1. Compensation and Benefits
Presented by B N Nagaraj

2. Compensation
 What is meant by Compensation
 What are the constituents which goes into
Compensation
 How is it determined
 How is it implemented

3. What is Compensation
 To compensate in any manner for the
service rendered
 It might be in Cash or Kind

4. Constituents of Compensation
 In cash might be :
 Salary and Wage
 Bonus
 LTA
 Incentives
 Reimbursements
 Performance pay/ Variable pay

5. Constituents of Compensation
 In Kind or Perks
 Welfare Schemes
 Holiday Packages
 Leave and Holidays
 Fringe Benefits which goes along with the
Positions
 ESOPs

6. Constituents of Compensation
 Examples
 Company Leased Accommodations.
 Company Car
 Free education for Children
 Club Facilities
 Recreation facility
 Working from home

7. Constituents of Compensation
 Contd :-
 Good working Atmosphere
 Equal rights
 Rewards (Annual, long service, Best employee etc)
 Annual get together
 Position and Authority
 Insurances
 Training and Development (internal / external / abroad)
 Career Growth
 Canteen
 Loans and Advances
 Rehabilitations
 Retirement Benefits

8. Why do we do all these ?
 Business is changing
 Business Scenario is changing
 People expectations are changing
 Stiff Competition in Business
 Globalization
 Globally Competitive
 Acquisitions and Mergers
 Talent attraction
 Talent Retention
 Talent Import

9. Why do we do all these ?
 Earlier Paternalistic role played by Govt
organization
 Changed Scenario to Perform to survive
and grow

10. Best Practices
 “Best Practices” is not a designation
limited to small and exclusive Companies.
Often, the most useful ideas come from
Companies that are faced with critical
problems and are forced to find a solution.
A best practice should be able to
demonstrate a positive impact on
Company financial performance, customer
satisfaction and/or employees satisfaction.

11. Best Practices
 Improve Company bottom line financial
performance
 Enhances customer satisfaction
 Strengthens the relationship between the
Company and its employees

12. How is it determined
 Legislations by Government
 Compensation surveys
 Crises
 Creativity
 Leaders
 Paying Capacity
 Industry wise / region wise
 Non profit organization
 NGOs
 Trusts

13. Wages
 May be classified as :
 Minimum wages
 Living Wages
 Fair wages
 Competitive wages
 Luxury wages

14. Labour Legislations
 Minimum Wages Act – 1948
 Minimum Wages rules – different States
 Minimum Wages for different Industries
and different skills.
 Minimum wages for different Zones in the
same State
 Social security Acts like PF, ESI, WC Act,
MB Act, Gratuity Act. LWF Act etc,.

15. Labour Legislations
 Basic
 Dearness Allowance
 HRA
 Conveyance Allowance
 City Compensatory Allowance

16. Compensation surveys
 Industry wise comparisons
 Region wise comparisons
 Skill wise comparison
 Law of Demand and Supply
 Paying Capacity of the Organization
 Special perks to retain talented employees

17. How is it implemented
 Forced to be implemented by legislations
 Timing
 In some company where Unions are prevailing –
by way of negotiations and settlements – either
long term or short term
 Based on paying capacity in one phase or in
phased manner
 Rewards for exceptional people
 Law of demand and supply
 Crises

18. Thank you
B N Nagaraj