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Transcript of Emplyoeee Comensation Kavita Project
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A PROJECT
ON
Employee Compensation and Benefits atFast Track Software Pvt.Ltd
BY
Upasna Pandey
UNDER THE GUDIANCE OF
Submitted to
University of Pune
In partial fulfillment of award of recognition of
Masters of Personnel Management (MPM)
Through
Asian School of Management Pune
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ACKNOWLEDGEMENT
I take an immense pleasure in submitting this report on Employee compensation and
Benefits successfully. It helped me to check the feasibility of the theories learnt in
me academic course.
It is indeed a moment of great pleasure and immense satisfaction for me to express a
sense of profound gratitude to all those people who have in making this project an
enriching experience.
I am very thankful to the respected HOD.. and the project
guide and all the staff members who inspired me and provided
continuous help and attention during the project.
I express my sincere acknowledge to them.
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Certificate from institute
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Certificate from company
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INDEX
Chapter No. Title Page No.
Executive Summary
Company Profile
The fast track story
Strengths
Core Values
Services
Objective and scope of the study
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EXECUTIVESUMMARY
Organizations offer a wide range of traditional and nontraditional benefits. In the past,
the dilemma for organizations was how to offer the right mix of these benefits to
attract and retain top performers while also balancing increasing costs of benefits.
Today, organizations are managing these ever-increasing costs amidst the uncertainty
of the economy. Given that the benefits allocation in HR budgets is typically fixed, or
marginally flexible, it is not surprising that according to this research, employers
continue to remodel their benefits plans to give employees greater responsibility to
manage their health care costs, retirement and financial security, and leave.
This project is about the Employee Compensation and Benefits done at the Fast Track
Software Pvt. Ltd. The report includes a brief overview, objective of the study and
then the importance of the study has been elaborated. This report further contains the
research methods, data collection process and the analysis and interpretation of the
data. The report has been concluded with findings, conclusions and recommendations.
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On a personal note this project was a great learning experience as far as compensation
and benefits of the employees is concerned.
COMPANY PROFILE
The Fast Track Story
Fast Track was started in 1999 by its President, Brian Conte, a quintessential
entrepreneur and world-class software engineer who came out of the Windows OS
group. Brian has a demonstrated ability to start small, work smart, and make real
money in a tough landscape.
A graduate of Princeton University, Conte was among the early employees of
Microsoft. He managed the development of Microsoft's first browser and was the
architect and developer of the early Microsoft Multimedia Browser and lead
developer for Windows and OS/2 hardware adaptations.
Conte also served as a senior software engineer for Microsoft for four years. Fast
Track's founder, Brian Conte, was one of the original developers of Windows at
Microsoft, and has since managed the development of over 50 product releases. His
products have been used by millions of people and have won numerous awards,
including Product of the Year twice.
As Founder & CEO of HDC/Express Systems from 1987 to 1996, Conte invented a
number of award-winning products, including Power Launcher, the inspiration for
Windows' Start Menu. In the face of a contracting and consolidating marketplace for
such utilities, Conte grew the renamed business (Express Systems) again into a leader
in its field and successfully negotiated its purchase by WRQ.
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When the company changed hands, Conte remained with WRQ as CTO from 1996 to
1999. Brian spearheaded the development of one of WRQ's most successful
products, Express 2000, which generated more than $10 million in its first year.
Conte supervised a team of 35 developers and was the chief inventor of two U.S.
patents.
In 2002, Fast Track opened a development office in India called Fast Track Software
Services Pvt. Ltd. The India office has grown from 3 to 60 people.
In 2003, Fast Track began working with Microsoft on a number of projects, including
Imagine Cup and Dream Spark, two of Microsofts largest and best known student
programs. At this time, the Fast Track team became a preferred Microsoft vendor.
In 2006, Conte designed and developed Fast Track's Home Automation product line,
which won Electronic House's 2006 "Best Home of the Year" award in its debut year
and was featured on the Discovery Channel and the Oprah Winfrey show.
Most recently, Fast Track opened a sales and support office in Cebu, Philippines in
January, 2012. The office currently employs seven people. In November 2012, Fast
Track shipped its first product, Power Site, a web site builder for small businesses and
designers. Also in 2012, Fast Track became a Microsoft Gold Partner, the highest
partnership level that can be achieved with Microsoft. The company currently
employs 75 people across four offices.
Fast Track: Fast, Innovative, Smart, Proven, Professional
Fast Track creates cutting edge websites and web applications for businesses of all
sizes faster and better than anyone else in the business. We are a recognized,
innovative expert in the development of Microsoft technology applications and one of
leading developers of mobile, tablet and web applications utilizing .NET technology.
