Note for COMPENSATIONS & BENEFITS - CB By JNTU Heroes

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COMPENSATION AND BENEFITS Subject Code : 14MBA HR303 No. of Lecture Hours / Week : 04 Total Number of Lecture Hours : 56 Practical Component : 01 Hour / Week IA Marks : 50 Exam Hours : 03 Exam Marks : 100 Objectives • To discuss the strategic importance of compensation to the achievement of organizational goals. And the identify links between compensation objectives and business strategy. • Discuss the role of compensation in attracting, motivating, and retaining a high-quality workforce. • Discuss recent theoretical and practical developments in the area of compensation and benefits. • Develop the basic competencies required for the development and management of compensation systems. • Discuss how compensation management can become a competitive advantage. • Discuss the role of compensation management as part of the new mandate for HR executives. Module 1: (6 Hours) Introduction To Compensation: Definition of Compensation, The Pay Model, Strategic Pay Policies, Strategic Perspectives of Pay, Strategic Pay Decisions, Best Practices vs. Best Fit Options Module 2: (6 Hours) Defining Internal Alignment: Definition of Internal Alignment, Internal Pay Structures, Strategic Choices In Internal Alignment Design, Which Internal Structure Fits Best? Module 3: (10 Hours) Job Analysis and Evaluation: Why Perform Job Analysis?, Job Analysis Procedures, Job Analysis Data Collection Process, Job Descriptions, Definition of Job Evaluation, Major Decisions In Job Evaluation, Job Evaluation Methods, Final Result – Pay Structure Module 4: (8 Hours) Determining External Competitiveness and Benefits Management: Competitiveness: Definition of Competitiveness, Pay Policy Alternatives, Wage Surveys, Interpreting Survey Results, Pay Policy Line, Pay Grades Benefits: Benefits Determination Process, Value of Benefits, Legally Required Benefits, Retirement, Medical, & Other Benefits Module 5: (10 Hours) 1

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Performance Based Compensation System: Employee Contributions: Pay For Performance (PFP): Rewarding Desired Behaviors, Does Compensation Motivate Performance?, Designing PFP Plans, Merit Pay/Variable Pay, Individual vs. Group Incentives, Long Term Incentives. Compensation of Special Groups: Who are Special Groups?, Compensation Strategies For Special Groups Module 6: (8 Hours) Legal & Administrative Issues in Compensation: Legal Issues, Pay Discrimination, Comparable Worth, Budgets and Administration Module 7: (8 Hours) Global Compensation: Recognizing Variations, Social Contract, Culture & Pay, Strategic Choices In Global Compensation, Comparing Systems, Expatriate Pay Practical Components • Students must prepare a comprehensive compensation plan to be offered to a Sales Executive, A General Manager and The CEO of an organization. • Students to collect information from an IT organization regarding the Cost To Company of an employee. • Students have to prepare questionnaire for conducting wage survey and carry out wage survey for any selected sector and prepare a report for the same. Solve various case studies. • Students must compare and analyze compensation practices in different countries. • Students to calculate the bonus amount eligible to an employee working as a HR Executive for the past 10 years in a automobile manufacturing organization. RECOMMENDED BOOKS: • Compensation & Reward Management, BD Singh, 2 nd edition, Excel BOOKS, 2012, ISBN: 9350620111, 9789350620113 • Compensation, Milkovich & Newman, 6 th edition, Irwin/McGraw-Hill, ISBN: 0256259658, 9780256259650 • Compensation and Benefit Design, Bashker D. Biswas, FT Press, 2012, ISBN: 0133064859, 9780133064858 • An Introduction to Executive Compensation, Steven Balsam, Academic Press, 2002, ISBN: 0080490425, 9780080490427 REFERENCE BOOKS: • Strategic Compensation, Joseph J. Martocchio, 3rd Edition, Prentice Hall, 2004, ISBN: 0131918737, 9780131918733 • Compensation Management in a Knowledge based world, Richard I. Anderson, 10th edition, Pearson Education • Compensation Management, Er Soni Shyam Singh, Excel Books, ISBN: 8174465766, 2

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TABLE OF CONTENTS MODULE NUMBER Title PAGE NUMBER 1 Introduction To Compensation 04 2 Defining Internal Alignment 13 3 Job Analysis and Evaluation 18 4 Determining External Competitiveness and Benefits Management 28 5 Performance Based Compensation System 44 6 Legal & Administrative Issues in Compensation 63 7 Global Compensation 72 3

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Module 1 Introduction To Compensation: Definition of Compensation, The Pay Model, Strategic Pay Policies, Strategic Perspectives of Pay, Strategic Pay Decisions, Best Practices vs. Best Fit Options Defining Compensation Compensation, or pay (the words are used interchangeably in this book), refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. Compensation (also known as Total Rewards) can be defined as all of the rewards earned by employees in return for their labour. This includes:    Direct financial compensation consisting of pay received in the form of wages, salaries, bonuses and commissions provided at regular and consistent intervals Indirect financial compensation including all financial rewards that are not included in direct compensation and understood to form part of the social contract between the employer and employee such as benefits, leaves, retirement plans, education, and employee services Non-financial compensation referring to topics such as career development and advancement opportunities, opportunities for recognition, as well as work environment and conditions 4