Professional Documents
Culture Documents
FOR
TOPIC: COMPENSATION COMPANY GUIDE: Ms. Neeta Kapoor Senior manager (EBS) FACULTY GUIDE: Prof. Kishori Ravi Shankar
Shaheed Sukhdev College Of Business Studies
Acknowledgements
If words are considered to be signs of gratitude then let these words Convey the very same. Our sincere gratitude to all those people who gave their precious time and valuable contribution to our survey and provided us necessary directions in completing this project to the best of our abilities.
We are highly indebted to Ms.Neeta Kapoor , Senior Manager, EBS and company project guide, who has provided us with the necessary information and also for the support extended out to us in the completion of this report and his valuable suggestion and comments on bringing out this report in the best way possible.
We also thank Prof. Kishori Ravi Shankar, Shaheed Sukhdev College of Business Studies, who has sincerely supported us with the valuable insights into the completion of this project.
We are grateful to all our friends who have helped us in the successful completion of this project.
CONTENTS
1. Introduction of compensation management
2. Objectives of compensation
3. Scope of compensation
4. Types of compensation
5. Company background
6. Team
2. Motivating Personnel: Compensation management aims at motivating personnel for higher productivity. Monetary compensation has its own limitations in motivating people for superior performance.
3. Optimizing Cost of Compensation: Compensation management aims at optimizing cost of compensation by establishing some kind of linkage with performance and compensation.
4. Consistency in Compensation: Compensation management tries to achieve consistency-both internal and external-in compensating employees. Internal consistency involves payment on the basis of criticality of jobs and employees' performance on jobs.
JOB ANALYSIS
SALARY SURVEY
PAY STRUCTURES
Types of compensation
1. Direct compensation 2. Indirect compensation
Direct Compensation
Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. Basic Salary Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month, etc. It is the money an employee receives from his/her employer by rendering his/her services House Rent Allowance Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work. Conveyance Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.
Leave Travel Allowance These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization. Medical Reimbursement Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements. Bonus Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one months salary of the employee. Special Allowance Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans; insurance, club memberships, etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.
Indirect Compensation
Benefits contributions may include: Medical Insurance Prescription Drug Insurance Dental Insurance Group Life Insurance Long-Term Disability Insurance Accidental Death Benefits Tax contributions may include: Disability (Medicare) Worker Compensation Insurance, Unemployment Insurance Retirement contributions may include: Severance Award, Voluntary or Involuntary Retirements Benefits such as VRS etc. Fringe Benefits or Perks Employee benefits and (especially in British English) benefits in kind (also called fringe benefits, perquisites, perks) are various non-wage compensations provided to employees in addition to their normal wages or salaries. Where an employee exchanges (cash) wages for some other form of benefit, this is generally referred to as a 'salary sacrifice' arrangement. In most countries, most kinds of employee benefits are taxable to at least some degree. Fringe benefits can also include but are not limited to: (employer-provided or employer-paid) housing, group insurance (health, dental, life etc.), income protection, retirement benefits, daycare, tuition reimbursement, sick leave, vacation (paid and non-paid), social security, profit sharing, funding of education, and other specialized benefits
The purpose of the benefits is to increase the economic security of employees. The term perks is often used colloquially to refer to those benefits of a more discretionary nature. Often, perks are given to employees who are doing notably well and/or have seniority. Common perks are company cars, hotel stays, free refreshments, leisure activities on work time (golf, etc.), stationery, allowances for lunch, andwhen multiple choices existfirst choice of such things as job assignments and vacation scheduling They may also be given first chance at job promotions when vacancies exist. Employee benefits in the United States might include relocation assistance; medical, prescription, vision and dental plans; health and dependent care flexible spending accounts; retirement benefit plans (pension, 401(k), 403(b)); group-term life and long term care insurance plans; legal assistance plans; adoption assistance; child care benefits; and possibly other miscellaneous employee discounts (e.g., movies and theme park tickets, wellness programs, discounted shopping, hotels and resorts, and so on).
COMPANY BACKGROUND
E-Billing Solutions was incorporated in 2005 by young entrepreneurs who came together to offer a comprehensive and easy solution for the e-commerce industry. As payment system is a heart of any industry, the business concept was apt for a consistent positive growth. After exhaustive research on e-commerce requirements, EBS developed a product which changed how business was operated. EBS is a pioneer to associate with multiple acquiring Banks for providing Payment Gateway services to offer Master, Visa, Diners, Netbanking & Cash Card brands on a single platform. Its offices are spread out in the Metros of Mumbai, Hyderabad & Chennai and a network of associates span across the country, for easy reach and to provide personal attention, service and consultation. EBS is the first Indian merchant account provider to achieve the PCI DSS 1.1 Standards of Compliance. The organization was founded by American Express, Discover Financial Services, JCB, MasterCard Worldwide & Visa International. The PCI Security Standards Council is an open global forum for the ongoing development, enhancement, storage, dissemination and implementation of security standards for account data protection. This achievement makes them one of the most secured online service providers in the world. As EBS priority has been always safeguarding the interest of both the merchant as well as its clients, they are constantly updating there
technologies to ensure better security standards for there business. There systems make available sophisticated technologies to Indian Merchants through a user friendly console, integrated with multiple online payment acquiring options on a single platform. The platform independent systems provide a cost effective solution without further infrastructure or skilled manpower, otherwise not available with Indian Merchants, to explore the online space. On September 22, 2011, EBS announced that Ogone, one of Europes leading payment service provider, has entered into a binding agreement to acquire the company. EBS continue to operate under its current management structure and market approach and EBS's senior management remain in charge of the operational business.