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Our unique background in allows us to deliver high quality results in a cost effective
way to increase your competitive advantage.
Our solutions range from a very simple website to large, complex applications that
operate high traffic environments. And, we offer a complete range of development
services - from business analysis, software design and prototyping to software
development, QA services, post-project maintenance and support.
Our goal is to accelerate your internet business success by providing you with the
fastest, most technically advanced web tools in the business. We offer you a
professional, knowledgeable team expertly skilled in the latest internet technologies.
When you work with us, youll access a full package of internet services, including
design, development, marketing, technical support and hosting. We deliver
exceptional customer value through high quality services, constant innovation and
creative solutions.
At Fast Track, we produce user-friendly websites and applications tailored to your
business needs. Our solutions focus on increasing your online presence and revenue.
With over 100 years of combined IT experience, weve worked with all types of
clients---from startups to large corporations, nonprofit organizations to small
companies and everything in between. We take the time to understand your
particular needs and deliver real solutions that are intelligent and seamless.
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Our Strengths
From the start, weve specialized in Microsoft technology. Weve created major
websites and applications for Microsoft. We excel in being faster, more streamlined
and more economical than our competition.
Core Values
Innovative
Knowledgeable
Expert
Efficient
Helpful
Useful
Passionate
Genuine
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Fast Track provides a full range of web and application services:
Web Design and Development
Custom Websites
Web Application Development
Content Management Systems
Ecommerce Websites
Enterprise Portal Development
Third-party integration
Custom Software Development
Open source application
Customization
Software QA Consulting
Full Lifecycle Process Improvement
QA Process Consulting
Test Strategy Elaboration and Management
Search Engine Optimization
Website Review and Analysis
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Website Optimization
SEO Plan Deliverables
Enterprise Mobility Solutions
Application Maintenance
Mobile Web Development
By platform for IOS, Android,
Windows and Blackberry
Offshore Software Development
Software Outsourcing
Custom Software Development
Software Migration
Software Testing
Dedicated Software Development Teams
Quality Assurance
Accessibility Testing
Compatibility Testing
Performance Testing
Installation/Configuration Testing
System/Integration Testing
Security Testing
Internationalization/Localization Testing
Project Assessments
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Code Evaluations
Solutions
Microsoft .NET
Windows Azure
Custom CMS
HTML 5
Windows Phone
Entity Framework
Linq
CSS 3
CSP/MSCOM
Microsoft SQL Server
Microsoft Silverlight
Microsoft Project Sharepoint
Microsoft Project
Verticals We Serve
Banking
Communications
Consumer Goods
Energy
Utilities
Healthcare
IT
Media
Entertainment
Insurance
Manufacturing
Retail
Technology
Travel
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OBJECTIVES OF STUDY
To analyze the various forms of compensation and benefits provided to the
employees.
To examine the compensation and benefits forms that boost the interest of the
employees to work.
To examine the perception of employees on current pattern of compensation and
benefits.
To know if the equity parameters are met by the organizations in the industry
To understand employee compensation and benefits of various organizations in
the Semiconductor sector.
To know the expectations of the employees on Compensation and Benefits in the
times to come
SCOPE OF STUDY
The study aims to gain an insight of compensation and benefits offered to the
employees. An effort is made to analyse the satisfactory level of respondent
employees towards various factors of compensation and benefits.
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RESEARCH METHODOLOGY
Statement of Problem
Employee compensation is an important determinant of employee satisfaction.
Knowing what the employees actually want in terms of the benefits and perks offered
by the employers, in addition to fair and adequate pay is crucial to satisfy and retain
the key talent in any organization. Compensation has to be fair and equitable among
all employees in the company (internal equity) as well as in comparison to the
external market (external equity).
The study is taken up to analyze the perception of employees towards the current
pattern of Compensation, the satisfactory level of employees on various forms of
compensation and their expectations on the pattern of compensation in times to come ,
for the betterment of the employees. Methodology is the section of a research
proposal in which the methods to be used in the present study are described. The type
of study is behavioral in nature. The methodology of study used in the study is
descriptive where it includes surveys and fact finding formats.
Sources of data
The present study is mainly based on primary data. Secondary data is also taken into
consideration where ever necessary.
Primary Data
The primary data is collected through structured questionnaires. Responses were
obtained from 50employees from the organization.
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Secondary Data
The secondary data collected includes review of the existing literature of employee
compensation and benefits from various text books, internet sources and journals to
get an understanding of the concepts related to the study.
