Compensation and Performance Management

In: Business and Management

Submitted By ryanbb
Words 1540
Pages 7


(9.00 AM – 12.00 PM)


ESSAY TYPE QUESTIONS Answer ANY FOUR (4) questions from the following SEVEN (7) questions.

QUESTION 1 1. Achieving external and internal fit are important requirements in the design of effective compensation systems.

a) Explain how analysis of the macroeconomic environment can help achieve ‘external fit’ in the compensation package ( 10 marks)

b) Discuss using suitable illustrations, the main benefits of internally aligned pay structure ( 15 marks)

(Total Marks = 25 marks)


Discuss the main features of the following compensation theories.

a) Compensating Differentials Theory ( 9 marks) b) Efficiency-wage theory ( 8 marks) c) Signaling ( 8 mark (Total Marks = 25 marks)


What are the main factors that need due consideration to ensure the design and delivery of an effective expatriate compensation package that addresses the national and regional differences within Multinational Corporations?

(Total Marks = 25 marks)



Similar Documents

Compensation Management

...ISSN 1822-6760. Management theory and studies for rural business and infrastructure development. 2010. Nr. 5 (24). Research papers. CRITICAL ISSUES FOR COMPENSATION AND INCENTIVES MANAGEMENT: THEORETICAL APPROACH Ramunė Čiarnienė, Milita Vienažindienė Kaunas University of Technology, Vilnius Co-operative College For most people, pay is a primary reason for working. Indeed, compensation is at the core of any employment exchange, and it serves as a defining characteristic of any employment relationship. The study focuses on critical points of compensation and incentives management. The fundamentals of a good incentive program include the elements of vision, potential, communication and motivation and can be realized if incentive promises are fulfilled – by both employer and employee. The aim of the paper is to identify the most important attributes of compensation and incentives management. Research method is the analysis and synthesis of scientific literature, logical, comparative and graphic representation. On the base of analysis, authors of this paper present the model of incentive system for positive employee attitudes and behaviors. Keywords: compensation, employees, incentives, management. Introduction Compensation refers to all forms of financial returns and tangible services and benefits employees receive as part of an employment relationship. Pay may be received directly in the form of cash (e.g., wages, merit increases, incentives, cost of living adjustments)......

Words: 2728 - Pages: 11

Compensation Management

...Compensation Management HR 434 “Conducting Job Evaluations” by Carmen Campbell for Professor David Gebhardt My position pays what? How does my job rank among other jobs in the area? Responsibilities which encompass a job determines compensation, from which, a company will pay an employee’s for their time, skills or services used to complete assigned work. Job evaluation consists of factors which describe the responsibilities required of a particular job and the value the company has assigned to factors the employee accomplishes. As an employer and an employee understanding the factors associated with job evaluation are important to determine if the responsibilities and pay are associated with services provided are fair. For simplicity we will use the following factors to compare two evaluation methods: skill, effort, responsibility and working condition. (U.S. Equal Employment Opportunity Commission, 2010). The way a company choses their pay scales vary; however we will compare the Hay Method and the Factor Evaluation System. Job evaluation encompasses numerous areas of a job and the skills factor is a starting point for a company to determine importance of skills possessed by the employee. Skills refer to required abilities to accomplish assigned tasks. Skills are “measured by factors such as the experience, ability, education, and training required to perform a job.” (U.S. Equal Employment Opportunity Commission, 2010). Skills required can......

Words: 1922 - Pages: 8

Compensation Management

...mpensation management Disclaimer This document contains a collection of online assignment questions intended solely for the use of the SCDL students. If you are not the intended recipient, please delete the document. This document may contain viruses. I have taken every reasonable precaution to minimize this risk, but not liable for any damage you may sustain as a result of any virus in this document. You should carry out your own virus checks. Please note that this document is susceptible to change and I shall not be liable for any improper, untimely or incomplete transmission. I have taken every reasonable precaution to make sure that the questions from other subjects do not creep in. If this happens without my knowledge, please ignore it and bring it to my notice so that I can rectify it at the earliest. I do not guarantee the occurrence of these questions in your FINAL EXAMINATIONS. Thank you for all the support. *********************************************************************************************************************************************** Multiple Answer Question Extent of employees turnover depends upon :- Correct Answer Physical conditions within organisation , Type of industry , Male to female ratio True/False Question Performance standards & norms for incentive payments should be set up high for better results. Correct Answer False Multiple Choice Multiple Answer Question E.S.I. Act aims at providing...