Team
EBS staff members are energetic technocrats with extensive experience in Software, Internet & Web based Technologies. Each personnel undergoes thorough training on customer service, communication, management to produce effective results along with the latest technical training on a range of technologies, prevalent in the market. EBS is committed to create a new level of success for their clients. There vast assortment of services is designed to facilitate clients to reduce cost, increase profits, protect their business and build the goodwill for their brands. Its Team consists of highly experienced IT engineers, Software analysts, Administrative and consultants for varied IT related queries, who keep themselves updated with technology. The team is encouraged to apply their knowledge using their intellect qualities in R & D to produce better results for the business. There team constantly works on different aspects that are essential to reduce the frauds in online business, like Risk Management Software and fraud detection tools that work on number of parameters.
2. Salary survey salary survey is done by EBS to know what others are paying -To gather information regarding the industry standards -To know more about the market rate i.e. compensation offered by the competitors -To design a fair compensation system -To design and implement most competitive reward strategies -To benchmark the compensation strategies 3. Competencybased pay With competency-based pay, an employee is paid for the range, depth and types of skills and knowledge he/she is capable of using in the job rather than for the position they hold. The "new pay" approach to compensation attempts to
address organizational needs to motivate employees and support organizational strategies. And EBS uses this strategy to get best employees and pay them according to their level.
focusing participants on achieving calendar year performance goals which contribute to sustainable value providing significant bonus differential based on performance against challenging personal, business, and other targets, including safety.
STIP payments are linked to three performance criteria: Group financial performance, Group safety performance and personal performance. Product group chief executives' STIP payments are linked to Group and product group financial performance, product group safety performance and personal performance. Group and product group financial performance is partly measured on an actual underlying earnings basis and partly on a basis normalised for fluctuations of market prices and exchange rates.
Long-term incentive
A reward system designed to improve employees' long-term performance by providing rewards that may not be tied to the company's share price. In a typical LTIP, the employee (usually an executive) must fulfill various conditions and/or requirements that prove that he or she has contributed to increasing shareholder value. The incentives for doing this are usually conditional company shares and EBS provides employee stock option for employees
An employee stock option is a call option on the common stock of a company, issued as a form of cash compensation. Restrictions on the option (such as vesting and limited transferability) attempt to align the holder's interest with those of the business shareholders. If the company's stock rises, holders of options generally experience a direct financial benefit. This gives employees an incentive to behave in ways that will boost the company's stock price. Employee stock options are mostly offered to management as part of their executive compensation package. They may also be offered to non-executive level staff, especially by businesses that are not yet profitable, insofar as they may have few other means of compensation. Alternatively, employee-type stock options can be offered to nonemployees: suppliers, consultants, lawyers and promoters for services rendered. Employee stock options are similar to warrants, which are call options issued by a company with respect to its own stock. Stock option expensing became a controversy in the early 2000s, and it was eventually determined by the Financial Accounting Standards Board that the options should be expensed at their fair value as of the grant date.
Incentive payment that is supplemental to the base wage for cost reduction, quality improvement, or other performance criteria. -Group Incentive Plans are also there for employees which are Team Incentive Plans Compensation plans where all team members receive an incentive bonus payment when production or service standards are met or exceeded. Establishing Team Incentive Payments Set performance measures upon which incentive payments are based Determine the size of the incentive bonus. Create a payout formula and fully explain to employees how payouts will be distributed. Gainsharing Plans Programs under which both employees and the organization share the financial gains according to a predetermined formula that reflects improved productivity and profitability. Scanlon Rucker Improshare Here are certain pros and cons of team incentive plans: PROS
Team incentives support group planning and problem solving, thereby building a team culture. The contributions of individual employees depend on group cooperation. Unlike incentive plans based solely on output, team incentives can broaden the scope of the contribution that employees are motivated to make. Team bonuses tend to reduce employee jealousies and complaints over tight or loose individual standards. Team incentives encourage cross-training and the acquiring of new interpersonal competencies. CONS Individual team members may perceive that their efforts contribute little to team success or to the attainment of the incentive bonus. Intergroup social problemspressure to limit performance (for example, team members are afraid one individual may make the others look bad) and the free-ride effect (one individual puts in less effort than others but shares equally in team rewards)may arise. Complex payout formulas can be difficult for team members to understand. -Organisation incentive plans are also provided by EBS which are Profit Sharing Any procedure by which an employer pays, or makes available to all regular employees, in addition to their base
pay, current or deferred sums based upon the profits of the enterprise. Paid once in a year or deferred sums until retiremement
Employee Stock Ownership Plans (ESOPs) Stock plans in which an organization contributes shares of its stock to an established trust for the purpose of stock purchases by its employees This provides tax concessions to corporate orgns. And to trusts established for employee stock options. (i.e (difference between acceptance price and market value) The employer establishes an ESOP trust that qualifies as a tax exempt employee trust under Section 401(a) of the Internal Revenue Code. -Some non-financial benefits provided by EBS are: Awards Often used to recognize productivity gains, special contributions or achievements, and service to the organization. Employees feel appreciated when employers tie awards to performance and deliver awards in a timely, sincere and specific way.
Rooms of offices are named after the employees in NIIT Recognition awards Recognition has a positive impact on performance, either alone or in conjunction with financial rewards. Combining financial rewards with nonfinancial ones produced performance improvement in service firms almost twice the effect of using each reward alone. Day-to-day recognition from supervisors, peers, and team members is important. Best performer of the month awards in Blue Dart, ALACTEL,XANSA etc., Service awards - Award for the length of service and exactly not on performance - IBM: thanks award - IDEA: appreciation card
REFERENCE
1. HUMAN RESOURCE MANAGEMENT, GARY DESSLER 2. INTERNET 3. E- BILING SOLUTIONS, PREET VIHAR