Roll no. 21184
Assuming this scenario in “INFOSYS”, which is employing both Management and Engineering graduates, is experiencing an acute retention problem.
View of Compensation and Benefits
Payroll department in the company believe compensation and benefits plans should support a company’s mission and drive the outcomes and behaviours which will contribute to its success, support the business, as well as attract, motivate and retain top talent. Compensation
Dissatisfaction with pay practices is one of the top reasons employees leave an organization. The compensation also aims at creating appropriate strategies and plans that support business goals and increase performance and retention. As the company is growing rapidly, there is a need to create incentives for employees to move quickly through vertical career tracks. The company also foresees across-the-board increase, pay for skills and competencies. |Objectives |Reward Program Components | |Individual Results and Outcomes |Base Salary Increases | |Individual Skill and Competency |Short-term Bonus/Incentive | |Development Project and Team Assignments |Recognition and nontraditional | |Organizational Success |Rewards Long-term Incentives |
Like compensation, a company’s benefits package can help attract and retain employees. While compensation more often drives an employee’s decision to join an organization, benefits are more often the glue that keeps them there.
The payroll department needs to create first formal base salary program for a human services organization. And work with the leadership team and the Board to identify an implementation approach that balances the organization’s competitive objectives with fiscal responsibility.
COMPONENTS OF COMPENSATION
I. BASIC PAY
The company decides to increase the basic pay with relation to the general economy, inflation rate, going market rate of the other companies. In other words it is determined by looking at what employees in a similar type of job are paid at other companies, what other employees in the same or a similar job at Infosys’s are paid, and how well employees perform the job, skills, experience and contributions, and performance over time. The certain percentage of expenses as it is certain, basic pay is given so that the basic necessity is taken care. Basic pay is also linked to the performance pay and increased annually.
II. DEARNESS ALLOWANCE
It is linked to the basic pay and neutralised partially the annually increase of pay. Considering Bangalore cost of living Index, the Dearness Allowance is paid with reference as mentioned below:
|Consumer Price Index (Excl.Rent): |31.78 | |Rent Index: |9.01 | |Groceries Index: |33.12 | |Restaurants Index: |18.01 | |Consumer Price Plus Rent Index: |23.39 | |Local Purchasing Power: |60.86 |
III. PERFORMANCE PAY
An ideal program is created, where the employees participate in the performance management process. Employees help supervisors design and develop performance plans. This helps employees understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done. It also helps employees see how they contribute to the organization's mission, goals, and success....