Methods of Sampling
Convenience sampling is used in getting an approximation of the truth. This non
probability method is used during research efforts to get an estimate of the results, in
order to overcome the cost or time constraints required to select a random sample.
Judgment sampling This is an extension of convenience sampling. The entire sample
is from one "representative" city (Bangalore), even though the population includes
other cities.
The Sample
For the present study, data was collected with the help of structured questionnaires
from 80 technical employees from four organizations. The respondent employees,
twenty each, are taken from the following four companies in the Semiconductor
industry.
Data Collection
The tools used for data collection are structured questionnaires distributed to the
respondents through emails, as preferred by the respondents who are technically
equipped.
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PROJECT WORK UNDERTAKEN IN THE ORGANISATION
Human Resource is the most vital resource for any organization. It is responsible for
each and every decision taken, each and every work done and each and every result in
the Organization. The successful management of an organization's human resources is
an exciting, dynamic and challenging task, especially at a time when the world has
become a global village and economies are in a state of flux. The scarcity of talented
resources and the growing expectations of the modern day employees have further
increased the complexity of the human resource function. Even though specific
human resource functions/activities are the responsibility of the human resource
department, the actual management of human resources is the responsibility of all the
managers in an organization It is therefore necessary for all managers to understand
and give due importance to the different human resource policies and activities in the
organization. Human Resource Management outlines the importance of HRM and its
different functions in an organization. It examines the various HR processes that are
concerned with attracting, compensating, managing, motivating and developing
employees for the benefit of the organization. Employees should be managed properly
and motivated by providing best remuneration and compensation as per the industry
standards. The lucrative compensation will also serve the need for attracting and
retaining the best employees.
Compensation
Compensation is the remuneration received by an employee in return for his/her
contribution to the organization. It is an organized practice that involves balancing the
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work-employee relation by providing monetary and non-monetary benefits to
employees. Compensation is an integral part of human resource management which
helps in motivating the employees and improving organizational effectiveness.
Nature of Compensation
Employee compensation offered by an organization involves various forms of pay and
rewards going to employees and arising from their employment. A Compensation
package includes Direct Financial Payments through base pay and variable pay and
indirect payments through benefits and incentives. This ensures equal pay for equal
work i.e. each individuals pay is fair in comparison to others doing the same or
similar jobs.
Base Pay
It is the basic compensation an employee gets usually as a wage or salary. Base pay is
based of the role in the organization and the market for the expertise required
conducts that role.
Variable pay
It is the compensation that is linked directly to performance accomplishments.
Variable pay is based on the performance of the person in that role, for example, for
how well that person achieved his or her goals for the year.
Benefits
These are indirect rewards given to an employee or group of employees as a part of
org benefits are employer provided rewards and services other than wages and
salaries. These benefits are provided for various reasons:
1. Keep salaries low and hence obtain tax benefits.
2. Make the salary package competitive to recruit and retain talent.
3. Act as motivators
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4. Ensure long term employment as some benefits are linked to time spent in an
organization. Organizational membership (health insurance, vacation pay, retirement
pension etc).
Need for Compensation Management
Fair Compensation
Compensation Management is needed to design pay structure that will attract,
motivate and retain competent employees, that is also viewed as fair by the
employees.
Inclusion of Benefits
Salary is just a part of the compensation system, the employees have other
psychological and self-actualization needs to fulfill. Thus, benefits are included to
serve the purpose.
Reward desired behavior
Compensation should reinforce desired behavior through increments and rewards and
act as an incentive for the behavior to occur again. Similarly withholding increments
for poor performance will ensure that the employee puts in more efforts. For example:
Many organizations appreciate the employee effort though Thank you cards for the
effort they have put in for the month. This invokes a sense of healthy competition
among employees and a positive work spirit. Also the methods of Star of the month
which rate the productivity and efficiency enable measuring the employee efficiency.
Employee
Retention
NeedSatisfactio
n
Motivation
Compensation
Package
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DRIVERS OF COMPENSATION
The following factors influence the shaping of compensation package:
Market research about the worth of similar jobs in the marketplace,
Employee contributions and accomplishments,
The availability of employees with like skills in the marketplace
The desire of the employer to attract and retain a particular employee for the
value they are perceived to add to the employment relationship, and the
profitability of the company or the funds available in a non-profit or public sector
setting, and thus, the ability of an employer to pay market-rate compensation.
