.

7. 1esigning the survey with the help of three categories of data which are required to evaluate

the total compensations package with respect to the competitor practice

&.Provide information about the nature of the firm

. Providing information about the total pay system



. 8pecify compensation data on each incumbent in the jobs understudy.

< )alance the competitiveness with internal alignment which includes use of bands, ranges and

flat rates which offer flexibility so as to deal with pressures from external markets and difference

among firms.

%uns:. 0plain the criteria8s considered for re,arding thye employees for their good

service 0plain of the criteria8s responsible for re,arding the employees

Ans:- ;. Analy)ing and surveying of staff:- Aonducting the surveys is regarded as one of the

most critical challenge for the firms when it comes to motivate their employees. or this the firm

must deeply understand their employees. or this the firm must deeply understand theiremployees as well as their culture.

0ample:- @loyd )roking group, despite having major growth in its business, initiated its

employee survey so as to assess the unease among its staff members.

%he employees released that their managers must show. 4ore understanding

.Identify, recogni$es and reward the hard work

. Improve working environment

.Promote team spirit

. Provide fairer and clear working conditions

Bver the next four years, objectives were made to survey likes and dislikes so as to form anagenda for the action plan.

4uild up a chec(list of service +uality:- +s checklist may differ from firm to firm according totheir si$e and internal factors, today many firms are using business Cxcellence model as a

diagnostic tool. %his too helps the organi$ation in showing how the customer satisfaction is

linked to people issues.

0ample:- + financial services call centre had the following practical criteria which are as

follows

. 1emonstrated knowledge staff

. 1elivery against promise

. #esponse to their customers

. Duality and speed of resolution of issues

. %ranslating the needs and requirements of their customers into action.

. #reating a motivational environment by providing training to the managers:- 4anyservice organi$ation provide training to their managers in motivation and leadership with the

help of following five steps

. 4aking the workplace fun



. Providing the specific and copious recognition for the task which employees perform

. Bffering targeted and frequent rewards

. 4aking communication influential and credible

. #ewarding the loyalty of employees

!. 9iving positive feedbac(:- + >/ well done/ and thank you/ from managers is very influentialfor the employees than token or monetary reward.

0ample:- edCx rigorously champions managers as servicing their employees to service thecustomer

Issues achievement #ertificates:- +n achievement certificate such as token award can

become highly pri$ed when employees achieve defined standards of customer service and skillslevel.

%uos $. *rite a short note on the follo,ing

1. *ages policy plan in India:- %he plan of wages in India are explained as follows

.3he first plan 11 to 1$< :- 8uggested that pre!war levels of real wages should be restoredas an initial march towards >/ living wage// by use of enhanced productivity. In further suggested

various measures for making wage adjustment like reduction of disparities in income.

. 3he second plan 1$ to 1$1<:- 8tressed improvement in wages through increased productivity stemming from efficiency on the part of the workers, improved layout of plants and

improvement in management practice.

3he third plan 1$1 to 1$$< :- #einforced the wage policy of the preceding two plans withrespect to minimum wage fixation, reduction of disparities and wage differentials and stressed

the role of productivity in raising the living standard of the workers.

3he fourth plan 1$ to 1=!< 1id not provide a fresh direction or any shift of the government

>s wage policy.

3he fifth plan 1=! to 1=< :- recommended that the reward structure of the industrial

employees in terms of wage and non!wage benefits must be related to performance records inindustrial enterprises.

4. >oluntary retirement scheme >'"<:- Eoluntary retirement scheme E#8 is the most

common method which is used by organi$ations to reduce excess manpower. It helps the



employer not only to compete and survive in this current business scenario but also improve

his?her performance. %his scheme also becomes the prominent means of downsi$ing of

employees E#8 is also known by the names such as voluntary separation scheme.

%hough the criteria of eligibility of E#8 may differ from organi$ation to organi$ation t it is given

only to those employees who have either served ;* years of working or attained 7* year of agethus, the employees who opt for this scheme are permitted to get 7& days of benefits for each

completed year of working or monthly benefits during retirement time which is multiplied with

service months that are left before the data o*f working whichever is less.

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Compensation and Benefits