Words: 6355 - Pages: 26

Compensation Management

...COMPENSATION MANAGEMENT Compensation is a key factor in attracting and keeping the best employees and ensuring that organization has the competitive edge in an increasingly competitive world. The Compensation Management component enables one to differentiate between one’s remuneration strategies and those of his competitors while still allowing flexibility, control and cost effectiveness. It provides a toolset for strategic remuneration planning that reflects organization culture and pay strategies, and it empowers line managers within a framework of flexible budget control. Compensation Management allows one to control bottom-line expenditures and offer competitive and motivating remuneration, be it fixed pay, variable pay, stock options, merit increases, or promotion – in other words, total compensation. In brief, it includes     Create centralized and decentralized budgets Plan and administer compensation adjustments at the manager level Plan and administer compensation adjustments within budget Performing Job Pricing Define pay grades and salary structures to identify the internal value of jobs and positions in your organization  Administer long-term incentives. FEATURES Compensation Management comprises the following components: Job Pricing This component uses to store and manipulate results from external job evaluation systems, and data from external marketing surveys. This data can be used as a starting point for building salary structures associating with jobs......

Words: 4526 - Pages: 19

Compensation Management

...| | Compensation is the remuneration received by an employee in return for his/her contribution to the organization. It is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees.Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness. Components of Compensation System Compensation systems are designed keeping in minds the strategic goals and business objectives. Compensation system is designed on the basis of certain factors after analyzing the job work and responsibilities. Components of a compensation system are as follows:                        Types of Compensation Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off, etc. Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organizational productivity. Direct Compensation     Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances,......

Words: 948 - Pages: 4

Compensation Management

...Manager: * Hires, trains, and motivates all Department managers.  * Directs and monitors all management or supervisory personnel functions and completes formal performance evaluations of all department managers.  * Meets with the comptroller/office manager monthly to review departmental forecasts for consistency with the annual forecast.  * Meets with managers individually to develop monthly and annual goals and objectives, and to review actual performance.  * Monitors the daily operating control (DOC), recommending improved courses of action where necessary. * Ensures that the monthly financial statement is complete, accurate, and submitted on time to the factory.  * Develops and maintains a good working relationship with lending institutions and manufacturer personnel.  * Communicates management policies and procedures to all employees and ensures that they are understood and followed.  * Provides enthusiastic leadership to help shape employees' attitudes and build morale.  * Holds regularly scheduled managers meetings to ensure that every department is operating efficiently and profitably.  * Reviews all requests for training, approves those which are appropriate and consistent with the dealership's goals for professional/technical ability and advancement, and monitors their effectiveness.  * Reviews and approves compensation plans for all employees.  * Resolves any customer complaints that department managers are unable......

Words: 3116 - Pages: 13

Compensation Management

...East West University TERM PAPER On Compensation strategy of RAHIMAFROOZ HRM412 Submitted to: SSM Sadrul Huda Assistant Professor Department of Business Administration Submitted by: Mahbuba Chowdhury 2004-3-10-013 Sec-01 Md. Tarekul Islam 2005-2-10-161 Sec-01 Shamsun Nahar Airin 2005-2-10-231 Sec-02 Tangina Jesmin 2005-3-10-029 Sec-02 Date of Submission: 14.08.2008 Acknowledgment At first we present our due regards to the Almighty, who has provided us the brilliant opportunity to build and complete this term paper successfully with good health & sound mind. We would like to acknowledge our instructor SSM Sadrul Huda for his guidance starting to data collection and preparing for the writing; our regards and heartfelt thanks to him. Moreover, we are grateful to our administration as they provide us with the facility to use computer lab for browsing net & study room for teamwork. May be it would have been impossible to finish the report in time if we didn’t get the facility. Letter of Transmittal August 10, 2010 SSM Sadrul Huda Assistant Professor Dept of Business Administration East West University 45 Mohakhali C/A, Dhaka 1212 Dear Sir, Here is the term paper that you have asked us to prepare as a group for our course Compensation Management (HRM- 412). We have done group work for this term paper and did it as per as the rule. We are......

Words: 4510 - Pages: 19

Management Compensation

...For organisations to achieve their goals, it is important that management control systems motivate managers and influence their behaviour to align their goals with the goals of the organisation (goal congruence). This can be achieved by reward and incentive systems because managers will tend to focus on the activities that are rewarded. Research have shown that people will be more motivated by the potential of earning rewards than by the fear of punishment. A managers total compensation package consists of salaries, benefits and an incentive compensation. Incentive compensation plans are divided into short-term and long-term plans. Under a short-term plan, managers are usually paid in cash. The total amount that can be paid out to employees in a given year is called the “bonus pool” and relates to the overall profitability in a current year. Bonus pools can be established setting the bonus equal to a set percentage of the profits or base bonuses on profitability relative to the industry. Under the short-term plan, some organisations might follow a deferred compensation plan, which spreads out the payments to managers over a period of years. Advantages of this are that managers can estimate their cash income for the year and even after retiring, the manager will continue to receive payments for a number of years. However, the payments may not relate to the performance in the year it was earned. With long-term plans, for an example, managers are usually given the......