Components of Compensation System
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. Components of a compensation system
are as follows:
Fig: Components of Compensation
Salary
Surveys
Pay
Structures
Job
Analysis
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Job Analysis
Job Analysis helps in finding out the abilities or skills required to do the job
efficiently. A detailed study of the jobs is usually mad e to identify the qualifications
and experience required for them. Job Analysis can be used in compensation to
identify or determine:
Skill levels
Compensable job factors
Work environment (e.g., hazards; attention; physical effort)
Responsibilities (e.g., fiscal; supervisory)
Required level of education (indirectly related to salary level)
Pay Structures
A companys pay structure is the method of administering its pay philosophy. The
two leading types of pay structures are the internal equity method, which uses a
tightly constructed grid to ensure that each job is compensated according to the jobs
above and below it in a hierarchy, and market pricing, where each job in an
organization is tied to the prevailing market rate. A pay structure helps answer
questions about whos who, what each persons role is, and why people are
compensated differently. It also helps human resources personnel to fairly administer
any given pay philosophy. For example, a company might want to pay everyone at
market; or pay some people at market and some above it. Opportunities for incentives
are also dealt with in the pay structure. For example, people with strategic roles will
likely have opportunities for higher incentives.
Salary Survey
The Salary survey is the research done to analyze the industry standards to set up the
compensation strategy for the organization. Organizations can either conduct the
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survey themselves or they can purchase the survey reports from a reputed research
organization. These reports constitute the last 2-5 years or more compensation figures
for the various positions held by the organizations.
Objectives of Salary Survey
To gather information regarding the industry standards.
To design a fair compensation system.
To design and implement most competitive reward strategies.
To benchmark the compensation strategies
To know more about the market rate i.e. compensation offered by the
competitors.
Types of Compensation Surveys
There are two types of compensation surveys undertaken by the organizations.
Fig: Types of Compensation Survey
Standard Surveys
Standard surveys are undertaken by organizations on a regular basis. These surveys
are conducted annually based on the organizational objectives. These surveys attempt
to cover the same companies every year and provide the same time of analysis. The
reports are published annually by the research organizations. The organizations
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willing to formulate their compensations strategies based on the surveys purchase the
reports from the research organization.
Custom Surveys
At times, a few organizations need to know some specific information. The surveys
which cater this need are known as custom surveys. The organizations either resort to
higher research organizations to conduct theses surveys for them or they themselves
conduct the survey by sampling few of the competitors on their own. These surveys do
not have any time interval. They are undertaken as the need arises. They focus on
importantissues usually one or two.
Survey Reports
The survey reports consist of the analysis and conclusion drawn from the evaluative
data based on the objectives of the study. The reports also include the data, facts and
figures to support the analysis and conclusion. The supportive data and annexure
provided in the report form the basis for the un-biased conclusion and validation of
the analysis.
COMPENSATION SYSTEMS
Strategic Compensation
Compensation strategy is derived from the business strategy. The business goals and
objectives are aligned with the HR strategies. Then the compensation committee or
the concerned authority formulates the compensation strategy.
It depends on both internal and external factors as well as the life cycle of an
organization.
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Fig: Evolution of Strategic Compensation
Traditional Compensation Systems
In the traditional organizational structures, employees were expected to work hard and
obey the bosses orders. In return they were provided with job security, salary
increments and promotions annually. The salary was determined on the basis of the
job work and the years of experience the employee is holding. Some of the
organizations provided for retirement benefits such as, pension plans, for the
employees. It was assumed that humans work for money, there was no space for other
psychological and social needs of workers.
Change in Compensation Systems
With the behavioral science theories and evolution of labour and trade unions,
employees started asking for their rights. Maslow brought in the need hierarchy for t
he rights of the employees. He stated that employees do not work only for money but
there are other needs too which they want to satisfy from their job, i.e. social needs,
psychological needs, safety needs, self-actualization, etc. Now the employees were
being treated as human resource. Their performance was being measured and
appraised based on the organizational and individual performance. Competition
among employees existed. Employees were expected to work hard to have the job
security. The compensation system was designed on the basis of job work and related
proficiency of the employee.
Todays Modern Compensation Systems
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Today the compensation systems are designed aligned to the business goals and
strategies. The employees are expected to work and take their own decisions.
Authority is being delegated. Employees feel secured and valued in the organization.
Organizations offer monetary and non-monetary benefits to attract and retain the best
talents in the competitive environment. Some of the benefits are special allowances
like mobile, companys vehicle; House rent allowances; statutory leaves, etc.
Equity Theory
Employees want to be treated fairly. Equity is the balance between the inputs the
individual brings to a job and the outcomes he or she receives from it. Employee
inputs include skills, experience, education, special skills, effort and time worked.
Outcomes include pay, benefits, achievement, recognition and any other rewards. The
individual special skills and efforts are weighed against the pay and recognition paid
by the organization. However inputs and outcomes are in different units and are hard
to compare with each other directly. Thus equity theory suggests that individuals
determine whether they are being treated fairly by comparing their own outcomes.
