Compensation
Compensation
? Payment of remuneration for work done by an employee.
? Remuneration paid in terms of the contract of employment.
? Can be in the form of cash or transfer to bank account.
Factors affecting compensation
? Supply and demand for employee skills.
? Nature of job
? Performance of the employee
? Market conditions
? The Firm’s ability to pay
? Seniority of the employee
? Cost of living
? Statutory framework like Payment of Wages Act , Minimum Wages Act etc.
Importance: Compensation
Importance: Compensation
Classification of compensation
? Primary compensation
? Secondary compensation
? Tertiary compensation
Primary compensation
Also called Basic compensation
it consists of
- Basic Pay
- Dearness allowance (DA)
- House rent allowance (HRA)
- City compensatory allowance (CCA)
Secondary Compensation
Includes Monetary incentives like
- variable pay
- production bonus
- cash rewards under incentive schemes like best employee of the month etc.
Tertiary compensation
It consists of various welfare schemes initiated by the organization like ?
- medical benefits
- scholarship to children
- special leave with pay
Wages
? Overview
? Concept of Statutory, Bare or Basic Minimum Wage
? Understanding definitions of important wage terms as per Minimum Wage Act 1948
Definition - Wages
? The wage is the payment made to the workers for placing their skill and energy at the disposal of the employer.
Terms
? Bare or Basic Minimum Wage
? Statutory Minimum Wage
Minimum Wages Act, 1948
? Minimu ...