1. HUMAN RESORCE MANAGEMENT
Submitted to:- Submitted by:-
Prof. Randhir Singh Sakshi Lamba.
Shashank Sikka.
Shivani Shahi.
ShubhamDhawan.
Shoeb Ashraf.
Shariq Khan.

3. Points To Be Considered
Basic Factors Determining pay rates
Legal Considerations in Compensation
Equity and Its Impact on Pay Rates
Establishing Pay Rates
Pricing Managerial and Professional Jobs

4. Basic Factors Determining pay rates
Pay in the form of
Pay in the form of financial benefits such as
1. Direct financial payments wages, salaries, incentives, commissions and 2. Indirect financial payments
insurance
bonuses.

5. Legal considerations in Compensation
 Davis-Bacon Act (1931)
 Walsh-Healey Public Contract Act (1936)
 Fair Labor Standards Act (1938)
 The Family and Medical Leave Act
 Equal Pay Act (1963)
 Employee Retirement Income Security Act (ERISA)
 The Social Security Act of 1935 (as amended)
 Americans with Disabilities Act
 Age Discrimination in Employment Act

6. Equity and Its Impact on Pay Rates
External Equity
Internal Equity
Individual Equity
Procedural Equity

7. Establishing pay rates
Group similar
Conducting
Job evaluation jobs into pay
salary survey
grades
Price each pay
grade by using
wave curves

8. Pricing Managerial And Professional Jobs
Base
Pay
Compensati
ng
Long-Term Short-term
Executives
Incentives Incentives
and
Managers
Executive
Benefits and
Perks

9. Competency based Pay
Competency based pay is where the company pays for the
employee’s range, depth, and types of skills and
knowledge, rather than for the job title he or she holds. We
can simply define competencies as “demonstrable”
characteristics of the person, including knowledge, skills, and
behaviors, that enable performance.

10. Competency-Based Pay (cont’d)
Support High-
Performance
Work Systems
Support Support
Strategic Performance
Aims Management
Why Use
Competency-
Based Pay?

11. SPECIAL TOPICS IN COMPENSATION
• Broadbanding
Consolidating salary grades and ranges into just a
few wide levels or “bands,” each of which contains a
relatively wide range of jobs and salary levels.
 Benefits
• More flexibility in assigning workers to different job
grades.
• Provides support for flatter hierarchies and teams.
• Promotes skills learning and mobility.

12. Comparable worth
Comparable worth refers to the requirement to pay men and
women equal wages for jobs that are of comparable (rather
than strictly equal) value to the employer. Thus, comparable
worth may mean comparing quite dissimilar jobs, such as
nurses to truck mechanics or secretaries to technicians.

13. Board Oversight of Executive Pay
• Boards of directors ( board compensation committee usually
make executive pay decision in large firms) ask themselves
these question:
 Has our compensation committee thoroughly identified its duties and
processes?
 Is our compensation committee using the appropriate compensation
advisors?
 Are there particular executive compensation issues that our committee
should address.
 Do our procedures demonstrate diligence and independence?
 Is our committee appropriately communicating its decisions? How will
shareholders react

14. Automating compensation administration
Today, companies more often used server based intranet
compensation planning programs to keep track of who can
spend what, and who is spending what. This web based
method has many advantages. The employer can quickly
update its compensation programs (such as how much is
available, and how much can each manager allocate for
various criteria) without having to modify the software on
individual manager’s computers. And automating the system
reduces costs by eliminating manual processes. a
compensation administration system that is compatible with
the employer’s HRIS can also automatically administer other
pay actions, such as updating employees pay checks.

16. MONEY AND MOTIVATION :AN INTRODUCTION
Financial rewards
paid to workers Financial
whose production Incentives By
exceeds some Frederick
predetermined Taylor
standard.
Systematic soldiering-The Fair day work-standards of
tendency of employees to work output which employees
at the slowest pace possible should device for each job
and to produce at minimum based on careful scientific
accepted level. analysis.

