Payroll Management

 
       In an organization, payroll refers to the amount paid to employees during a certain period of time, for services they provided. It is the sum of all financial records of salaries, wages, bonuses and deductions. The process consists of calculation of salaries and tax deductions of the employees, administrating the retirement benefits and disbursements of salaries to employees. It can also be called as an accounts activity which undertakes the salary administration of employees in the organization.
Administrating the employees’ salaries is not an easy task, the HR and accounts department work together to calculate and disburse the salary to the employees. For this purpose Database of employees is maintained. Employee’s details such as name, employee ID, basic salary, daily attendance, etc are recorded. Gross Salary is calculated after adding the allowances and incentives to the basic salary of the employee. Net salary is calculated by deducting the tax and other calculated deductions (loan installments, etc).

Components of Compensation Package

We already know a lot about compensation management and components of total compensation package. Today we will learn  about the essential components to design a well formed compensation systems for any organization.

As Compensation strategy is a part of business strategy, with the change  of organizational structures and business need, the compensation systems have also been changing with time. From the bureaucratic organizations to the participative organizations, employees have started asking for their rights and appropriate compensations. The higher education standards and higher skills required for the jobs have made the organizations provide competitive compensations to their employees. That’s why an ideal compensation system are designed keeping in minds the strategic goals and business objectives. To design a well formulated compensation system following components are used: Continue reading

Total Compensation Benefit package

In human resource management, total compensation package is referred to not only money but also other benefits received by an employee for providing services to his employer. Today we will learn about the components of whole compensation package. An ideal compensation package may identify its various components as follows:

1. Fixed Pay or Base Pay

Base Compensation is one type of Compensation that refers to the basic salaries and wages given to he employees. It is normally constant at a given amount irrespective of the difference in work performance. Continue reading

Developing a Compensation Plan

Dear friends we already learned a lot about compensation management . Now we will  learn how to develop and set up a new Compensation plan in any organization. No matter which type of organization or establishment you are dealing with, every organization have to follow the following steps to establish a new compensation plan:

 1. Develop program outline

  • At first have to set an objective for the compensation program identifying the needs.
  • Establish target dated for implementation and completion
  • Determine a budget for the plan Continue reading

Compensation Management

If you ask general people what is compensation or what they mean by saying compensation, they may tell you compensation means salary, wages or overtime money paid by any company. Some may also include provident fund or gratuity.  All of them are right though the answer is not complete. Today we will learn about compensation in a broader sense. Lets learn the definition of compensation first.
Compensation management is an integral part of the management of any organization that involves balancing the work-employee relation by providing monetary and non-monetary benefits to employees  in exchange for work performed.Compensation strategy is derived from the business strategy. The business goals and objectives are aligned with the HR strategies. Then the compensation committee or the concerned authority formulates the compensation strategy. It depends on both internal and external factors as well as the life cycle of an organization. Continue reading