Hello, Can anybody guide me how to design compensation philosophy for an organization?? Thanks
From India, Jaipur
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From India, Jaipur
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Hi Puja,
To know the actual answer, it will take full-time work over several months. Let me share a brief snapshot:
1. Standard position description (referred to as JD in normal language): one of the finest resources is "O*NET."
2. Job evaluation: read a minimum of two different systems; good examples are Hay Point Factor, Job Grading. For job grading, check any of the government departments for definitions/salary levels, etc. For Hay Point Factor, I'm afraid I cannot share copyright info. It's an exhaustive version of how we compare jobs in real life (e.g., education/experience levels, information complexity, span of control, budgets, and so on). To give a brief indication, there are 24 compensable factors and 4-10 levels on each factor.
3. Salary survey: this helps us in taking care of "external equity," i.e., in layman's terms, what others are paying.
4. Wage arbitrage on a global level: hiring stats/industry studies reveal patterns in global equity (e.g., nurses are required in a particular country abroad, the home country will feel the shortage, and salaries will rise). On the contrary, in the place of posting with the coming of expat staff, locals will face competition.
5. Technology: ITES is a good example and spans across almost every known function.
6. Income tax regulations.
7. Social compliances (e.g., PF/ESI/bonus, etc.).
8. Individual motives: there are nine career anchors. We know the priorities by a scientific test "RSI."
9. Business needs of the company: every company is unique (refer to SWOT analysis) and so on. We have a cutting-edge methodology that takes care of all the variables mentioned above. It's known as a "cafeteria" or flexible benefits plan. I am a certified Compensation and Benefits Manager (CAMI) with exposure in EMEA/APAC regions. Feel free to raise specific queries.
From India, Delhi
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45To know the actual answer, it will take full-time work over several months. Let me share a brief snapshot:
1. Standard position description (referred to as JD in normal language): one of the finest resources is "O*NET."
2. Job evaluation: read a minimum of two different systems; good examples are Hay Point Factor, Job Grading. For job grading, check any of the government departments for definitions/salary levels, etc. For Hay Point Factor, I'm afraid I cannot share copyright info. It's an exhaustive version of how we compare jobs in real life (e.g., education/experience levels, information complexity, span of control, budgets, and so on). To give a brief indication, there are 24 compensable factors and 4-10 levels on each factor.
3. Salary survey: this helps us in taking care of "external equity," i.e., in layman's terms, what others are paying.
4. Wage arbitrage on a global level: hiring stats/industry studies reveal patterns in global equity (e.g., nurses are required in a particular country abroad, the home country will feel the shortage, and salaries will rise). On the contrary, in the place of posting with the coming of expat staff, locals will face competition.
5. Technology: ITES is a good example and spans across almost every known function.
6. Income tax regulations.
7. Social compliances (e.g., PF/ESI/bonus, etc.).
8. Individual motives: there are nine career anchors. We know the priorities by a scientific test "RSI."
9. Business needs of the company: every company is unique (refer to SWOT analysis) and so on. We have a cutting-edge methodology that takes care of all the variables mentioned above. It's known as a "cafeteria" or flexible benefits plan. I am a certified Compensation and Benefits Manager (CAMI) with exposure in EMEA/APAC regions. Feel free to raise specific queries.
From India, Delhi
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Thank you very much, Mr. Rana. It was indeed helpful. Could you please assist me with a format for designing this philosophy? I have a project to work on designing it for the organization. To begin, I can create a standard one, but the issue is that I have no clue about it. Therefore, I need a format for better understanding. Your help would be greatly appreciated.
Regards,
Puja
From India, Jaipur
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Regards,
Puja
From India, Jaipur
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Puja, the scope covers almost the entire Comp & Ben domain... Let me know how important it is for you and how much time you wish to devote. For starters, sit with someone who is adept in payroll for half a day - that is the basic minimum level. You will need to supplement with self-study on various labor laws/direct taxes, etc. For a slightly higher level, you can pick a course "Certified Compensation and Benefits Manager" from Middle Earth Consultants - they give a discount to students. For a higher end, pick courses from Hay Group. They were available in UAE, but very expensive there - "17k riyal," almost 2.5 lakhs for a course. Check with them for courses available in India. Last and best, you need exposure to real-life working in a transnational company.
From India, Delhi
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From India, Delhi
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Dear Puja,
In addition to the contribution made by Mr. Surya Vrat Rana, please find my suggestions for your project attached below.
Determining Salary Philosophy
Compensation and salary guidelines
Kindly note, these are your points of reference. You would need to incorporate information to make it relevant to the company you are required to present it for. Please consider sharing the bottlenecks that you would face while implementing the relevant information. We look forward to hearing from you.
From India, Mumbai
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In addition to the contribution made by Mr. Surya Vrat Rana, please find my suggestions for your project attached below.
Determining Salary Philosophy
Compensation and salary guidelines
Kindly note, these are your points of reference. You would need to incorporate information to make it relevant to the company you are required to present it for. Please consider sharing the bottlenecks that you would face while implementing the relevant information. We look forward to hearing from you.
From India, Mumbai
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