2.  INTRODUCTION
 OBJECTIVE
 COMPENSATION MANAGEMENT
 ELEMENTS IN COMPENSATION
 FACTORS AFFECTING COMPENSATION
 COMPONENTS OF COMPENSATION
 IMPORTANCE
 CONCLUSION
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3.  Compensation may be defined “as money
received in performance of work and many kinds
of benefits that an organization provides to
employees”.
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4.  To recruit and retain
qualified employees.
 To increase or maintain
morale.
 To determine basic wage
and salary.
 To reward for job
performance
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5.  Compensation systems are
designed keeping in mind
the strategic goals and
business objectives.
 Compensation system is
designed on the basis of
certain factors after
analyzing the job work
and responsibilities.
JOB
ANALYSIS
PAY
STRUCTURES
SALARY
SURVEYS
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6. JOB EVALUATION
WAGE & SALARY
BONUS & INCENTIVES
PAYROLLS
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7.  It is the process of determining the worth of one job in
relation to that of other in a company so that a fair and
equitable wage and salary system can be established.
METHODS
RANKING
POINT
METHOD
CLASSIFICATION
FACTOR
COMPARISION
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HRM

8.  Minimum wage
 Fair wage
 Living wage
Wage plan
 Time wage plan
 Piece wage plan
 Skill based pay
 Competency based pay
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9.  Is any factor(financial or non-financial) that enables or
motivates a particular course of action, or counts as a
reason for preferring one choice to the alternatives.
Short term plans:
Halsey premium plan:
Total wage=(time taken x standard rate)+bonus
Where bonus=(time saved x std rate)50%
Rowan plan:
Total wage=(time taken x std rate)+bonus
Where bonus=(time taken x time saved x std rate)/std
time.
Barth system:
Total wages=√std time x time taken x hourly rate
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10. Long term incentives
Service incentives:
 Rewards employees with years of service with the
company.
Profit sharing plans:
 Certain percentage of profits is distributed.
Stock options:
 Employee’s are given the option of purchasing the
company’s stock
Performance bonus plans:
 Rewards employees based on each employee’s
annual performance review.
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11.  Refers to the administration of employees, salaries,
wages, bonus, net pay, deductions etc.
 It consists of the employee ID,employee name,
date of joining, daily attendance record, basic
salary, allowances, overtime, bonus, commissions,
incentives, pay for holidays, vacations and
sickness, value of meals and lodging etc.
 There are some deductions such as PF, taxes, loan
instalments or advances taken by employees.
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12.  Demand and supply of
labour
 Cost of living
 Society
 Labour unions
 Compensation policy
 The org. ability to pay
 Job analysis and
description
 Employee
EXTERNAL INTERNAL
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13. COMPENSATION
MONETARY NON MONETARY
INDIRECTDIRECT
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14.  Base pay
 Bonus
 Incentives
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15.  BASE PAY : Fixed amount of money paid to an
employee by an employer in return for work
performed.
 BONUS: A sum of money added to a person's wages as
a reward for good performance.
 INCENTIVES: Inducement or supplemental reward that
serves as a motivational device for a desired action or
behaviour
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16.  Insurance(health ,
eye..)
 Leaves (sick,
holiday/personal)
 Clothes
 Company parties
 Phones/Laptops
 Retirement programs
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17.  Enhance dignity and satisfaction from work performed.
 Promote social relationship with co-workers.
 Allocate sufficient resources to perform work
assignments.
 Offer supportive leadership and management.
 Enhance physiological health, intellectual growth.
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18.  Sound compensation/reward system brings peace in the
relationship between employee and employer.
 It creates 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 organisation is able to retain the best talent by
providing them adequate compensation thereby
stopping them from switching over to other job.
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19. We can say that good
compensation can increase the
productivity of an organization
because it provides various rewards,
bonus, schemes etc. and its
compulsory for every organization.
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20.  http://www.slideshare.net/dwnload/comp
ensation-mgt?related=2
 http://www.slideshare.net/805984/compen
sation-management-16470965?related=3
 http://www.slideshare.net/saswatbarpand
a/compensation-management-17721628
 Human Resource Management by Gary
Dessler and Biju Varkkey .
 Human Resource Management in Practice
by Srinivas R. Kandula.
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21. 6/20/2015 21HRM