COMPENSATION MANAGEMENT

COMPESATION MANAGEMENT
Acc. Michael Armstrong ,"compensation management is essentially about designing, implementing and maintaining pay systems which help to improve organizational performance."

TYPES
direct compensation
a.pay
b.incentive
indirect compensation
a.benefits
b.services


DETERMINANTS OF COMPENSATION
external factors
1.legal consideration
2.market rate
3.equity
4.cost of living
5.union pressure
 internal factors
1.objectives of compensation
2.compensation policies
3.job evaluation
4.employee productivity


METHODS OF ESTABLISHING EMPLOYEE COMPENSATION
1.job analysis
a.job description
b.job specifiaction
c.job performance standards
2.job evaluation
a.job ranking methods
b.job grading method
c.factor comparison method
d.point system
3.compensation survey
a.published surveys
b.consultants
c.advertisement and applicants
d.informal communication
4.pricing of job


CURRENT TRENDS IN COMPENSATION
1.skill-based pay
2.broadbanding
3.equality


INCENTIVE PLANS
Acc. Wendell French ,"incentive plans provide financial or non-financial rewards to employees who make substantial contributions to organizational effectiveness."


FORMS OF INCENTIVE PLANS
1.individual incentive plan
a.piecework plan
b.commission plan
c.bonus plan
2.group incentive plan
3.organizational incentive plan
a.productivity gain sharing plan
b.profit sharing plan
c.suggestion plan
d.employee share ownership plan


UNION INFLUENCE ON COMPENSATION PROGRAMMES 
1.collective bargaining(samuhik saudabaji)
2.compensation system
3.industrial actions