MU0015- COMPENSATION AND BENEFITS

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ASSIGNMENT

DRIVE	SPRING 2016
PROGRAM	MBA
SEMESTER	4
SUBJECT CODE & NAME	MU0015- COMPENSATION AND BENEFITS
BK ID	B1859
Credit & Marks	4 CREDIT, 60 MARKS

Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.

Question.1. (i) What is meant by “compensation management”?

Answer:Compensation management is a general policy, implemented in conjunction with specialized software, designed to help an organization maximize the returns on available talent. The ultimate goal is to reward the right people to the greatest extent for the most relevant reasons.

Compensation management software can optimize salary, bonus, stock option, and benefits budgets to yield the maximum profit per employee or per work hour. However, any organization or business requires a competent and sensitive human management team at least as much as it needs effective computer programs.

(ii) Organizations design out the employee compensation packages basedon some ‘compensation’ and ‘non-compensation’ dimensions.Describe in brief the ‘compensation’ dimensions

Answer:Compensation Management is an organized practice that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees. Compensation includes payments such as bonuses, profit sharing, overtime pay, recognition rewards and sales commission. Compensation can also include non-monetary perks such as a company-paid car, company-paid housing and stock options. Compensation is an integral part of human resource management which helps in motivating the employees and improving organizational effectiveness.

Question.2. Explain the concept of Wage?

List down the pre-requisites of effective Incentive schemes?

Answer:A wage is monetary compensation (or remuneration, personnel expenses, labor) paid by an employer to an employee in exchange for work done. Payment may be calculated as a fixed amount for each task completed (a task wage or piece rate), or at an hourly or daily rate, or based on an easily measured quantity of work done.

Question.3. What do you understand by VRS (Voluntary Retirement Scheme? Also listdown reasons, merits and demerits of VRS?

Answer:Voluntary retirement scheme is a method used by companies to reduce surplus staff. This mode has come about in India as labour laws do not permit direct retrenchment of unionized employees.

VRS applies to an employee who has completed 10 years

Question.4. Discuss the Organizational and External Factors Affecting Compensationstrategies?

Answer:The primary objective of a compensation system is to administer an effective and equitable pay system. It can be affected by various factors which are as follows:

1. Organizational Provisions: Organizational provision states that the level of compensation largely depends upon organizational operating policies and procedures. It is because the policies serve as a guideline for formulating and implementing

Question.5. Explain the elements of Managerial remuneration?Elucidate some of the economic determinants of pay?

Answer:Managerial remuneration is compensation for services provided to a company in a managerial capacity. This can include cash payments, along with benefits like stock options, health insurance, and bonuses. Managers are typically paid more than the people they supervise, although they tend to make less than the executives at the head of the company. Some pay structures are transparent, making it easy to determine how

Question.6. Who are ‘Expatriates’? What are the objectives of ‘Expatriatecompensation’? Differentiate between Financial (extrinsic)compensation and Non-financial (intrinsic) compensation.

Answer:Major objectives on which most of the expatriate compensation plans are designed are mentioned below:

The whole area of international compensation presents some tricky problems. On the one hand, there is logic in maintaining uniformity in companywide pay scales and policies so that the employees in the same cadre are paid within the same narrow range.

This reduces the risk of perceived inequalities

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