Three elements of equity can be distinguished, internal, external and an individual.
Internal Equity
Internal equity refers to the relationship among jobs within a single organization. It
exists when the employee pay differentials between different jobs within in the
organization are perceived as fair neither too large not too small. This ensures that
more difficult jobs are paid more.
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Fig: Internal Equity
External Equity
External equity refers to comparison of similar jobs in different organizations of the
same Industry. This ensures that jobs are fairly compensated in comparison to similar
jobs in the market. Here the market pricing analysis is done. Organizations formulate
their compensation strategies by assessing the competitors or industry standards.
Organizations set the compensation packages of their employees aligned with the
prevailing compensation packages in the market. This entails for fair treatment to the
employees. At times organizations offer higher compensation packages to attract and
retain the best talent in their organizations.
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Fig: External Equity
Individual Equity
Final element individual equity refers to comparison among individuals among the
same job with the same organization.
Types of Compensation
A Compensation package includes Direct Financial Payments through base pay and
variable pay and indirect payments through benefits and incentives. This ensures
equal pay for equal work i.e. each individuals pay is fair in comparison to others
doing the same or similar jobs.
Direct Compensation
Direct compensation refers to monetary benefits offered and provided to employees in
return of the services they provide to the organization .
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Basic Salary
Salary is the amount received by the employee in lieu of the work done by him/her for
a certain period say a day, a week, a month, etc. It is the money an employee receives
from his/her employer by rendering his/her services.
House Rent Allowance
Organizations either provide accommodations to its employees who are from different
state or country or they provide house rent allowances to its employees. This is done
to provide them social security and motivate them to work.
LeaveTravel
Allowance
Bonus
SpecialAllowance Basic Salary
House RentAllowance
MedicalReimbursement
Conveyance
Direct
Compensation
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Conveyance
Organizations provide for cab facilities to their employees. Few organizations also
provide vehicles and petrol allowances to their employees to motivate them.
LeaveTravelAllowance
These allowances are provided to retain the best talent in the organization. The
employees are given allowances to visit any place they wish with their families. The
allowances are scaled as per the position of employee in the organization .
Medical Reimbursement
Organizations also look after the health conditions of their employees. The employees
are provided with medi-claims for them and their family members. These medi-claims
include health-insurances and also medical treatment bills reimbursements.
Bonus
Bonus is paid to the employees during festive seasons to motivate them and provide
them the social security. The bonus amount usually amounts to one months salary of
the employee.
Special Allowance
Special allowance such as overtime, mobile allowances, meals, commissions, travel
expenses, reduced interest loans, insurance are provided to employees to provide them
social security and motivate them which improve the organizational productivity.
Indirect Compensation
Indirect compensation refers to non-monetary benefits offered and provided to
employees in lieu of the services provided by them to the organization.
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Figure showing Forms of Indirect Compensation
Overtime Policy
Employees should be provided with the adequate allowances and facilities during
their overtime, if they happened to do so, such as transport facilities, overtime pay,
etc.
Hospitalization
HolidayHomes
FlexibleTimings
RetirementBenefits Leave Travel
Insurance
Hospitalization
OvertimePolicy
Indirect
Compensation
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The employees should be provided allowances to get their regular check-ups, say at
an interval of one year. Even their dependents should be eligible for the medi-claims
that provide them emotional security and social security as well.
Insurance
Organizations also provide for accidental insurance and life insurance for employees.
This gives them the emotional security and they feel themselves valued in the
organization.
Leave Travel
The employees are provided with leaves and travel allowances to go for holiday with
their families. Some organizations arrange for a tour for the employees of the
organization. This is usually done to make the employees stress free.
Retirement Benefits
Organizations provide for pension plans and other benefits for their employees which
benefits them after they retire from the organization at the prescribed age.
Holiday Homes
Organizations provide for holiday homes and guest house for their employees at
different locations. These holiday homes are usually located in hill station and other
most wanted holiday spots. The organizations make sure that the employees do not
face any kind of difficulties during their stay in the guest house
Flexible Benefit Plan
Flexible benefits plans, also called cafeteria plans, are arrangements in which
employees tailor their benefits package to their specific needs. It is a benefits plan that
allows employees to select from a pool of choices, some or all of which may be tax-
advantaged.
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Employees can select the benefits they value most and may forgo benefits of lesser
importance to them. Potential choices include cash, retirement plan contributions,
vacation days, and insurance.
