In: Operations Management
Consider the following
What are the components of total compensation?
Are no compensation rewards more attractive than compensation rewards?
How is a compensation structure designed?
What determines pay satisfaction?
What happens when a worker is dissatisfied with their pay?
1. Components of total compensation:
Basic |
HRA |
Conveyence |
Medical |
Leave Travel Allowance |
Special Allowance |
PF |
Meal |
Variable Pay |
Gratuity |
ESOP |
2. There are non-monetary benefits such as insurance, medical benefits, vacaption trip , child care which are better than actual remuneration
3. A compensation structure is defined considering the following factors:
a. Job profile
b. Previous salary
c. Basic pay- Many components are accounted as a percentage of base pay, such as medical allowance if 10% of Basic Pay
d. Market value of the new employee.
4. Pay satisfaction is determined by an employees need, his market value, his peers'remuneration, other non-monetary benefits, location and expense.
5. When a worker is dissatisfied with their pay, they continue on their job till the time they get a better one and then leave the job. Till that time, they feel demotivated, irritated and unwilling to do the work.