COMPENSATION AND BENEFIT MANAGEMENT - MBA PROJECT REPORT

COMPENSATION AND BENEFIT MANAGEMENT

Project Report submitted For the

 Master of Business Administration (MBA)

In

Project Management & Finance Management

BY

Reference No: IBS-MB477

To

The Indian Institute of Business Management & Studies

2019

           

CHAPTER 1

INTRODUCTION

1.1 INTRODUCTION

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.

Organizational studies is "the examination of how individuals construct organizational structures, processes, and practices and how these, in turn, shape social relations and create institutions that ultimately influence people", organizational studies comprise different areas that deal with the different aspects of the organizations, many of the approaches are functionalist but critical research also provide alternative frame for understanding in the field.

Human resource management (HRM, or simply HR) is a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives. HR is primarily concerned with how people are managed within organizations, focusing on policies and systems. HR departments and units in organizations are typically responsible for a number of activities, including employee recruitment, training and development, performance appraisal, and rewarding (e.g., managing pay and benefit systems). HR is also concerned with industrial relations, that is, the balancing of organizational practices with regulations arising from collective bargaining and governmental laws.

Students involved in the Organizational Studies program study the theoretical basis for organizational participation, leadership, and human interaction. Guiding the program is the premise that organizations need persons capable of examining problems with a critical and

imaginative eye and of responding with policies, actions and decisions derived from a broad knowledge base.  The study of HRM at Indian Cement Ltd. will further develop these themes by studying relevant theories, research and practices in managing people and the employment relationship. This is an area of study drawing on and using different approaches and disciplines to develop our understanding of people's behaviour at work and how this might be influenced- and the limits to influencing employee behaviour. These core disciplines include psychology, sociology and economics.

1.2     OBJECTIVE OF STUDY

-          Conduct a study about the compensation management

-          Understanding of Compensation management and its application

-          Get a brief idea of compensation management and its effects

-          Understand some of the Compensation plans

1.3  RESEARCH PROBLEM

Researcher must recognize and respond to all factors that affect their organizations. This study describes how the internal and external environments of an organization drive change within the company.

Navigating Change in Organizations

Navigating in today's chaotic business environments is much like trying to steer a tiny boat back to shore while caught in the center of a hurricane. There are many forces at work that a person will need to respond to in order to make it safely back to port. Just like this tiny ship, today's organizations and their managers are faced with a significant amount of factors that require an immediate response, often in the form of organizational change.. The forces that drive this change in business are known as the internal and external environments. This lesson will discuss how both the internal and external environments of an organization induce change.

The Internal Environment

The internal environment of an organization refers to events, factors, people, systems, structures and conditions inside the organization that are generally under the control of the company. The company's mission statement, organizational culture and style of leadership are factors typically associated with the internal environment of an organization. As such, it is the internal environment that will influence organizational activities, decisions and employee behavior and attitudes. Changes in the leadership style, the organization's mission or culture can have a considerable impact on the organization.

The External Environment

The external environment are those factors that occur outside of the company that cause change inside organizations and are, for the most part, beyond the control of the company. Customers, competition, the economy, technology, political and social conditions and resources are common external factors that influence the organization. Even though the external environment occurs outside of an organization, it can have a significant influence on its current operations, growth and long-term sustainability. Ignoring external forces can be a detrimental mistake for managers to make. As such, it is imperative that managers continually monitor and adapt to the external environment, working to make proactive changes earlier on rather than having to take a reactive approach, which can lead to a vastly different outcome.

Environmental Scanning and Change

In order for managers to react to the forces of internal and external environments, they rely on environmental scanning. Environmental scanning refers to the monitoring of the organization's internal and external environments for early signs that a change may be needed, to accommodate potential opportunities or threats and to make adjustments to allow the company's strengths to combat its weaknesses. If you recall, one common type of environmental scan is the SWOT analysis, which looks specifically into the strengths, weaknesses, opportunities and threats of the internal and external environments. A manager will begin analyzing the internal environment by looking into inefficiencies inside the organization and will then look outside to the external environment and things occurring independent of the organization. Environmental scans allow managers to use the knowledge gained during the scanning process to decide what strategic steps, or changes, the organization needs to take to create or maintain a competitive advantage.