17. CLASSIFICATION OF MOTIVATION THOERY
The Hierarchy
of needs
Motivators Expectancy
& Demotivators Reinforcement
& Theory
Abraham & &
Frederick &
Maslow Edward Deci B.F. Skinner
Herzberg Victor Vroom

18. THE HIERARCHY OF NEEDS
According to this theory, individual strives to seeks higher needs when the lower
needs are fulfilled.
Types of needs
Physiological Safety
(food,water,warmth) (a personal security ,health, well-
being)
Belonging Self-esteem
(friendships,camaraderie) (respect)
Self-actualization
(becoming the person you believe you can
become)

19. MOTIVATORS
Herzberg theory conforms with satisfaction theories which assert that “a satisfied
employee tends to work in the same organization but this satisfaction does not
always result in better performance.
Two Factors In Theory
• They are extrinsic that satisfy
the person’s lower level
Hygiene needs.
Factor • Factors such as salary or
remuneration,job security.
• They are intrinsic that satisfy
the person’s higher level
needs.
Motivators • Factors such as sense of
achievement or recognization.

20. DEMOTIVATORS
This theory highlights potential downside to relying too heavily on extrinsic
rewards .
Extrinsic rewards could at time actually
detract from the person’s intrinsic
motivation
Managers should be cautious in devising
incentive pay for highly motivated people.

21. EXPECTANCY THEORY
In this,people will pursue rewards they desire when they believe that they are
likely to be successful in obtaining the rewards.
 Motivation = ExIxV
 Function of motivation are:
Expectancy valence Instrumentality

22. REINFORCEMENT
Behavior modification means changing behavior through rewards or punishments
that are contingent on performance.The two principles:
Positive behavior tends to be repeated
while negative behavior tends not to be
repeated.
Manager can get someone to change
his/her behavior by providing properly
schedule rewards.

23. INDIVIDUAL EMPLOYEE INCENTIVES
Piecework plans: Piecework is a type of incentive program where by
the employee is paid based on each unit of output.
• A fixed sum is paid for each unit the worker
produces under an established
Straight Pro
piecework • Equitable,powerful
incentive.
Cons
• Possibility of violating
minimum wage
• The worker gets a premium equal to the
standard.
Standard percent by which his or her work
performance exceeds the established
hour plans standard.

24. Individual Employee incentives (cont’d)
Merit Pay Option
Merit Pay Annual lump-sum merit raises
is a form of reward in which individuals receive permanent pay that do not make the raise part
increases (i.e.,raises) as a function of their individual performance of an employee’s base
ratings salary.Merit awards tied to
both individual and
organizational performance
Professional Employees Recognition –Based Award
It involves application of It involves Recognition
learned knowledge to the program
solution of the employer’s Social Recognition program
problems. Performance feedbacks

25. INCENTIVE FOR SALESPEOPLE
Salary
Plan
Combination
Plan
70%+30%
Commission
Plan

26. INCENTIVES FOR MANAGERS &EXECUTIVES
SOX ACT 2002 (Sarbanes-Oxley Act)
This act was passed by congress to inject a higher
level of responsibilities into executives and board
members decisions.
The act also
CEOs CFOs
requires
of a public company to repay any bonuses,
incentives or equity based compensations
received from company during the 12 months
following the issuance of the financial statement
that the company must restate.

27. THE ANNUAL BONUS
Short-Term Incentives:
 Eligibility-Basic eligibility are job level, job title or
salary. The percentage size of bonus is 40% for
senior mangers 25-30% for middle level
managers and 10-15% for supervisors.
Fund Size- There are no hard and fast rules about
the proportion of profits to pay out. The act
allows employers to pay bonus from the allocable
surplus fund, which are called as the set on and
set off methods.

