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