HRM Module-5
HRM Module-5
HRM Module-5
3. Bene ts:
• Bene ts are non- nancial rewards provided to employees in addition to their base
salary. These may include health insurance, retirement plans (such as pensions or
401(k)), paid time off (vacation, sick leave), disability coverage, life insurance, and
other perks like employee discounts or wellness programs.
4. Equity-Based Compensation:
• Equity-based compensation refers to providing employees with ownership interests
in the company, such as stock options, restricted stock units (RSUs), or equity
grants. This aligns employees' interests with the success of the organization and
may provide long-term nancial rewards as the company's value increases.
Organizations strive to develop compensation strategies that attract and retain top talent,
motivate high performance, align with organizational objectives, and ensure internal and
external equity. By offering competitive and fair compensation packages, organizations can
create a positive work environment, improve employee engagement, and drive overall
business success.
1. Job Evaluation:
• Conduct a job evaluation process to assess the relative value and worth of each job
role within the organization. Job evaluation methods, such as point-factor or job
ranking systems, are used to measure job factors like skills, responsibilities,
complexity, and required quali cations.
2. Market Analysis:
• Conduct a market analysis to gather information on prevailing compensation rates
and practices in the relevant industry and geographic location. This helps determine
the competitive positioning of the organization's pay levels and ensures market
competitiveness.
It's important to note that designing and administering a wage and salary structure should
comply with applicable labor laws, regulations, and industry standards to ensure fairness,
non-discrimination, and legal compliance. In addition, involving key stakeholders, such as
HR professionals, management, and employee representatives, can contribute to the
effectiveness and acceptance of the structure within the organization.
International Compensation
International compensation refers to the practices and strategies organizations use to
determine and administer employee pay in a global context. It involves designing and
implementing compensation programs that consider the unique factors and challenges
associated with managing employees across different countries and cultures. Here are
some key considerations and approaches for international compensation:
1. Market Differentials:
• Take into account the variations in cost of living, labor market conditions, and
economic factors across different countries. Conduct thorough market research to
understand the local compensation practices, benchmarks, and legal requirements.
4. Compensation Components:
• Assess the appropriate mix of compensation components for international
employees. These may include base salary, allowances, incentives, bene ts, and
equity-based compensation. Consider local norms and preferences, as well as the
need to attract and retain talent.
6. Expatriate Compensation:
• Develop compensation packages speci cally for expatriate employees who are
assigned to work in a foreign country. This may involve providing additional bene ts
and allowances to compensate for the challenges and costs associated with living
and working abroad.
Incentives
Incentives refer to additional rewards or bene ts that organizations offer to employees as a
means of motivating and recognizing their performance, achievements, and contributions.
Incentive programs are designed to encourage employees to go above and beyond their
regular job duties and achieve speci c goals or targets. Here are some common types of
incentives used in organizations:
1. Monetary Incentives:
• Cash Bonuses: One-time cash payments awarded to employees for achieving
speci c performance targets or outstanding results.
• Commission: A percentage of sales or revenue earned by employees in sales or
business development roles.
• Pro t Sharing: Distribution of a portion of the company's pro ts among eligible
employees, typically based on predetermined formulas or performance metrics.
• Stock Options: The opportunity to purchase company stock at a discounted price,
allowing employees to share in the company's growth and success.
2. Non-Monetary Incentives:
• Recognition and Awards: Acknowledgment and appreciation of employees'
achievements through certi cates, plaques, trophies, or public recognition in
meetings or company-wide communications.
• Gift Cards or Vouchers: Prepaid cards or vouchers that can be redeemed for
various goods or services, allowing employees to choose rewards that suit their
preferences.
• Time Off: Additional paid time off or extended breaks as a reward for exceptional
performance or reaching speci c milestones.
• Career Development Opportunities: Providing employees with access to training
programs, workshops, conferences, or mentorship opportunities to support their
professional growth and advancement.
3. Performance-Based Incentives:
• Sales Incentives: Rewarding sales teams or individuals based on meeting or
exceeding sales targets, such as bonuses, commissions, or sales contests.
• Performance Bonuses: Providing bonuses or incentives tied to achieving speci c
performance goals or objectives, such as meeting project deadlines, exceeding
productivity targets, or improving customer satisfaction ratings.
• Team Incentives: Encouraging collaboration and teamwork by offering incentives
based on group performance or team achievements.