28. THE ANNUAL BONUS(contd.)
 Individual Performance- The basically sets a
target bonus for each eligible positions. The
actual award then reflects the managers
performance.
One complication is whether
managers will receive bonuses based on
Individual Performance, Corporate
Performance or both. Two main concepts in
this part are
Spilt-award
plan Multiplier
method

29. LONG TERM INCENTIVES
They are like GOLDEN HANDCUFFS as they
motivate executives to stay with company by
letting them accumulate capital that they can
only cash in after a certain number of years.
It Includes the following
main things
Stock Stock
options problems
Rewards managers
Specific no. of
with lack luster
shares.
performance.
Blame the stock
Specific price and options for
period. contributing to
corporate scandals

30. HOW TO DESIGN TEAM INCENTIVES
Firms Increasingly rely on teams to manage their
work . They therefore need incentives plans that
encourage team work and focus team members
attention on performances
Team Based
• Piece Rate Incentive • Pay how well the best
• Standard Hour Plan team member does
• To pay the entire
• This concept failed in
team
case of Levi’s.
Engineered Best Team Member
Standards Incentive

31. VARIABLE PAY PLANS
Profit
sharing
plan
Scanlon
plan
Employees
Gain
stock
sharing
ownership
plan
plan

32. WHY INCENTIVES PLANS FAIL?
Performance pay can’t replace good
management.
You get what you pay for.
Pay is not a motivator.
Rewards punish.
Rewards rupture relationships.
Rewards can have undermine responsiveness.
Rewards undermine intrinsic motivation.

33. Link the
incentive with
Managers can your strategy. Make sure
ask and
the program
motivate the
is
employees.
motivational.
How to
implement
effective
incentive
plans?
Financial
incentives Non-financial
incentives

34. INCENTIVES PLAN IN PRACTICE:
NUCOR
Largest steel producer in the united states, also has
highest productivity, wages and lowest labour cost.
Employees earn bonus of 100%or more of base
salary and all Nucor employees participate in one
four performance based incentive plans.
Finally under the senior officer incentive plans
Nucor senior managers get bonus based on
Nucor’s annual overall percentage of net income
to stockholders equity.

36. Purpose of this Chapter
To weigh pros and cons of various employee benefit plans
Benefits
Indirect financial and non-financial
payments employees receive for continuing
their employment with the company

37. Types of employee benefit plans
Services and
Pay for time not Insurance Retirements
Family – Friendly
worked Benefits Benefits
Benefits

38. Pay for Time Not Worked
Also known as supplemental pay benefits
Examples include:
• Holidays
• Sick leave
• Parental leave
Proper leave records should be kept by employers

39. Pay for Time Not Worked
Vacation
and holiday
Sick leave
Parental
leave
Severance • A one-time payment when terminating an employee.
pay • Reasons for granting severance pay:
• Acts as a humanitarian gesture and good public relations.
• Mirrors employee’s two week quit notice.
• Avoids litigation from disgruntled former employees.

40. Insurance Benefits
• Provides income and medical
benefits to work-related
accident victims or their
dependents, regardless of
fault.
• Death or disability: a cash
Workers’ benefit based on prior
earnings.
compensation • Controlling worker
compensation costs
(monetary or • Screen out accident-prone
workers.
medical) • Make the workplace safer.
• Thoroughly investigate
accident claims.
• Use case management to
return injured employees to
work as soon as possible.

41. Insurance Benefits
Hospitalization, health, and disability
insurance
Health maintenance organization (HMO)
• A medical organization consisting of specialists operating out of a
community-based health care center.
• Provides routine medical services to employees who pay a nominal
fee.
• Receives a fixed annual contract fee per employee from the
employer (or employer and employee), regardless of whether it
provides that person with service.

42. Insurance Benefits
Life insurance
• Most employers provide
group life insurance plans.
• Employees can obtain lower
rates in a group plan.
• Employer usually pays 100
percent of the base
premium; the employee
pays for any additional
coverage.

43. Retirement Benefits
Pension • Financial programs that provide a fixed amount
when employees reach a predetermined
retirement age or when they can no longer work
plans due to disability
Social • Vary from country to country
• In Malaysia: Social Security Act – insurance system
security to cover employees’ work-related accidents and
illness
• In other countries – provides income for
plans retirement

44. Services and Family-Friendly Benefits
Personal services:
Social and recreational facilities
Transport and food:
Subsidies, in-house canteens, company vehicles
Education subsidy:
Tuition refunds
Family-friendly benefits:
Child care, elder care, fitness facilities, flexible work schedules

45. Flexible Benefits Programs
The cafeteria (flexible benefits)
approach
• Each employee is given a benefits fund
budget to spend on the benefits he or she
prefers.
• The fund limits the total cost for each
benefits package.
• Core plus option plans establish a core set
of benefits which are mandatory for all
employees.
• Flexible spending accounts
• Enable employees to pay for medical and
other expenses with pretax dollars by
depositing funds in their accounts from
payroll deductions.

