Always performance based reward structure will lead to win-

win situation.

performance based compensation structure is good but use it

as a developmental tool.The non performers should be
trained rather than linking their reward to performance

50% of the compensation should be the fixed cost, and rest

should be divided in to indivisual + company perfromance as
per the target, which leads in transperence to employer and
employee

according to me,the best type of compensation structure is

to give
salary + commission on sales...(incentives which motivate
employees to do more work)

The Ideal Organizational Structure for

Compensation. - book reviews

An organization's compensation program focuses on two major objectives. First, it must identify the
right pay programs to recognize and reward desired behaviors. Second, it must decide how to organize
work procedures to make the best use of available resources.
In meeting this second objective, an organization must determine whether to manage the compensation
function on a centralized or decentralized basis. This is a complex issue because the management of the
pay program must be consistent with both the strategy of human resources and the mission of senior
management.
A centralized approach is best when an organization seeks to promote a one-company image and has a
single structure and a consistent way of implementing its pay program. This approach enables the
organization to cut down on duplication of activities and lessen an organization's needs for outside
consultants and vendors.
A decentralized approach with an indirect link to corporate headquarters has a total line orientation that
is highly responsive to the demands of the operating units. Under the line manager's direction, each
operating unit runs an independent salary management program. This approach is appropriate for
organizations that have diverse strategic objectives and compete in different markets for both customers
and employees.
Determining the "right" compensation structure for the organization depends on many factors. The
article includes types of questions one might ask in considering how best to organize the compensation
function to support the company's strategy.

The Salary structure varies company to company based on their C & B policies. Some of the common
Pay heads used are

1) Basic - 35% - 50% of Gross

2) HRA - 40% of Basic for Non metro & 50% of basic for Metro

3) Con - Max Rs. 800/ P M which is Max of Rs. 9600 P A

4) Medical Reim - Max Rs. 1250 / PM which can be max of Rs 15000 PA

5) Spl Allow - Balance of Gross will be provided as Spl Allow

Statutory

1) PF

Emp Contribution - 12% on Basic

Emp'r Contribution - 13.61% on basic

2) ESI - Applicable to employees whose Gross Salary is less than or equal to Rs.10000

Emp Contribution - 1.75% on Grorss

Emp'r Contribution - 4.75% on Gross

PT - It Varies State to state

Net Salary = Gross - PF (Emp Cont) - ESI (Emp Cont) - PT

CTC = Gross + PF (Emp'r Cont) - ESI (Emp'r Cont)

Gratuity = Basic *15/26 - It is payable to the employee who completes 5yrs of service in the
organisation. It can be showed as a part of CTC.