Words: 1282 - Pages: 6

Compensation Management

...Compensation management theories Reinforcement theory Reinforcement theory proposes that you can change someone’s behavior by using reinforcement, punishment and extinction. Rewards are used to reinforce the behavior you want and punishments are used to prevent the behavior you do not want. Extinction is a means to stop someone from performing a learned behavior. Reinforcement is a behavioral construction where control is achieved by manipulating the consequences of behavior. A business manager using reinforcement theory might employ reward for desirable behavior by staff and punishments for undesirable behavior to help steer employees toward intended performance goals. Reinforcement theory states that a response followed by a reward is more likely to recur in the future (Thorndike's Law of Effect). The implication for compensation management is that high employee performance followed by a monetary reward will make future high performance more likely. By the same token, high performance not followed by a reward will make it less likely in the future. The theory emphasizes the importance of a person actually experiencing the reward. TYPES OF REINFORCEMENT Positive Positive reinforcement results when the occurrence of a valued behavioral consequence has the effect of strengthening the probability of the behavior being repeated. The specific behavioral consequence is called a reinforcer. Example, sales person that exact extra effort to meet a sales quota......

Words: 666 - Pages: 3

Compensation Management

...tation Compensation Policy Bd Telecommunication Rukana.Ppt Course No: EHRM-521 Course Title: Compensation Management Prepared for Abu Sayef Md. Muntaquimul Bari Chowdhuri Lecturer, Department of Management Studies Faculty of Business Studies Jahagirnagor University Prepared By: Md. Abu Rukana (Std. ID: 2011 3 122 ) Md. Hemayetul Islam (Std. ID: 2011 3 022) Mohammad Khalilur Rahman(Std. ID: 20122394) Ziasmin Akter (Std. ID: 20113286) Content…….. 1. 2. 3. 4. 5. 6. 7. Synopsis of mobile operator in BD Robi Banglalink Citycell Findings Recommendation Q/A Mobile Phone Subscribers in Bangladesh Operators Grameen Phone Ltd. (GP) Active Subscribers(Million) 39.293 Orascom Telecom Bangladesh Limited (Banglalink) 25.490 Robi Axiata Limited (Robi) Airtel Bangladesh Limited (Airtel) Pacific Bangladesh Telecom Limited (Citycell) Teletalk Bangladesh Ltd. (Teletalk) Total 19.211 6.734 1.699 1.358 93.788 Source: BRTA Website Company Overview ROBI…  Axiata (Bangladesh) Limited is a dynamic and leading countrywide GSM communication solution provider  It is a joint venture company between Axiata Group Berhad, Malaysia and NTT DOCOMO INC, Japan. Company Overview ROBI Cont.  On 28th March, 2010 the company started its new journey with the brand name Robi.  It has the widest International Roaming coverage in Bangladesh connecting 553 operators across 207 countries. Compensation plan of ROBI  Salary & Benefit  Monthly salary is......

Words: 484 - Pages: 2

Compensation Management

...enhance the industry. Today, the country’s attractiveness as a manufacturing centre for foreign companies is clear. Despite deceleration in performance in the past few years, the Indian manufacturing industry is now getting back on track to create 3.2 million work opportunities during the 12th Plan period (2012-2017), according to a study by ASSOCHAM. The report found that the sector clocked 28.5% growth in employment generation during the 11th plan (2007-12). "An additional 2.9 million jobs were generated in the registered manufacturing sector during 2007-08 to 2011-12 from over 10.45 million jobs in 2007-08," the ASSHOCAM Report said. Tamil Nadu among all the states is topping the chart with as high as 14.5% share in total jobs generated by registered manufacturing sector across India, with Maharashtra leading the second position with 14% and Gujarat with 10% shares respectively. Meanwhile, Chhattisgarh (19%), Uttar Pradesh (15%), Haryana (14%), Kerala (10.5%) and Punjab (9%) recorded the slowest growth rate in employment generation. The report further says that the Indian manufacturing sector is going through a revival phase. With an improved economic performance, the sector may help in generating about 3.2 million additional manufacturing jobs by 2017. ( Compensation trends According to PayScale’s 2015 Compensation best practices Report - companies are becoming increasingly confident in their ability to thrive after a period of relative stagnation. In......

