Vaishnavi 1

Assignment-4
KMBNHR-04
SUBMITTED TO- SUBMITTED BY-
MR.ROHIT VERMA km vaishnavi
Ques 1. What is Compensation?

Ans. Compensation is the remuneration awarded to an employee in exchange
for their services or individual contributions to your business. The contributions
can be their time, knowledge, skills, abilities and commitment to your company
or a project.
In simpler words, compensation is the money received by an employee from

an employer as a salary or wages.
Compensation is the total cash and non-cash payments that you give to an
employee in exchange for the work they do for your business. It’s typically one of
the biggest expenses for businesses with employees. Compensation is more than
an employee’s regular paid wages. It also includes many other types of wages and
benefits.
Types of Compensation
Compensation doesn’t mean only paycheck, although that’s part of it.
Compensation comprises of a number of different elements that may be cash
and non-cash payments.
Here’s a list of some of the most common and commonly overlooked types of
compensation:
• Base pay (hourly or salary wages)
• Commissions
• Overtime Pay, shift differentials, and longevity pay
• Bonus
• Profit Sharing distributions
• Merit Pay or recognition
• Workers compensation or workmans comp
• Incentive plan or achievement award
• Tip income
• Benefits include Dental, insurance, medical, vacation, leaves, retirement,
etc.
• Stock options
• Travel/Meal/Housing Allowance
• Child care and tuition assistance
• Gym memberships and free lunches
• Employee assistance programs that provide counseling, legal advice,
and other services.
• Health and wellness benefits
• Other non-cash benefits
Ques2- Discuss the compensation system?
Ans- Compensation system plays a very vital role in a business

organization. Since, among four Ms., i.e. Men, Material, Machine
and Money, Men has been the most important factor. It is
impossible to imagine a business process without Men.
In any organization, the compensation system is designed and
incorporated to streamline the activities.
The activities performed by the human resources earn income to

the organization and the organization in turn would reward the
efforts of the human resources in terms of monetary gains or in
kind.
Compensation system tries to ensure fairness in deciding the worth

of the workers and considering promotions or increments.
In designing a compensation system, an organization must value

the equity concept clearly define the wage and salary
differentiations and career growth plans, is as to motivate and
encourage the human resource to perform better.
It is not uncommon for organizations to establish specific objectives

for compensation program me. Formalized compensation goals
serve as guidelines for managers to ensure that the compensation
system achieves its intended purpose.
Ques3. discuss the significance of compensation system?
Ans- Smart employers know that keeping quality employees requires providing the right
compensation and benefits package. Compensation includes wages, salaries, bonuses and
commission structures. Employers shouldn't ignore the benefits portion of employee
compensation and benefits, because the benefits sweeten employment contracts with
the priorities that most employees need.
Attracting Top Talent
People are always looking to put themselves in the best possible position financially. Those
who are worth a specific salary amount often know their value and will seek a position that
pays accordingly. Do research on what your competitor's compensation and benefits
packages look like. Make sure you offer a similar package to your potential employees so
that you attract the best candidates for your company. Hiring the right candidate the first
time reduces recruiting costs and helps free up business owners for other tasks.
Increased Employee Motivation
Properly compensating employees shows you value them as workers and as human beings.
When people feel valued, they feel better about coming in to work. Overall company morale
increases and people are motivated to come to work and do a good job. Additionally, when
employees know there are bonuses or commissions, they are increasingly motivated to
deliver grander results. Bonus and commission compensation plans become a focal point for
success.
Boost Employee Loyalty

When employees are being paid well and are happy, they're likely to stay with the company.
Proper compensation is one factor why employees remain with employers. Loyalty means
that business owners don't need to continue to spend time, money and energy on recruiting
new candidates. Employee retention and lowturnover rates are great for employers who
cultivate a team that knows what to do. That team is also motivated to be part of the team,
and they get the job done well.
Increased Productivity and Profitability

Happy employees are productive employees. Productivity in relation to compensation starts
with employees feeling valued which increases motivation and loyalty. Not only are
employees more motivated to do a good job, but also, the longer people are with the
company, the more they know and the more efficient they become. All of this leads to
increased productivity.
Job Satisfaction So People Stay

