1. Compensation & Benefits
11/15/2018
Compensation
& Benefits

2. Compensation Components
Base compensation or pay received on a regular basis
Pay incentives for good performance
Benefits or services arising out of membership status
A major cost element (up to 80 percent)

3. Criteria for compensation distribution
Performance
Effort
Seniority
Skills held
Job difficulty

4. Structure of compensation
Rewards/Compensation
1. Intrinsic
Extrinsic
Participation
a. Financial
b. Non-Financial
Job
freedom
Membership based
Performance based
Impressive
titles
Growth
Profit sharing schemes
Performance bonus
Preferred working hours
Responsibility
COLA
Commission
Parking space

5. Characteristics of effective compensation
Enables an organization to attract and retain qualified, competent workers
Motivates employee performance, fosters a feeling of equity, and provides direction to their efforts
Supports, communicates, & reinforces organization's culture, values, and competitive strategy
Complies with government regulations
Cost structure reflects the organization's ability to pay

6. Approach to designing compensation
Job based approach
Skills based approach

7. Eg of job based pay structure
Grade
Jobs
Pay (Rs/hr)
Grade 6
Chef
300 – 500
Grade 5
Manager
Deputy Chef
Grade 4
Asst. Manager
Lead Cook
100 – 200
Grade 3
General Cook
Clerk
50 – 150
Grade 2
Server; Cashier
40 – 80
Grade 1
Kitchen helper
Dishwasher
25 – 50
Traditional and more widely used
Assumption
Work gets done by people who are paid to perform well-defined jobs to achieve specific tasks
Not all jobs equally important to the firm
Different value of different jobs by the labor market
Allocation of pay so that most important jobs pay the most.

8. Eg of skill based pay structure
Block
Skills
Pay 5
Create new items for menu
Finds different uses of leftovers
Coordinates & control work of employees
Rs 300/ hr 4
Cook existing menu items following recipe
Supervises kitchen help
Prepare payroll
Rs 220/ hr 3
Schedule servers and assign workstations
Conduct inventory
Rs 160/ hr 2
Greet customers and take orders
Assist in kitchen with food preparation
Rs 120/ hr 1
Clean and set up table
Use dishwashing equipment
Rs 60/ hr
Modern but far less common
Assumptions
Workers should be paid by how flexible or capable they are at performing multiple tasks
Greater the variety of job-related skills workers possess, the more they are paid

9. 11/15/2018
Employee Relations

10. Employee Relations (ER)
A set of policies, programmes and mechanisms
Focused on safeguarding and promoting the basic interests of people at work
Within the framework of mutual cooperation between management and employees and human dignity and growth
To seek greater organizational effectiveness

11. ER Programmes
Participation: To what extent decision making and control be shared?
Protection: Are there aspects of the workplace that threaten the well-being of employees?
Rights: How shall we ensure they are in place?
Assistance: How shall we respond to the special needs of specific employees?
Communication: How best can we convey our organizational philosophy to employee?
Recognition: How can we award for the good work done?
Social & Informal: How can we understand one another better?

12. Recognition tips for managers
Offer employee reward options
Identify what's meaningful to your employees
Keep employee recognition fresh
Recognize all levels of employees
Make sure recognition is given consistently
Keep it simple
Keep it adaptable
Make it timely