Words: 1180 - Pages: 5

Compensation Management

...Danielle K. Ellison 22418 15 East Street Mineral, IL 61344 Student ID 21820664 Compensation Management, HRM 210 41200800 People all over the world are paid in numerous forms of payment schedules. “Compensation is payment in the form of salary or wages” (1). “A salary is a fixed compensation paid for regular services” (2). “A wage is a payment usually of money for labor or services usually according to a contract and on an hourly, daily, or piecework basis “(3). Merriam-Webster listed the fore stated definitions and though they are semi accurate, they are vague and not specific. Here in the United States, from my personal experience and knowledge, I will define these three words. Compensation is the sum of profits you receive from working a job including money and benefits. A salary is the money you make when you work a job, it is a fixed amount more often than not. Wages is how the money you will make is calculated in a paying job. For example, your hourly wage, annual wage, your piecework rate, or your cents per mile rate, are all different way to be paid in numerous different jobs or trades. Annual salaries are given out most often as a form of compensation in high executive positions and management positions. These positions are often very demanding and call for a lot of personal time to dedicate to a position. Often a management position has more work at variable hours. Salary positions are also given to people on call in a certain line of work. In a line of......

Words: 1094 - Pages: 5

Compensation Management

...Compensation Management Q1.a. What is the role of compensation and rewards in modern organization? What arethe advantages of a fair compensation system? Ans1a. Role of Compensation and Reward in Organization: Compensation and Reward system plays vital role in a business organization. Since, among four Ms, i.e Men, Material, Machine and Money, Men has been most important factor, it is impossible to imagine a business process without Men. Land, Labor, Capital and Organization are four major factors of production. Every factor contributes to the process of production/business. It expects return from the business process such as Rent is the return expected by the Landlord. similarly Capitalist expects Interest and Organizers i.e Entrepreneur expects profits. The labour expects wages from the process. It is evident that other factors are in-human factors and as such labour plays vital role in bringing about the process of production/business in motion. The other factors being human, has expectations, emotions, ambitions and egos. Labour therefore expects to have fair share in the business/production process. Advantages of Fair Compensation System: Therefore a fair compensation system is a must for every business organization. The fair compensation system will help in the following: 1. If an ideal compensation system is designed, it will have positive impact on the efficiency and results produced by workmen. 2. Such system will encourage the normal worker to......

Words: 9398 - Pages: 38

Compensation Management

...Compensation and Reward Management UNIT 17 COMPENSATION STRATEGY, STRUCTURE, COMPOSITION Objectives After reading this unit, you should be able to: l appreciate compensation function and objectives; l analyse compensation issues and trends; l assess the characteristics of executive compensation and its determinants; l understand the principles and practices of compensation administration; and l identify the major components of wage structure in India. Structure 17.1 Introduction 17.2 Compensation Issues 17.3 Compensation Function 17.4 Compensation Policies and Objectives 17.5 Compensation Administration 17.6 Compensation Determinants 17.7 Compensation Survey 17.8 Compensation Structure 17.9 Job Evaluation System 17.10 Pay Equity 17.11 Executive Compensation 17.12 Compensation Trends 17.13 Wage Structure in India 17.14 Case Study 17.15 Summary 17.16 Self-Assessment Questions 17.17 Further Readings 17.1 22 INTRODUCTION One of the most difficult functions of human resource management is that of determining the rates of monetary compensation. It is not only complex, but significant both to the organisation and employees. Employee compensation decisions are crucial for the success of an organisation. From a cost perspective alone, effective management of employee compensation is critical because of the total operating......

Words: 6295 - Pages: 26

Compensation Management

...Compensation Management (PACM) Release 4.6C HELP.PACM Compensation Management (PA-CM) SAP AG Copyright © Copyright 2001 SAP AG. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. Microsoft , WINDOWS , NT , EXCEL , Word , PowerPoint and SQL Server are registered trademarks of Microsoft Corporation. IBM , DB2 , OS/2 , DB2/6000 , Parallel Sysplex , MVS/ESA , RS/6000 , AIX , S/390 , ® ® ® AS/400 , OS/390 , and OS/400 are registered trademarks of IBM Corporation. ORACLE is a registered trademark of ORACLE Corporation. INFORMIX -OnLine for SAP and Informix Dynamic Server Informix Software Incorporated. ® ® ® ® ® ® TM ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® ® are registered trademarks of UNIX , X/Open , OSF/1 , and Motif are registered trademarks of the Open Group. HTML, DHTML, XML, XHTML are trademarks or registered trademarks of W3C , World Wide Web Consortium, Massachusetts Institute of Technology. JAVA is a registered trademark of Sun Microsystems, Inc. JAVASCRIPT is a registered trademark of Sun Microsystems, Inc., used under license for technology invented and implemented by Netscape. SAP, SAP Logo, R/2, RIVA, R/3, ABAP, SAP ArchiveLink, SAP Business Workflow,......

Words: 23388 - Pages: 94