Under a flexible arrangement, an employer allocates a specified amount of money to
each employee to 'purchase' benefits. In this way, the employers control the amount
they spend on each employee for benefits, while the employee selects the benefits.
This method differs from a traditional benefits programme, in which an employer
offers a standard package with few, if any, choices to employees.
Incentive Plans
Organizations can opt for an effective incentive plans from the various alternatives
available. The organizations usually opt for that incentive plans which suits its
requirement the most. As incentives covers the financial matters, organizations need
to be very focused in choosing the best alternative that is in alignment to the business
goals and objectives. The various forms of incentive plans are:
Figure: Incentive Plans
LoyaltyPay
GainSharing
MaturityCurves
StandardHour Pay
MeritRaises
Bonus
Incentive
Plans
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Bonuses
Bonuses are given to employees on a pre established goal or criteria. The
organizations set policies regarding the bonuses. Usually bonuses are provided during
the festive season.
Merit Raises
Merit raises are given on the basis of predetermined policies. The employees are
given raise on the basis of their performance. The performance standards are set by
the organizations much in advance.
Standard Hour Pay
Standard hour plan provides incentives to employees based on the time saved by them
during the job course. Employees productivity and quality is evaluated with respect
to the set standards.
Maturity Curves
Maturity curve incentive plan considers the experience and performance of an
employee for giving out the incentives. It is practiced in all the industries. Experience
is always given a weight-age as experienced people can produce better quality results.
Gain Sharing
Gain sharing incentive plans undertake those employees who give outstanding
performances and provide for cost saving measures. Organizations believe in sharing
the profits with the employees who are responsible for producing those results.
Loyalty Pay
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Pay for loyalty is an incentive plan that helps to retain loyal employees of the
organization. Loyalty pay involves the payment of a sum of money, say, one months
additional salary, to the employees working for more than certain minimum years in
the organization.
Features of Effective Compensation Policy
An effective compensation plan takes care of legal stipulations, industry practices,
ever rising employee expectations and competitive pressures.
A compensation policy is effective if compensation and benefits are:
Adequate
In line with what is paid in similar companies in the same geographical area.
Balanced
A reasonable combination of direct and indirect benefits.
Equitable
Commensurate with the effort put in and the ability used.
Incentive
Sufficient incentives are needed to motivate the employees to work effectively.
Secure
Sufficient to satisfy the employees basic need and make him feel secure.
Cost effective
What the organization can afford to pay. A rational compensation plan helps attract
and retain employees at a reasonable cost. Without proper structure the organization
may overpay or underpay the employees.
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ANALYSIS AND INTERPRETATION OF THE DATA
Introduction
Keeping in view, the objectives of the study, the data collected through the
questionnaires is analyzed and interpreted with the help of the statistical tabulation
method. Statistical tools such as percentages, ANOVA (two way classification),
Likert scale, diagrams and graphs are used to test and interpret the findings.
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Satisfactory level of employees regarding compensation based on qualification
Levels Qualifications
Number of employeesPercentage ofemployees
Most Satisfactory 3 6
Satisfactory 30 60
Neutral 12 24
Dissatisfactory 5 10
Most Dissatisfactory 0 0
Total 50 100
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Inference
60% of the respondent population is satisfied with the current compensation package
based on their qualification. The response shows that 24% of the respondents gave
neutral rating, where as 10% are dissatisfied. It is inferred that majority of the
respondents are satisfied with the current compensation, taking their qualification into
account. However, a significant percentage of respondents.
Satisfactory level of employees regarding compensation based on experience
Levels Experience
Number of employeesPercentage ofemployees
Most Satisfactory 2 4Satisfactory 25 50
Neutral 14 28
Dissatisfactory 9 18
Most Dissatisfactory 0 0
Total 50 100
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Inference
50% of the respondent population is satisfied with the current compensation package
based on their experience. The response shows that 28% of the respondents gave
neutral rating, whereas 18% are dissatisfied. It is inferred that half of the respondent
population is satisfied with the current compensation, taking their experience into
consideration. However a more percentage of employees are dissatisfied with the pay
based on their experience, than that on qualification.
The Organizations pay policy is clear, related to the salaries, pay and bonus
OptionNumber ofemployees
Percentage ofemployees
Yes 46 92
No 4 8
Total 50 100
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Inference
92% of the respondents accept that the organizations pay policy, related to the
salaries, pay and bonus is clear to them whereas 8% respondents do not feel that the
organizations pay policy, related to the salaries, pay and bonus is clear.
A clear pay policy makes the employer-employee relation transparent and enhances
mutual understanding. It is inferred from the above graph that the pay policy is clear
to majority of the respondents.