Changing for the Internal Environment

To better understand changes in the internal environment, let's look at the following example. After graduating from college, Cassandra decided to buy an existing tanning salon in her community. Before Cassandra purchased the salon, it was in terrible financial trouble. Many of the employees complained about the general manager's leadership style, and the staff were often confused about what products and services they offered at the salon because the manager continuously implemented his next 'bright idea' with little warning, most of which were complete failures.

Problems to be studied in Compensation Study:

Ensure human resources are employed cost-effectively

·         Pay rates should be competitive but not excessive

·         Achieve acceptable staff utilisation

·         Minimise staff turnover

·         Measure returns on investment in training

Make effective use of workforce potential

·         Ensure jobs have suitable, achievable workloads

·         Avoid too many under-utilised or over-stretched staff

·         Make best use of employees skills

Match the workforce to the business needs

·         Workforce planning to ensure business has the right number of staff in the right locations with the right skills

·         Effective recruitment to match workforce needs

·         Training programmes to cover skills gaps or respond to changes in technology, processes & market

·         Consider outsourcing activities that can be done better and more cost-effectively by external suppliers

·         Get the right number and mix of staff at each location where the business operates in multiple sites and countries

Maintain good employer / employee relations

·         Avoid unnecessary and costly industrial disputes

·         Timely and honest communication with employees and their representatives

·         Sensitive handling or potential problems with employees (e.g. dismissal, redundancy, major changes in the business)

·         Comply with all relevant employment legislation

1.4 SCOPE OF THE STUDY

The compensation management study help to understand the real picture of an organization. It helps to correlate theory and practice. The main scope of the study is:-       

-          Study different compensation methods

-          Understand different wages

-          Analyze the impact of compensation in organizations

-          Understand the objectives and benefits of compensation management.

1.5  RESEARCH METHODOLOGY

Collection of data for the purpose of studying functioning of various departments and the organization as a whole is based on two types of data .They are :-

1.      Primary.

2.      Secondary.

Primary Data

Primary Data is a data collected by the investigator himself for the purpose of a specific enquiry or study. Mainly data is obtained through Direct Observation and Direct interview method.

Ø  Observation: - mainly done by observing the general environment and day to day operation of the company.

Ø   Interview: - Conducted face to face interview with mangers and company employees.

Secondary Data

Secondary Data is obtained from sources like

Ø  Company Annual Report

Ø  Company Records

Ø  Previous reports

Ø  Websites

Ø  Magazines etc

1.6   LIMITATION OF THE STUDY

·         The time period of the study is very short, so elaborate study was not made.

·         Only certain factors are considered in this study to measure the effect of compensation management.

·         The conclusions and suggestions were formed based on employee’s perception. 

·         Some error information may be given source of information

 CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

The various parameters selected for analyzing the job satisfaction level and it’s impact are:

·         Remuneration

·         Training & Development

·         Communication

·         Goals

·         Teamwork

·         Promotions

·         Leadership

·         Rewards & Punishment

·         Social Environment

·         Physical Environment

Previously conducted surveys prove that the above mentioned parameters have a high positive correction with the job satisfaction level and it’s impact on employee motivation.

Feedback given by the employees regarding the above mentioned parameters have been analyzed to find out the employees perception about these parameters and thereby the overall job satisfaction level is measured then analyzed it’s impact on employees motivation.

TABLE 1

THE SATISFACTION LEVEL WITH RESPECT TO REMUNERATION

SATISFACTION LEVEL	PERCENTAGE (%)
To a very small extent	Nil
To a small extent	21.2
To a large extent	48.8
To a very large extent	31

GRAPH 1

Interpretation

·         21.2% of the employees are satisfied with the remuneration to a small extent

·         48.8 of the employees are satisfied with their remuneration to a large extent

·         30% of the employees are very much satisfied with their remuneration

TABLE 2

SATISFACTION LEVEL REGARDING TRAINING & DEVELOPMENT

SATISFACTION LEVEL	PERCENTAGE (%)
To a very small extent	Nil
To a small extent	28.3
To a large extent	34.6
To a very large extent	37.1

GRAPH  2

Interpretation

·         28.3% of the employees are satisfied with the Training & Development to a small extent

·         34.6% of the employees are satisfied with their Training & Development to a large extent

·         37% of the employees are very much satisfied with their Training & Development

TABLE 3

SATISFACTION LEVEL REGARDING COMMUNICATION WITH PEER & SUPERIORS

SATISFACTION LEVEL	PERCENTAGE (%)
To a very small extent	3
To a small extent	26.5
To a large extent	43.2
To a very large extent	27.3

GRAPH 3

Interpretation

·         3 % of the employees feel very uncomfortable to communicate with their peers and superiors

·         26.5%  of the employees are satisfied to a small extent with regard to communication

·         43.2 of the employees are satisfied to a large extent with regard to communication

·         27% of employees to a very large extent are comfortable in communicating with their superiors and peers.

