By : JAWAD UMER KHAN

COMPENSATION
MANAGEMENT
 Compensation is what employees
receive in exchange for their contribution
to the organization.

Total compensation = Direct + Indirect Compensation

Base Pay Incentives Benefits

COMPONENTS OF EMPLOYEE
REMUNERATION
Remuneration

Financial Non-financial

Basic wages Incentives,

Individual plans Supervision
Group plans Working conditions
Job sharing
Fringe benefits Telecommuting etc
Medical care Car
Accident relief Club membership
Health and Paid holidays
insurance Furnished house
Stock option scheme
OBJECTIVES OF COMPENSATION PLANNING

 Internal equity
 External equity
 Individual equity
 Attract talent
 Retain talent
 Ensure equity
 Payment for time not worked
 Health benefits
 Security Benefits
 Part-time employee benefits
PREMIUM PAY
 Compensation paid to employees
for working long periods of time or
working under dangerous or
undesirable conditions
 Hazard Pay - Pay provided to
employees who work under
extremely dangerous conditions.
 Shift Differentials - Paid to
employees for the inconvenience of
working fewer desirable hours.
IMPORTANCE OF AN IDEAL COMPENSATION SYSTEM

Desire for performance

more pay strikes
grievances
search for options absenteeism
turnover
Pay dissatisfaction

lower job Low

attractiveness dissatisfaction salary
of jobs absenteeism rigid or hard
Work conditions
poor mental
health
INFLUENCING FACTORS OF COMPENSATION

Compensation

External Internal

Labour Market Business Strategy

Labour Unions Job evaluation &
Govt. Legislations PA
Society The Employee
Economy
DEVISING A COMPENSATION
PLAN
Job Description

Job Evaluation

Job Hierarchy

Pay Survey

Pricing Jobs
CHALLENGES OF
COMPENSATION

Skills-based Severance
pay Pay

Compensation Pay
secrecy
Pay
Comparession

Comparable
worth