Presence of belief in employees on performance based payment system
OptionNumber ofemployees
Percentage ofemployees
Yes 46 92
No 4 8
Total 50 100
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Inference
92% of the respondents show belief in the performance based payment system. 8% do
not believe in the performance based payment system. One of the reasons is that
performance based payment system involves the rating given to the employees by the
managers who may be partial to some extent. Also quantifying the performance is a
subjective process which may lead to differentiation among the employees
The Organization provides pay in accordance with the responsibilities handled
Level of agreementNumber ofemployees
Percentage ofemployees
Strongly Agree 2 4
Agree 25 50
Neutral 13 26
Disagree 8 16
Strongly disagree 2 4Total 50 100
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Inference
50% of the respondent population agrees that their pay is in accordance with the
responsibilities they handled. 4% of the respondents strongly agree to it, where as
16% and 4% of the respondent population disagree and strongly disagree
respectively.26% of the respondents show neutral remarks.
It can be inferred that the opinions in reaction to this query varies among half of the
respondents.
Willingness of the respondents to take additional responsibility, if the
compensation is increased
Option Number of employeesPercentage ofemployees
Yes 36 72
No 14 28
Total 50 100
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Inference
72% of the respondents are willing to take additional responsibilities, if the
compensation is increased. 28% of the respondents are not willing to take up
additional responsibilities, even if the compensation is increased.
It can be inferred that compensation alone is not sufficient to please the employees .
Existence of bias in the compensation package of similar jobs within the
Organization
Option Number of employeesPercentage of
employees
Yes 42 84
No 8 16
Total 50 100
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Inference
84% of the respondents express that bias exists in the compensation package of
similar jobs within the Organization. Only 16% of the respondents do not think that
bias exists.
From this chart, it can be inferred that majority of the employees do not feel that
internal equity is met in the organizations.
The Compensation package is at par with package of similar jobs in other
Organizations in the Industry
Option Number of employeesPercentage of
employees
Strongly agree 1 2
Agree 25 50
Neutral 13 26
Disagree 8 16
Strongly disagree 3 6
Total 50 100
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Inference
50% of the employees agree to the statement, where as the 26% of respondents are
neutral. Only 2% of the respondents strongly agree to it. On the contrary, 6% disagree
strongly.
It can be inferred that half of the respondents agree that their companys pay package
is at par with the industry standards, which means external equity is met.
Salary is provided in one of the following weeks, every month by the
organization
Weeks of the month Number of employeesPercentage of
employees
First week 41 82
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Second week 0 0
Third week 0 0
Fourth week 9 18
Total 50 100
Inference
82% of the respondents are paid in the first week of every month; where as
18% of the employees are paid in the fourth week of every month.
The salary paid regularly in the same time every month
Option Number of employeesPercentage of
employees
Yes 50 100
No 0 0
Total 50 100
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Inference
All the respondents receive monthly salary regularly in the same time every month.
This implies that the Organizations pay the employees regularly
The following factors would boost the employees interest in work
Option Number of employeesPercentage of
employees
Increments 42 84
Better amenities by theorganization 26 52
Scope of Advancement 31 62Better working conditions 27 54
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Better work life balancefacilities 37 74
Inference
Increments boost the interest of the majority of the respondents, followed by better
work-life conditions, then by scope of advancement. More than half of the
respondents look for better amenities by the organization and better working
conditions.
Specifically, the level of satisfaction with the following:
Factors Increments
SickLeavePolicy
MedicalBenefitScheme Incentives Insurance
MostSatisfactory 2 10 8 6 18
Satisfactory 9 30 31 8 22
Neutral 26 9 9 22 6
Dissatisfactory 10 1 2 9 4
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MostDissatisfactory 3 0 0 5 0
Inference
More than half of the respondent population is neutral towards increments. Majority
of the respondents show satisfaction towards the sick leave policy, medical benefit
scheme and the insurance. Satisfactory level of employees is high in case of Sick
Leave Policy and Medical Benefits. Response is evenly spread across the three
satisfactory levels in case of Incentives. Dissatisfactory level is high in case of
increments.
Would like to recommend any changes in the current Compensation and Benefits
package in the Organization
Option Number of employeesPercentage of
employees
Yes 23 46
No 27 54
Total 50 100
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Inference
46% of the respondents would like to recommend changes in the current compensation
and benefits package.54% of the respondents would not recommend changes to the
current compensation package.
Summary of Findings, Conclusion and Recommendations
Findings
Majority of the respondents are satisfied with the compensation based on
qualification.
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Majority of the respondents are satisfied with the compensation based on
experience.
