Compensation Management

Syllabus

MBAT433: Compensation Management

Unit-I

Introduction: Conceptual Aspects of Compensation and Reward Management; Monetary and Non-monetary Components of Compensation and Rewards; Perspectives and Trends in Compensation and Reward Management. Compensation Philosophies, Compensation Approaches, Decision about Compensation. Economic and Behavioural Theories Related to Wages: Subsistence Theory, Wages Fund Theory, Residual Claimant Theory, Surplus Value Theory, Marginal Productivity Theory, Bargaining Theory; Supply and Demand Theory; Competitive Theory; Employee’s Acceptance of Wage Level; Wage and Motivators; Tournament Theory. Concept of Total Rewards.

Unit-II

Job Evaluation: Processes and Schemes: Salient Features of Job Evaluation – Analytical and Non-analytical Techniques – Point Factor Rating; Factor Comparison; Job Classification; Ranking ;Urwick Orr Profile Method; Hay Plan Method; Decision Band Method; Job or Role Matching; Market Pricing; Computer Assisted Job Evaluation.

Unit-III

Wages and Salary Administration: Concepts of Minimum Wage, Living Wage and Fair Wage; Wage Boards; Pay Commissions; Collective Bargaining. Pay Surveys; Determinants for Formulating Wage Structures; Pricing Jobs: Pay Levels; Designing Pay Ranges and Bands; Salary Structures: Graded Salary Structures; Salary Progression Curves; Pay Structure in Practice: Basic Salary, DA, Allowances, Bonus; Fringe benefits and Incentive Schemes. Spot Awards. Team Incentives; Design of a Pay Rollsystem (Using Accounting Software). Legal Constraints on Pay System.

Unit-IV

Compensation Strategies: Job Based Pay, Skill Based Pay, Competency Based Pay, Market Based Pay, Pay for Position; Pay for Person; Pay for Performance: Variable Pay; Rewarding Excellence; Creating the Strategic Reward System. Best Practices in ‘Pay for Performance’. Compensation as a Retention Strategy.

Unit-V

Rewarding Performance and Executive Compensation: Individual-Based Compensation; Team-Based Compensation; Incentives: Types of Incentive Plans: Taylor’s Differential Piece Rate System, Halsey Premium Plan, Rowan Premium Plan, Emerson Efficiency Premium Plan, Gantt Bonus Plan, Bedaux Premium Plan, Merrick Piece Rate System, Commission System; Gain Sharing Plans: Scanlon Plan, Rucker Plan, Improshare, Value Added; Profit Sharing Plans and Cafeteria Plan. Employee Benefits and Pensions. Policies and Practice of Benefits; Strategic Perspectives on Benefits, Goals for Benefits, Benefits Need Analysis, Principal Types of Benefits; Stock Option and Purchase Plans Using ESOP Compensation. Pension-Understanding Kinds of Pension. Agency Theory and Executive Compensation; Principles of Executive Compensation; Factors Affecting Executive Compensation; Models of Executive Compensation: Optimal Contracting Model; Managerial Power Model; Trends of Executive Compensation in India and Abroad.