Componsation concepts and policies of history

Aug 27, 20240 likes11 views

The document discusses compensation concepts and policies, defining compensation as the total monetary and nonmonetary pay an employee receives for their work. It categorizes compensation into base, supplementary, and incentive types, while detailing factors that influence compensation, such as labor supply and demand, cost of living, and employee productivity. Additionally, it explores the objectives and factors influencing fringe benefits, which are designed to enhance employee morale and welfare.

Componsation
concepts and policies
By-LAXMI

COMPANSATION
• Compensation is defined as the total amount of the
monetary and nonmonetary pay provided to an employee by
an employer in return for work performed as required.
• It's a combination of the value of your pay, vacation,
bonuses, health insurance, and any other perk you may
receive, such as free lunches, free events, etc.

Purpose of Compensation
• Attracting the talent
• Motivating the employees
• Retaining the talent

CLASSIFICATION
• Base or direct compensation
• Supplementary or indirect compensation
• Incentive compensation

COMPANSATION
BASE
BASIC PAY ALLOWANCE
SUPPLEMENTRY
FRINGE
BENEFITSPERQUITIES

Components of Base Compensation
• Basic Pay – Wage and salary
• Dearness Allowance
• House Rent allowance
• City Compensatory Allowance
• Transport allowance
• Other Allowances

Componsation concepts and policies of history

Factors affecting Compensation
• Demand for and supply of labour
• Ability to Pay
• Cost of living
• Productivity of workers
• Wage Laws
• Trade Unions
• Prevailing wage rates
• Job Requirements

Supplementary Compensation
• Over and above the base Compensation
• FRINGE BENEFITS
• Fringe benefits are additions to compensation that companies give their
employees.
• monetary and non monetary benefits
• Also termed golden hand cuffs
• Some fringe benefits such as social security and health insurance are required by
law, while others are voluntarily provided by the employer.
• Examples of optional fringe benefits include free breakfast and lunch, gym
membership, employee stock options, transportation benefits, retirement planning
services, childcare, education assistance, etc.

Objectives of Fringe Benefits
• To create and improve sound industrial relations.
• To boost up employee morale.
• To motivate the employees by identifying and satisfying their unsatisfied needs.
• To provide qualitative work environment and work life.
• To provide security to the employees against social risk like old age benefit and
maternity benefits
• To protect the health of the employees and to provide safety to the employees
against accidents
• To promote employees welfare by providing welfare measures like recreation
facilities
• . To create sense of belongingness among employees
• To meet requirements of various legislations relating to fringe benefits

Factors influencing Fringe Benefits
❑ Absolute and per capita cost of fringe Benefits
❑ Organization financial ability to provide the benefits.
❑ The bargaining strength of trade unions.
❑ Employee's significance to the organization.
❑ Tax benefits to the organization and individual employees.
❑ Need for building public image for the Organization.
❑ Organization's awareness and policy towards social responsibility.

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Componsation concepts and policies of history

1. Componsation concepts and policies By-LAXMI

2. COMPANSATION • Compensation is defined as the total amount of the monetary and nonmonetary pay provided to an employee by an employer in return for work performed as required. • It's a combination of the value of your pay, vacation, bonuses, health insurance, and any other perk you may receive, such as free lunches, free events, etc.

3. Purpose of Compensation • Attracting the talent • Motivating the employees • Retaining the talent

4. CLASSIFICATION • Base or direct compensation • Supplementary or indirect compensation • Incentive compensation

5. COMPANSATION BASE BASIC PAY ALLOWANCE SUPPLEMENTRY FRINGE BENEFITSPERQUITIES

6. Components of Base Compensation • Basic Pay – Wage and salary • Dearness Allowance • House Rent allowance • City Compensatory Allowance • Transport allowance • Other Allowances

8. Factors affecting Compensation • Demand for and supply of labour • Ability to Pay • Cost of living • Productivity of workers • Wage Laws • Trade Unions • Prevailing wage rates • Job Requirements

9. Supplementary Compensation • Over and above the base Compensation • FRINGE BENEFITS • Fringe benefits are additions to compensation that companies give their employees. • monetary and non monetary benefits • Also termed golden hand cuffs • Some fringe benefits such as social security and health insurance are required by law, while others are voluntarily provided by the employer. • Examples of optional fringe benefits include free breakfast and lunch, gym membership, employee stock options, transportation benefits, retirement planning services, childcare, education assistance, etc.

10. Objectives of Fringe Benefits • To create and improve sound industrial relations. • To boost up employee morale. • To motivate the employees by identifying and satisfying their unsatisfied needs. • To provide qualitative work environment and work life. • To provide security to the employees against social risk like old age benefit and maternity benefits • To protect the health of the employees and to provide safety to the employees against accidents • To promote employees welfare by providing welfare measures like recreation facilities • . To create sense of belongingness among employees • To meet requirements of various legislations relating to fringe benefits

11. Factors influencing Fringe Benefits ❑ Absolute and per capita cost of fringe Benefits ❑ Organization financial ability to provide the benefits. ❑ The bargaining strength of trade unions. ❑ Employee's significance to the organization. ❑ Tax benefits to the organization and individual employees. ❑ Need for building public image for the Organization. ❑ Organization's awareness and policy towards social responsibility.

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