46. Flexible Benefits Programs
The cafeteria (flexible benefits) approach (cont’d)
• Pros
• Employees can choose the package that suits them
best
• Easier to introduce new benefits since company does
not need to lock them in for all new employees
• Cons
• Additional admin cost as company has to periodically
update each employee’s package

47. Flexible Work Arrangements
Flextime Job sharing
Compressed Teleworking
workweek

48. Flextime
Workers can arrange
their own starting and
stopping hours before
A plan whereby and after the core
employees’ workdays period.
are built around a core • Positive effects on employee
of mid-day hours when productivity, job
all workers are required satisfaction, satisfaction
to be present. with work schedule, and
employee absenteeism.
• Positive effect on
absenteeism was much
greater than on productivity.

49. Compressed Workweek
Non-
conventional • Example –
pilots, doctors, nurses
5-day, 40-hour etc.
workweek
• Less disruption from
shift changes
Increase • Longer time-off-work
productivity periods
• Reduced absenteeism

50. Other Flexible Work Arrangements
• Job sharing
– Allowing two or more people to share a single
full-time job.
• Teleworking
– Employees work from home using telephones
and the Internet to transmit letters, data, and
completed work to the home office.
– Allows employees to manage work and family
responsibilities

51. Flexible Benefits
• Objective: To meet the diverse needs of
employees
• Advantages:
– Encourage responsible usage by employees
– Reduce wastage of benefits not fully utilized
– Employees appreciate perks better because they are
more aware of the dollar value of benefits
• Disadvantages:
– Extra cost
– More administrative work as plan may be
complicated

52. Flexible Benefits
• A typical flexible benefits plan includes several basic
features:
– Core benefits
• offered to ensure basic needs provided – include insurance and
medical benefits, and they are compulsory
– Credit Point/”Spending Dollars”
• Used to buy optional benefits or obtain reimbursements
• Points not used up may be exchanged for cash
• A typical flexible benefits plan includes several basic
features: (cont’d)
– Optional benefits
• Can be bought with credit points
• Some examples are vacation days, magazine subscription, parents’
medical expenses, tuition refund, child care subsidy, health screening
etc.
– Spending Account
• Assigned to each employee to keep track of allocated points and those
used up

53. Flexible Benefits
• Introducing a Flexible Benefits Plan:
– Employee views are important even at planning stage
• Designing committee can understand the individual needs and preferences
– Company to explain the scheme and advise on how to choose
the various optional benefits
– Employees given option to keep existing benefit scheme:
• To remove fear that company is forcing all employees to accept new scheme
• New scheme is an excuse to cut costs
• 1993 Survey on Employee Benefits (based on responses from 300
companies in private sector)
– To examine company practices on employee benefits
– To assess the perception of labor and management on employee
benefits
– To study the relationships between benefits and
productivity, commitment, and quality of work life
– To examine the trends in employee benefits

54. CONCLUSION
• The economic downturn has put significant fiscal constraints on nearly all public organizations nationwide.
The Board of Commissioners have instructed County Administration to take a conservative approach in its
revenue projections, resulting in a projected shortfall of nearly $26 Million for the 2010/11 budget if
spending continues at past levels. A multi-faceted approach is being taken to bring the budget into
balance, including:
• Revenue Generation
• Reducing the Cost of Doing Business
• Organizational Restructuring
• Collaborations
• Service Level Reductions in both Mandated and Non- Mandated Programs
• Elimination of Non-Mandated Programs.
• Employees benefits and compensation.
• Employee Compensation & Benefits Workgroup), discussions at Labor Management Team meetings as
well as through employee suggestions raised at Town Hall Sessions or through Central. These options were
categorized as follows:
• Number of Positions
• Salaries & Work Hours
• Life insurance
• Benefits Medical
• Benefits Retirement
• Benefits Retiree Health Care (VEBA)
• Benefits Other
• Miscellaneous.

55. THANKYOU