INTRODUCTI

ON
COMPENSATION PAYMENT

DEFINATION OF COMPENSATION :
COMPENSATION MAY BE DEFINED AS ,
“MONEY RECEIVED IN THE PERFORMANCE OF WORK ,
PLUS MANY KINDS OF BENEFITS AND SERVICES THAT
ORGANIASATION PROVIDE TO THEIR EMPLOYEES”
SALARY SLIP

DETAILS OF COMPENSATION PACKAGE :

1)WAGE / SALARY
2)INCENTIVE
3)FRINGE BENEFITS
4)PERQUISITES
5)NON-MONETARY BENEFITS
FRINGE BENEFITS :
MEANING :

 IN ADDITION TO REGULAR WAGES ,ALLOWANCES

AND BONUS PAYMENT, INDEUSTRIAL WORKERS
ARE GIVEN OTHER B3ENEFITS AND SERVICES
CALLED “FRINGE BENEFITS”.
 THEY ARE CALLED SO BECAUSE THEY ARE
OFFERED BY THE EMPLOYER AS A “FRINGE”.

 THIS MEANS SUCH BENEFITS ARE

SUPPLEMENTARY TO REGULAR WAGES AND
ALLOWANCES.

DEFINATION :

FRINGE BENEFITS MAY BE DEFINED AS ,

“BROAD / WIDE RANGE OF BENEFITS AND SERVICES
THAT EMPLOYEES RECEIVE AS AN INTEGRAL PART OF
THEIR TOTAL COMPENSATION PACKAGE ”
FEATURES OF FRINGE BENEFITS :

1)DIFFERENT FROM REGULAR WAGES.

2)USEFUL BUT AVOIDABLE EXPENDITURE.
3)NOT DIRECTLY LINKED WITH EFFORTS.
4)BENEFICIAL TO ALL EMPLOYEES
5)VOLUNTARY IN CHARACTER

OBJECTIVES / RELEVANCE OF FRINGE BENEFITS /

WHY FRINGE BENEFITS ARE OFFERED :

1)TO SUPPLEMENT DIRECT REMUNERATION.

2)EMPLOYER PREFERS FRINGE BENEFITS.
3)TO RETAIN COMPETENT EMPLOYEES.
4)TO DEVELOP GOOD CORPORATE IMAGE.
5)TO RAISE EMPLOYEE MORALE.
6)TO MOTIVATE EMPLOYEES.
TYPES OF FRINGE BENEFITS :
1)PAYMENT WITHOUT WORK.
2)CONTINGENT AND DEFERRED BENEFITS.
3)LEGALLY REQUIRED PAYMENTS.
4)MISCELLANEOUS BENEFITS.

FRINGE BENEFITS IN INDIA :

IN INDIA FRINGE BENEFITS INCLUDE :

FRINGE
BENEFI
TS

STATUTATO VOLUNTARY
RY FRINGE FRINGE
BENEFITS BENEFITS
PERFORMANCE LINKED INCENTIVE :
MEANING :
 THE WAGE PLAN / INCENTIVE PLAN SHOULD BE
HIGHLY INCENTIVE . THIS MEANS IT SHOULD
ENCOURAGE WORKERS TO TAKE MORE INITIATIVE
AND INTEREST IN THE WORK, PRODUCE MORE
AND ALSO EARN MORE.
THE WAGE PLAN WHICH SERVES ALL THESE
PURPOSES IS CALLED “INCENTIVE WAGE PLAN”
 IT MAY BE NOTED HERE THAT INCENTIVE
PAYMENT ARE OVER AND ABOVE REGULAR
WAGES AND ALLOWANCES,INCENTIVES PAYMENTS
IS RELATED TO THE PERFORMANCE OF WORKERS
INDIVIDUALLY

PERFORMANCE + INCENTIVES = PERFORMANCE

LINKED
INCENTIVE
DEFINATION :

 ACCORDING TO THE “NATIONAL COMMISSION ON

LABOUR” :

“WAGE INCENTIVES ARE EXTRA FINANCIAL

MOTIVATION.THEY ARE DESIGNED TO STIMULATE
HUMAN EFFORT BY REWARDING THE PERSON,OVER
AND ABOVE THE TIME RATED REMUNERATION,FOR
IMPROVEMENT IN THE PRESENT OR TARGETED
RESULTS.”

 ACCORDING TO “G.K. SURI” :

“A WAGE INCENTIVE SCHEME IS ESSENTIALLY A

MANAGERIAL DEVICE OF INCREASING A WORKER’S
PRODUCTIVITY.SIMULTANEOUSLY,IT IS A METHOD OF
SHARING GAINS IN RPODUCTIVITY WITH WORKERS BY
REWARDING THEM FINANCIALLY FOR THEIR
INCREASED RATE OD OUTPUT”
TYPES OF INCENTIVE PLANS :

a)INDIVIDUAL INCENTIVE PLAN

b)GROUP INCENTIVE PLAN

HALSEY PREMIUM PLAN :

MEANING :
HALSEY PREMIUM PAYMENT PLAN WAS SUGGESTED BY
“F.A. HALSEY” , AN AMERICAN EXPERT. IN HIS PLAN
,HALSEY SUGGESTED A COMBINATION OF “TIME RATE”
AND “PIECE RATE”.IN HIS PLAN A WORKER IS GIVEN
GUARANTEE OF MINIMUM WAGE AS PER THE TIME
RATE. IN ADDITION HE WILL BE PAID MORE FOR HIS
EFFICIENCY OR EXTRA EFFORTS IN THE CONDUCT OF
PRODUCTIVE ACTIVITIES.

FEATURES OF GOOD INCENTIVE PLAN :

1)SIMPLICITY
2)ENCOURAGES INITIATIVE
3)DEFINITENESS AND FLEXIBILITY
4)PROMPT PAYMENT
5)PROPERLY COMMUNICATED TO EMPLOYEES
6)WIDE COVERAGE AND EQUITABLE
ADVANTAGES OF PERFORMANCE LINKED INCENTIVE
PLAN :

1)INDUCEMENT AND MOTIVATION

2)STANDARD OF LIVING OF EMPLOYEES
3)PRODUCTIVITY OF WORKERS
4)OPTIMUM UTILISATION OF RESOURCES
5)ATTRACTIVE AND PROFITABLE FOR MANAGEMENT

DISADVANTAGE OF PERFORMANCE LINKED INCENTIVE

PLAN :

1)DETERIORATE IN QUALITY OF PRODUCTION

2)DIFFICULTY OF NEW METHODS AND MACHINE
3)INCREASE IN REGULAR WAGE PAYMENT
4) PHYSICAL CAPACITY OF EMPLOYEES AFFECTED
5)GOOD RELATIONS AND TEAM SPIRIT AFFECTED
CONCLUSION