INTER AND INTRA INDUSTRY COMPENSATION DIFFERENTIALS

Views:
 
Category: Entertainment
     
 

Presentation Description

compensation ppt

Comments

Presentation Transcript

INTER AND INTRA INDUSTRY COMPENSATION DIFFERENTIALS  :

INTER AND INTRA INDUSTRY COMPENSATION DIFFERENTIALS

WHAT IS COMPENSATION? All forms of financial returns andtangible services and benefits that anemployee receives as part of anemployment relationship :

WHAT IS COMPENSATION? All forms of financial returns andtangible services and benefits that anemployee receives as part of anemployment relationship

 COMPENSATION DIFFERENTIAL Adam Smith argued that individual consider the whole advantages and disadvantages of different employments and make decisionsbased on alternative with greatest net advantage. If job has negative characteristics i.e. expensive training , disagreeable working conditions,….. Then employers must offer higher pay to compensate these negativefeatures :

 COMPENSATION DIFFERENTIAL Adam Smith argued that individual consider the whole advantages and disadvantages of different employments and make decisionsbased on alternative with greatest net advantage. If job has negative characteristics i.e. expensive training , disagreeable working conditions,….. Then employers must offer higher pay to compensate these negativefeatures

INTER INDUSTRY COMPENSATIONDIFFERENTIALS :

INTER INDUSTRY COMPENSATIONDIFFERENTIALS INTER INDUSTRY COMPENSATIONDIFFERENTIALS INTER INDUSTRY COMPENSATIONDIFFERENTIALS

TYPE OF INDUSTRY :

TYPE OF INDUSTRY In FMCG and financial sectors salaries are high There are large compensation differentials across industries–software, FIIs, foreign banks, consultancies and FMCGcompanies are top bracket paymasters while at lower rung aremanufacturing , consumer durables and pharmaceuticalcompanies . In volatile industry like software packages are to retainemployees as manpower is scarce In industry like engineering there is heavy basic fixedcomponent In industry like financial services, treasury and banking, highvariable component and paying for performance

SIZE OF INDUSTRY :

SIZE OF INDUSTRY Larger size organizations’ characteristics are higher profits, a lower ratio of labor costs to total cost, few industry competitors, and unionization . These pay higher wages and benefits for a number of reasons :- They usually are able to. They have some financial surplus, which they can use in various ways. to attract a pool of competent applicants. perceived obligation to counter lower job satisfaction. The high-wage employer may be part of a national organization whose major compensation decisions are made at the corporate level. For example, New York headquartered corporations often appear topay higher than local competitors.

Low-Compensation Employers :

Low-Compensation Employers They have low-paying ability because of the constraints of their product market. Most of their compensation decisions may be explained by this low ability to pay. Using compensation surveys, they usually pay attention to rates for specific jobs for which there is an active outside market. Jobs on which attention is focused obviously varies by industry. The minimum feasible compensation is one that will obtain just enough employees to maintain desired employee levels for some period, typically six months. But often organizations pay above this minimum, hoping to obtain employees of higher quality; lower their turnover rates; and lower their recruitment, hiring, and training costs.

Market Rate Employers :

Market Rate Employers most common compensation level strategy followed by organizations is to "pay the market." These organizations wish to treat their employees fairly and yet not to raise their costs significantly more than their competitors To pay the market rate an organization collect compensation data and determine from that data exactly what the market rates. This strategy can be characterized as being reactive to the market, so the organization keep constantly in touch with other organizations to find out what changes are occurring in employee pay

LABOR MARKETS :

LABOR MARKETS Low-pay organizations adjust to changes in labor demand by deciding how far they can lag behind high-paying organizations . During an economic upswing, high-pay employers will be increasing wages, salaries, benefits, and employment. Low-pay employers, to hold down turnover and to increase employment, will have to raise compensation more than high-paying firms. The compensation gap between high-paying and low-paying firms thereby narrows during an upswing. During a downswing, high-pay firms stop hiring and may lay off employees. Low-pay firms find that they have more and better applicants and less turnover. This means they can lag further behind the compensation leaders and that the inter-company differential widens.

LET’S HAVE A LOOK AT TOP 5COMPANIES :

LET’S HAVE A LOOK AT TOP 5COMPANIES

INTRA INDUSTRY COMPENSATIONDIFFERENTIALS :

INTRA INDUSTRY COMPENSATIONDIFFERENTIALS Experience Knowledge and skills possessed Training Working conditions Department levels

THANKYOU:

THANKYOU

authorStream Live Help