Creating the right compensation plan leads to stronger job satisfaction. The right
compensation plan includes benefits, along with all the other bonuses available. Employees
often boast about holiday bonuses or they keenly watch how the company stock performs
because they have stock options. The right compensation program invests employees into
the work being done, which gives them a stronger sense of satisfaction when the company
succeeds. They know they will be rewarded for their efforts; everyone likes to be
appreciated.
Significance of Employee Compensation (Or

Personnel Remuneration):
The issue of personnel remuneration, whether in the form of wages
or salaries, is highly significant from the viewpoint of industrial
relations, social peace and economic implications. In fact, it is the
centre from which the circle of industrial relations is drawn; it being
the crux of industrial conflicts.
Following are some of the points which highlight the

significance of personnel remuneration:
(i) Wages/ salaries constitute the primary source of income
to employees. Their adequacy or otherwise would very
much determine their standard of living.
(ii) Adequate remuneration is a source of motivation to

employees. It makes them committed and loyal to the
organisation; and paves way for excellent industrial
relations.
(iii) (iii) Through making adequate and timely payment of

employee remuneration, an employer can attract and
retain good personnel to and in the organisation. This
helps to ensure a stability of labour force – bringing
several valuable advantages in the its wake for the
organisation.
(iv) (iv) Specially, in labour-intensive industries, wages

constitute a substantial part of the cost of production. As
such wage payments affects the cost and price-structures
of an industrial enterprise. Prices of goods and services,
in turn, have social implications; as these directly affect
the purchasing power of money held by the society.
Ques4- explain the objective of job evaluation and job evaluation

method?
Ans- Everything you need to know about the objectives of job

evaluation. Job evaluation is a methodical way of confirming the
value of job in relation to other jobs in an organisation.
It makes a systematic comparison between jobs to come to a

continuation of their relative expectancy or worth for the purpose
of making a logical pay structure.
According to ILO Report, the aim and objective of job evaluation

system is to establish an agreeable logical basis, the relative values
of different jobs in a particular plant or machinery. For example, it
aims at determining the relation worth of a job.
The basic objectives of job evaluation is to determine the relative
contributions that the performance of different jobs makes
towards organisational objectives.
1. To Analyse the Job Factors and Requirement
2. To Facilitate Comparison and Survey
3. To Facilitate Comparison and Survey
4. To Eliminate Inequalities
5. Determination of Wage Structure
6. Objectivity and Rationality in Wage Structure
7. To Solve Wage Controversies of Job Evaluation
8. To Eliminate Personal Prejudices
9. To Adopt a Definite and Clear Plan for Wage and Salary Administration
10. Standardization of Wage and Salary Rate and
11. Simplification of Rate Structure.

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Assignment-4

Ques 1. What is Compensation?

In simpler words, compensation is the money received by an employee from

Ques2- Discuss the compensation system?

Ans- Compensation system plays a very vital role in a business

The activities performed by the human resources earn income to

Compensation system tries to ensure fairness in deciding the worth

In designing a compensation system, an organization must value

It is not uncommon for organizations to establish specific objectives

Attracting Top Talent

Increased Employee Motivation

Boost Employee Loyalty

Increased Productivity and Profitability

Job Satisfaction So People Stay

Significance of Employee Compensation (Or

Following are some of the points which highlight the

(ii) Adequate remuneration is a source of motivation to

(iii) (iii) Through making adequate and timely payment of

(iv) (iv) Specially, in labour-intensive industries, wages

Ques4- explain the objective of job evaluation and job evaluation

Ans- Everything you need to know about the objectives of job

It makes a systematic comparison between jobs to come to a

According to ILO Report, the aim and objective of job evaluation

2. To Facilitate Comparison and Survey

3. To Facilitate Comparison and Survey

5. Determination of Wage Structure

6. Objectivity and Rationality in Wage Structure

7. To Solve Wage Controversies of Job Evaluation

8. To Eliminate Personal Prejudices

10. Standardization of Wage and Salary Rate and

11. Simplification of Rate Structure.

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