Most of the respondents felt that the organizations pay policy is clear, related
to the salaries, pay and bonus.
Almost all the respondent employees believed in performance based
compensation system.
Fifty percent of the respondents agreed that the Organization they work for
provides pay in accordance with the job responsibilities they handle.
More than half of the respondent population is willing to take additional
responsibility, in case the compensation is increased.
Three fourths of the respondents feel that there exists bias in the compensation
package of similar jobs within the organization.
The salary is paid to the employees in the first week to the majority of the
employees and to the rest of the respondents in the fourth week.
Of all the following factors,
Increments
Sick Leave Policy
Medical Benefit Scheme
Incentives and
Insurance Policy
Increments boost the interest of most of the employees.
Nearly half of the respondent population considers the need to make changes
in the existing compensation and benefits package in their respective
Organizations.
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Conclusion
Todays compensation systems have come from a long way. The results of the study
indicate that with the changing organizational working patterns and employee needs,
there is a need to bring in changes in the compensation systems.
The organization needs to provide competitive compensations to their employees,
taking into account, the higher education qualifications, experience and higher skills
required for the jobs.
Further the study reveals that perfect compensation system, with properly designed
features like loyalty pay and Flexible Benefit Plan along with timely increments, and
performance incentives, provides platform for happy and satisfied workforce.
The workforce not only looks for monetary benefits, but also looks forward to various
aspects like wok-life balance facilities, better amenities, and better scope of
advancement.
The business organization can think of expansion and growth if it has the support of
skilful, talented and happy workforce. Therefore a fair compensation system is a must
for every business organization.
The sound compensation system is hallmark of organizations success and prosperity.
Recommendations
Compensation packages should be based on quantity, quality and impact of
work.
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There needs to be focus on employee potential and current performance while
structuring the compensation and benefits package.
Provision of short term and medium term education course packages, helps the
competent employees to horne their skills and enhance their knowledge. This
in turn, helps the organization to grow.
Inclusion of overtime pay package, as work load is high during the project
completion period.
Adoption of innovative ways to reduce tax burden on employees is needed as
money saved is money earned.
Monthly/Quarterly rewards for star performers should be included, as this
keeps the employees on toes as well as for most of the employees
compensation play a crucial determinant.
The Compensation has to be balanced properly across the employees of
organization who have the same number of years of experience and also the
nature of work being same.
BIBLIOGRAPHY
www.fasttrackteam.com
www.google.co.in
http://www.fasttrackteam.com/http://www.google.co.in/http://www.fasttrackteam.com/http://www.google.co.in/ -
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Compensationin Organizations,by Sara L. Rynesand Barry Gerhart, eds. Jossey-BassInc.
ANNEXURE
QUESTIONNAIRE ON EMPLOYEE COMPENSATION AND BENEFITS
I. EMPLOYEE DETAILS:
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a .Name:
a. Designation :
b. Name of the Organization:
c. Years of Experience in the Organization :
d. Income Level (Annual): Below 6 Lacs 6-10Lacs Above10 Lacs
II. DETAILS OF COMPENSATION AND BENEFITS
1. Satisfactory level of employees regarding compensation based on
Factors a)Qualification b) Experience
Most Satisfactory
Satisfactory
Neutral
Dissatisfactory
Moist Dissatisfactory
2. The Organizations pay policy is clear, related to the salaries, pay and
bonus
Yes No
3. Do you believe in performance based payment system?
Yes No
If No, please state a good strategy that can be followed
4. The Organization provides pay in accordance with the responsibilities
handled
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5. Are you willing to take additional responsibility, if the compensation is
increased?
Yes No
6. According to you, is there any bias in the compensation package of
similar jobs within the Organization?
Yes No
7. The Compensation package is at par with package of similar jobs in other
Organizations in the Industry.
StronglyAgree
Agree Neutral Disagree StronglyDisagree
StronglyAgree
Agree Neutral Disagree StronglyDisagree
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8. Monthly salary provided by the organization
a) In which of the following weeks of the month is the salary provided?
First week Second week Third week Fourth Week
b) The salary paid regularly in the same time every month.
Yes No
9. Which among the following makes you feel would boost your interest in work?
a.) Increments
b.) Better amenities by Organization
c.) Scope of advancement
d.) Better working conditions
e.) Better work life balance facilities
10. Specifically, the level of satisfaction with the following
Factors Increments Sick LeavePolicy
MedicalBenefitScheme
Incentives Insurance
Most Satisfactory
Satisfactory
Neutral
Dissatisfactory
Moist Dissatisfactory
11. Would like to recommend any changes in the current Compensation and
Benefits package in the Organization