A STUDY ON COMPENSATION

MANAGEMENT
Abstract
• Motivating factor for employees, though non-financial incentives work efficiently, The goals of
compensation management are to design the lowest-cost pay structure that will attract, motivate and retain
competent employees. Here the term compensation and salary of employee are one and same. Before
knowing about Compensation management one must know the labor laws of the country which are governing
employee’s compensation or remuneration system. International Labor Organization (ILO) made conventions
on labor welfare especially on regularly in payment of wages & salaries with minimum pay for stipulated
working hours. In accordance with the conventions & recommendations of ILO every country has established
labor laws and enforced, who ever contravene them shall be liable for penalty or punishment under serious
cases both may be awarded. Naturally judiciary of the concern country is watchdog for dealing labor issues.
Introduction
• An example of direct financial compensation is the money the worker receives as wages at the end of the week,
or as a salary paid at the end of the month. Many companies pay salaries straight into the employee's bank account.

• An example of indirect financial compensation is when the company contributes to an employee's housing
subsidy or a pension plan.

• Not all compensation is financial. A worker can get great satisfaction from his work and enjoy the environment in
which he works. This is called non-financial compensation and cannot be counted in terms of money. For example,
a veterinarian might enjoy working outside, going to farms to treat animals and deliver calves. A publisher might
enjoy the challenge of producing books that will enrich people's lives.
Importance of the study
 Compensation or reward system of the organization is most influencing factor for employee motivation, must
remember.

 If we observe history of causes of industrial disputes, employee compensation a reward system issues were the main
reason in most cases.

 good compensation system of rewards system in the organization will minimize industrial disputes and helps in
maintaining peace and harmony within the organization.

 Compensation system plays a key role in employee attrition.

 Compensation system mostly influences retention of employee in the organization.

 Most of employee satisfaction depends upon compensation a reward system of organization.

 The primary scope was to lighten the problem faced by the employees with respect to balancing the personal
and professional life.

 The study also focuses in the strategies that are being adopted by the management to boost their employees
work level by motivating them which in turn will lead to have a happy and peaceful life.

 The study also focuses on the improvement of the working conditions which helps them towards the
performance of employees in the organization.

•
Need of the study
 Compensation is a vital element in improving employee productivity which in turn will lead to organization
productivity.

 The study is essential in understanding the attitude of employees towards personal and professional life.

 The findings of the study may assist in the organization, to identify the grey area and take corrective actions
which would help them to increase high production job satisfaction and work commitment towards the
organization.

• The need for the study becomes necessary to find out some solution of the employees to have an balanced life
of an individual
Limitations of the study
1. The study is limited to the supply chain and profitability analysis of Saai Foods and may not apply to other
companies.

2. The research is based on available financial and operational data, which may not capture all market
fluctuations.

3. External factors such as government regulations, economic conditions, and global supply chain disruptions
are not deeply analyzed.

