Total Returns for Work
PART I :OVERVIEW
• Main compensation components and structures
• Direct & Indirect • Extrinsic & Intrinsic • Statutory & Non-Statutory
MACRO-ECONOMIC COMPENSATION FACTORS
• Main areas of the Employment Act 1955, amended in 1989, 1995 and 1998
• • • • • • Contracts of Service and employment protection Payment of Wages and minimum wage levels Working hours and holidays Registers of employees Employee and Industrial Relations issues Statutory Benefits relating to Provident and Social security funds and paid leave.
Four Policy Choices (cont.)
3. Level of Employee contributions
– Directly affects employees‟ attitudes and work behaviors
4. Management Policies
– Focus - right people get the right pay for achieving the right objectives in the right way
25% 50%
• End of term examination
Part 1: Learning objectives
• To describe the main types of compensation components and structures currently in use • To address employer objectives in developing a compensation system • To list and explain the factors that influence pay decisions such as equity, transparency,national and international context. • To identify the unique features of compensation structures in the Knowledge based economy.
COMPENSATION & BENEFITS MANAGEMENT MGT 6353
Course Leader Perema Kumari Ponnampalam
Module Sections
PART I :OVERVIEW
PART 2 : MACRO-ECONOMIC COMPENSATION FACTORS PART 3: MICRO-ECONOMIC COMPENSATION CONCEPTS PART 4: MEASURING AND PAYING FOR PERFORMANCE PART 5 : STRATEGY & BENEFITS
What is Compensation?
Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship
Compensation components & structure
• Factors influencing pay decisions & rules of pay engagement
• • • • Legislation/ government policy Union influence Selection policy requirements Financial position to pay.
• Influences on individual/team pay decisions
• Seniority and job position/status • Cost of living allowances • Performance/Competency / Skill mix
Compensation components & structure
the market value
PART 2 : MACRO-ECONOMIC COMPENSATION FACTORS
• Employment Legislation
• Legislation relating to compensation & benefits - wage and labor hour laws, employee pension & welfare Laws • Other Issues
Four Policy Choices (cont.)
2. External competitiveness
– Focus – pay comparisons with competitors
– Pay is „market driven‟
– Objective:
• To ensure that pay is sufficient to attract and retain employees • To control labor costs to ensure competitive pricing of products/ services
Compensation Objectives
• Guide the design of the pay system • Serve as the standards for judging the success of the pay system
Four Policy Choices
1. Internal alignment
PART I :OVERVIEW
• Module Objectives and Learning Outcomes • Assessment Structure Discussion • Marking Criteria Guidelines
ASSESSMENT
• Assignment 1 • Work based project coursework 25% • Assignment 2 • Case Study
– Compares jobs or skill levels inside a single organization – Pertains to the pay rates both for employees doing equal work and for those doing dissimilar work – Pay relationships within an organization affect employee decisions to: • Stay with the organization • Become more flexible by investing in additional training • Seek greater responsibility
MACRO-ECONOMIC COMPENSATION FACTORS
Legislation relating to compensation & benefits
• • • • • The national minimum wage Hours of work, holidays and paid time off Equal pay for work of equal value Anti-discrimination legislation The nature of the employees benefits package including sick pay entitlement • Share ownership and profit sharing schemes • Pension schemes • Impact of anti-discrimination policies
Compensation structures in the knowledge based economy with individual customization to access talent markets
• Bargaining points of employees • Individual Customization of Compensation • New Strategies to access talent marketswhere reward packages are defined differently by different groups • Addressing the notion of internal equity associated with
Employee Compensation
• Employee Compensation - all forms of rewards to employees in return for the performance of their jobs • Rewards or Compensation Management – design policies & procedures for allocation of rewards that is fair, equitable and consistent with the value systems of the company. ( Perkins & White, 2009)