MU0015 –Compensation Benefits


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Fall/ August 2012
Master of Business Administration- MBA Semester 4
MU0015 –Compensation Benefits - 4 Credits
(Book ID:1336)
Assignment Set- 1 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1.Describe flexible workforce in detail.
Answer : Thanks to the changing employment situation, today, the average workforce of an organization is far different to that of a few years ago. More and more companies are going for different kinds of employee engagements like temporary staff, consultants, freelancers, contractors, sub-contractors and so on. This brings with it its own particular sets of advantages and disadvantages for organizations. Managing the flexible workforce of a company needs a different set of policies and strategies.
Some of the key reasons or trends for the emergence of flexible workforce below:
1. Retention of women employees:
Over 60 % of women opt out of full-time work within 6-8 years of employment, but 93% of these women want to return to work part-time. Companies that tap into this talent pool by accommodating their request for flexibility in working hours will create a competitive advantage in the labor market.
2. Retirement of baby boomers:
Companies in certain sectors will face a significant skilled labor shortage with a huge number of experienced people eligible for retirement in the next ten years. Many of these baby boomer (people born between 1945 and 1965) employees, however, would prefer working in a flexible capacity rather than going for retirement. Many companies would prefer to retain them on flexi-hours engagement, as they prove to be highly beneficial, especially in the absence of a proper knowledge management system.
3. The Retention of the voluntary workforce: In certain high-tech sectors, many highly skilled employees no longer have to work as they would have earned and saved enough for a life time and are leaving because they are unhappy with a lack of work- life balance. Companies are ready to accommodate their need for flexibility in working hours rather than losing out on highly skilled workforce.

4. Challenges of global teams: Today, due to globalization, more and more people are required to work continuously in order to communicate and collaborate with colleagues around the world. Due to this, people are experiencing a feeling of burnout and employers have no option but think beyond 9 to 5 and implement flexible schedules to accommodate these challenging logistics.
Some of the different types of work arrangements that accommodate a flexible work force below:
Job sharing: Here, the full time job is split between two co-workers and benefits are given in proportion based on the number of hours put in by each employee.
Daily flexible choice: In this the log-in and log-out time may vary daily.
Open flexible choice: In this the employees can choose the total number of hours required to complete the specific task.
Compressed week choice: Here, employees have a choice to work for less than five days in a week.
Comp-off: In this, the employees can extend their timings on busy days and use that later for compensatory time off.

Types of locations:
Satellite options: These are remote work centers like satellite work centers which are provided by the employers.
Telecommuting: Employees work from home for a few days in a week via telecommunications and then work out of office on the remaining days.
Tele working: Employees work from home on all the days of the week via telecommunications.

This flexi-time arrangement has a lot of benefits for both the employers and the employees.

The benefits for the employees are:
Ø  Provides an opportunity for workers who are disabled.

Ø  Working parents can meet their family obligations.

Ø  Saves commuting time.

Ø  Provides time and location flexibility.

Ø  Reduces job related stress and also interruptions at the workplace.

Ø  The benefits for the employers are: Influences employees in a positive way. Improves productivity.
Ø  Reduces absenteeism.
Ø  Improves employee job satisfaction, job performance and work quality.

Ø  Reduces costs related to environmental requirements, time, space, employee safety, relocation of the employees, and productivity.

Ø  Helps in retention of voluntary workforce, women and baby boomers. Companies can terminate contingent workers services more easily.

With respect to compensation and benefits paid to the flexible workforce, most companies pay an hourly wage, which is fixed on the basis of the complexity of work as well as the skill sets of the employee. No amount of paid leave, insurance and legally required benefits like gratuity and retirement benefits are paid.

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Q2.Define internal equity and explain its importance.

Q3.What is CTC? What are the components of CTC?

Q4.What are the elements of compensation?

Q6.Ms.Deepa Mehra is the VP-HR of Induslink Network. She is assigned the task of finding a new CEO for the company and fixing the compensation. What are the trends that she will have to look into before finalizing the compensation package for the CEO?
Fall/ August 2012
Master of Business Administration- MBA Semester 4
MU0015 –Compensation Benefits - 4 Credits
(Book ID:1336)
Assignment Set- 2 (60 Marks)
Note: Each Question carries 10 marks. Answer all the questions.
Q1.What are the major issues related to repatriation?
Answer : The term repatriation refers to bringing the employees who are on an international assignment back to the home country. It is very important to manage repatriation of employees in a very careful way. A poorly managed repatriation can lead to a feeling of frustration and cynicism in the employees. These feelings can be worse than the culture shock experienced in the first weeks of the assignment. It requires transparency in repatriation policy, sharing information on the career progression path, degree and support from the organisation during the international tenure and so on. Many organisations develop and share documented guidelines with respect to overseas assignment, so that the employees understand the rules and regulations and also know what to expect. Expatriate managers often return to the home office with a wealth of experience and perspectives. Yet, poor repatriation processes are blamed for underutilizing talent, losing human capital, and discouraging skilled managers from accepting overseas assignments (Gregersen and Black, 1995). Often the impact of repatriation for the employee is far greater than that of the original move to the host location. The move abroad is usually exciting, involving a promotion or at the very least, an increase in peer status.

Also, the day to day impact of life in the new culture is more keenly felt by the spouse and children, who interact with it on a far more personal basis. Moreover, the employee will be chosen for a particular skill set, which are generally appreciated by the new team as an asset. As the project comes to an end, the expatriate starts the closure process of the post, probably handing over to a locally based team or manager. At this point, home country HR should be back in touch with the employee, to start the career planning for the home move. However, most companies provide no post assignment guarantees, and this has a dual impact on the employee. Firstly, they will feel deeply insecure since they may have taken their family away from extended family and friends, interrupted education programmers and careers, and for what? To return home with no job? Another issue is the change in living standards. While settling down in a foreign country, they would have been offered financial incentives for the family to relocate from generous housing allowances to the payment of school fees. On returning home, these are taken away and the lifestyle that the family has become used to is radically reduced.

This is particularly a factor for Europeans coming home from the USA, where living standards are very high in comparison with the cost of living in most European cities. It is the children of expatriates that the impact can be the most pronounced, and the most dramatic, especially for teenagers caught between school systems, deep friendships and hormonal angst! Where the assignment has been a long one, there is the risk of the child becoming a Third Culture Kid far more familiar with the host culture than the home one. For them the return is a far greater challenge, as they are already at home and will be going somewhere completely foreign. Not only will they face a profound culture shock, they will also struggle with a sense of loss of identity as they leave their friends and peers behind.

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Q2.How does compensation effect employee satisfaction?
Q3.What are the factors to be taken into account to ensure an optimum compensation package for executives?
Q4.How is employee benefit and labour market linked?
Q5.What are the factors that have to be determined before preparing the salary structure?

Q6.Mr.Senthil is the HR Manager of First Source Pvt. Ltd. He found that many of the employees have been doing the same work for a long period of time. He decided to enrich some of their jobs. List some of the strategies which can be used by Mr.Senthil to enrich jobs in organisations.
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