4. The study focuses on internal supply chain operations and does not extensively cover third-party logistics
providers.

5. The recommendations provided are based on current industry trends and may require periodic updates to
remain relevant.
Literature Survey
• Compensation Management and Employees Performance in the Manufacturing Sector, A Case Study of
a Reputable Organization in the Food and Beverage Industry, 1 IBOJO. Bolanle Odunlami, 2ASABI.
Oludele Matthew, Volume 2, Issue 9, October 2014, PP 108-117: This paper examined the effect of
Compensation Management on Employees Performance in the Manufacturing Sector, A case study of A
Reputable Food and Beverage Industry. The objectives were to: determine the extent at which compensation
management affect employees performance, evaluate the relationship between working condition and
employee performance, access the rate at which welfare services affect employees performances, explore
relationship between compensation management and improved productivity and explore the relationship
between compensation management and retainment of staff.
Literature Survey
• A compensation theory of motivation vroom’s expectancy model which is based on the assumption that
man is rational being and will try to maximize his pay off this approach assume that motivation to work is
strongly determined by an individual perception that a certain type of behavior will lead to a certain type of
outcome. It is therefore necessary to say that if an employee perceived that he/she will be adequately
compensated such an employee will work harder to receiver more compensation. This is to ascertain the fact
that compensation package has positive correction with employees performance. This theory postulated three
elements which are expectancy, Instrumentality and valence. Expectancy views a person’s perception of the
likelihood that a particular outcome will result from a particular behavior or action for example; if an
employee work works hard he/she will improve productivity, which may definitely lead to more
compensation.
Literature Survey
1. Malliga Dasgupta (2010)1: Explored the relationship between psychological variables and emotional
intelligence of women employees in Information Technology Industry. The psychological variables
included in the study were Quality of Work Life, Work Family Role Conflict and Perceived Happiness of
female IT professionals. It correlated with Quality of Work Life and Happiness, indicating that it contributes
toward achieving higher Quality of Work Life and greater perceived happiness and were negatively
correlated with both the domains of Work family Role Conflict, indicating that Emotional Intelligence tunes
down the perception of Role conflict and thereby reduces the stress produced by it.
Literature Survey
• Nigade Jyoti Jayasingrao2, (2014): Made a study to analyze that life balance is
said to have been achieved when an individual is fulfilled both psychologically
and professionally, contributing to the home, office and society. According to men
external pressures and team orientation are the factors that cause work life
imbalance for women. While the women themselves have considered two factors
namely responsibility with accountability and security that cause work life
imbalance. The responsibility and accountability factor includes variables like
policies on casual leave and other benefits, emotions lack of child care and
parenthood, family pressures and interference, western culture, workload, policie
Literature Survey
1. Aloys Nyagechi Kiriago3,(2013): Observed that the poor Quality of Work Life at the stations because most
of the employees work under pressure from the stations’ management and clients. The poor Quality of work
life is also aggravated by lack of adequate tools that are required by attendants to perform their duties
effectively. It was further concluded that the more advanced in age the attendants are, the more satisfied they
were with safety and health conditions at their work stations. Also it was concluded that male respondents
were not affected by the state of safety and health conditions at the stations, unlike female attendation
Data Collection Methods
• Data collection is the process of gathering and measuring information on variables of interest, in an
established systematic fashion that enables one to answer stated research questions, test hypotheses, and
evaluate outcomes. One of the important tools for conducting survey is that availability of necessary and
useful data. Date collection is more of an art than a science. The methods of marketing research are in a way
the methods of data collection. The sources of information fall under two categories.
FINDINGS
• · The largest group of employees (33.3%) is aged 26-35, indicating a relatively young workforce.

• · The majority (37.5%) hold a Bachelor's degree, showing a preference for formally educated employees.

• · Most employees (33.3%) are in management, followed by production staff (29.2%), highlighting a balanced
workforce structure.

• · The largest group (33.3%) has 4-6 years of experience, suggesting a moderate retention rate within the company.

• · The highest percentage (33.3%) earn between ₹20,000 - ₹50,000, indicating a middle-income workforce.

• · Most employees (33.3%) are satisfied with financial planning, but some dissatisfaction exists (12.5%),
suggesting room for improvement.
SUGGESTIONS
 Organizations must make sure that there is friendly and positive relationship between employers and
employees in the organization.

 Management creates good and friendly working conditions that will aid employee’s performance.

 Organizations should ensure the provision of good welfare packages that will encourage and promote
employees performance.

 It is the desire of every organization to constantly increase productivity, thereby necessitating the need to
motivate employees through comprehensive compensation policies and friendly working conditions.
CONCLUSION
The Virtual tech services in the Manufacturing Sector is one of the vital sectors necessitating the growth and
development of Nigerian economy, therefore, it is vital for organizations to embark on effective
compensation management policies that will protect and promote employees performance. Employees are
integral part of the human resources management, and therefore must be properly compensated in order to
effectively perform beyond expectation. It is therefore vital to say that compensation management is an issue
that that is critical and vital for the running and management of the organization. More so, it is the heart beat
of the organization. It is therefore parties germane for both parties to negotiate and implement effective
compensation management policies that will benefit both parties