TABLE 4

CLARITY OF THE EMPLOYEES REGARDING GOALS OF THEIR DEPARTMENT AND THE ORGANIZATION

SATISFACTION LEVEL	PERCENTAGE (%)
To a very small extent	6.6
To a small extent	10
To a large extent	56.6
To a very large extent	26.8

GRAPH 4

Interpretation

·         6.6 % of the employees are not very clear with their goals

·         10% of the employees are clear to a small extent with their goals

·         56.6% of the employees are clear with their goals to a large extent

·         26.8% of the employees do not have any confusion with regard to their goals.

TABLE 5

THE EXTENT OF TEAMWORK PRESENT BETWEEN THE EMPLOYEES

SATISFACTION LEVEL	PERCENTAGE (%)
To a very small extent	8.12
To a small extent	34.87
To a large extent	53.98
To a very large extent	3.03

GRAPH 5

Interpretation

·         8.1 % of the employees are satisfied with teamwork to a very small extent

·         34.87 % of the employees are satisfied with teamwork to a small extent

·         53.98% of the employees to a large extent are satisfied with teamwork

·         3.03% of the employees are satisfied with teamwork to a very large extent

 CHAPTER 5

FINDINGS, SUGGESTION & CONCLUSIONS

5.1  FINDINGS

1)      Presence of a firmly implemented compensation plan- good sense of growth.

2)      High proportion of routine work- during compensation and immediately after.

3)      Organization climate-

• Well analyzed goals are set.
• Good and effective performance appraisal strategies applied.
• All the strategies are fair and objective.
• The employees are well aware of what is expected of them.
• Proper feedback is not given to the management cadre staff.
• Suggestions and innovations are not rewarded.
• Supervisors are patient with the employees’ problems.
• Good performance leads to annual increments and promotions.
• Training and development programs are not very effective and helpful.
• The purpose of Performance Appraisal System followed in the company is fulfilled.

5.2  SUGGESTIONS

• Extensive of the job training.
• Free hand in decision making.
• Focused job responsibility.
• Transparent career planning of all officers.
• Give tangible advantages.
• Exemplary rewards should be given for unique achievements of the employees.
• Informal were calling as and when they need.
• Giving chance in decision making.
• Reward for employee work.
• Proper interactions with seniors.
• Effective training and development programs should be held.
• Proper feedback should be given to the management cadre staff at fixed time periods.
• Suggestions and innovations should be encouraged.
• Performance appraisal system should be extensively used in job rotation.
• Up gradation of basic qualification of all workers to be taken in future based on their performance.

5.3  CONCLUSION

Compensation and benefit management studies, at least in its traditional form, seem to be losing terrain in business schools and universities. While it may still be going fairly strong in Indian Cement Ltd., it seems to be regressing in other parts of world. Although the Academy of Management and EGOS experience continually growing memberships, it is increasingly questioned whether there is, and whether there should be, a field worthy of the name of organization studies. Some scholars are concerned that the development of organization theories is not advancing our insights into organizational phenomena.

As a result, an organization design is forecasted that differs from what is found in studies forecasting that innovation and human resources as a strategic toll will increase in importance. In contrast to what was thought, it is forecasted that in the future organization design will be more centralized with higher degrees of formalization. Furthermore, it is forecast that the use of similar information technology infrastructures (SAP, ORACLE etc.) brings companies many advantages, such as ease of communication, integration etc. and that companies, regardless of sector, are in many ways tending towards isomorphism

BIBLOGRAPHY

Books:

• Donald L. Kirkpatrick, 2006, Improving Employee Performance through Appraisal and Coaching.
• Richard Rudman, 2003, Performance Planning and Review.
• Roger E. Herman, 1997, The Process of excelling, oak Hill press.
• P. Subba Rao, 2006, Essentials of Human Resource Management and Industrial Relations, Himalaya Publishing House.

Journals:

• Gitam Journal of Management.
• Journal of Occupational and Environmental medicine.
• Indian Journal of Social Work.
• Indian Journal of Human Resource.