1.Discuss the element of compensation The key elements of compensation for the executive officers are a base salary, an annual bonus paid in cash and a long-term incentive award denominated and usually paid in shares of Company stock. The executive officers are also eligible for certain other benefits and perquisites that are intended to be a part of a competitive compensation package that provides health, welfare, savings and retirement programs comparable to those provided to employees and executives at other companies in our industry. Some elements of compensation are related, meaning that the value of one element affects the value of another element. Increasing base salary increases target bonus opportunities, savings, pension and disability benefits. Increasing bonuses also increases pension and savings plan benefits, but long-term incentive awards are excluded from both of these plans. The purpose, key characteristics and target pay levels of each element of compensation are in the following table. Description Pay Element Purpose / Characteristics Target Level Pay short-term. across the Company to achieve specific measurable results.Base Salary Compensate for day. executive talent. paid in cash. bonus approximately at median of peer group (or above or below based on performance). Annual Bonus Motivate and reward Variable current year results performance. . Support and attracting retaining responsibility on the skills. by aligning with Combined base paid salary and target efforts in cash. the executive's level of based executive's experience accomplishments. and or slightly above median of peer group.Fixed. Approximately at to-day performance at short-term. base target three in stock. with Combined paid salary.and the income disability (health. short. and life plans. pension).Long-term Incentives Motivate and reward Variable long-term typically years. savings provide retirement and retirement income (savings and plans. indirect Combined value approximately at median of compensation: expenses and loss of health. long-term. efforts specific over by to results. bonus and target long-term incentives approximately at median of peer group (or above or below based on performance). aligning achieve measurable results and increase the market price of the Company's Common Stock. Benefits are provided to . performance. Employee Benefits(1) Protect catastrophic against Fixed. life insurance plans) and insurance. long-term disability general industry. fair to the executive stock-based. median of peer cash and group. general executive talent at a practical value for the Company. Perquisites Assist and in attracting Fixed. Approximately at or below median of industry. indirect. Post-Termination Provide the basis for Both Compensation rapid transition out of variable the Company that is both fixed and Approximately at elements.executives on the all same basis as other employees. retaining short-term. and to the Company by temporary following executive's involuntary termination (other providing income an . in that case competition will raise wages. Explain the economic theories of wages Economic Theories about Wages Many theories have been advanced to explain the nature of wages. A wage rate much above the subsistence level causes an increase in the number of workers. The first of them was the subsistence theory of wages. The surplus value. In the surplus-value theory as propounded by Karl Marx. competition will then lead to a depression of wages back toward the cost of subsistence. also called the “iron law of wages. constitutes the capitalist's profit. the value produced by the worker in excess of what is paid in wages is called surplus value. 2. will ultimately reduce the amount available for other workers. The theory maintains that wages cluster around the bare subsistence level of workers. Wages that are below subsistence reduce the size of the working population. exacted from the worker. either through legislation or through union pressure. but only up to the subsistence level again.than for cause). from which an excess withdrawal.” of which David Ricardo was one of the main exponents. Any . The wage-fund theory is that wages are advanced out of a fixed fund of capital. and their reduction would cause a decline in savings. laws and social and political changes) that might affect the determination of wage levels and by acknowledging that certain basic assumptions (equal bargaining power of employer and employee. Alas the gap between what employees want from their jobsand what they actually get appears to be widening..increase in wages would also have to be taken out of profits. which provide the capital from which the wage fund is derived. The marginal-productivity theory maintains that employers will only pay a wage that is. The bargaining theory modifies the marginal-productivity theory by taking into consideration other factors (e. free competition between the two. and mobility of labor) that characterize the marginal-productivity theory do not hold in our present economic system. Today significant numbers of Australians are dissatisfiedwith the . 11 Australians today expect more from their jobs.g. at most. equal to the amount of extra value added to the total product by one additional worker. designed resignations job promotesthe achievement of the organisation's objectives by structuring work in a way that integrates managementrequirements for efficiency and employee needs for satisfaction. philosophy. no one best way to design a job. Write down the characteristics of job design T h i s m e a n s t h a t s o m e j o b s w i l l b e m o r e o r l e s s efficient or satisfying than others. the attributes of theworker.as both productivity and quality of work life are tied to job design. One way to dothis is through better job design . employeeturnover. a well sabotage. Effective job design thus presents a major challenge for the HR manager. and unionisation. In absenteeism. Thereis however. Because job numerous regulations. Regardless poorly designed jobs result in lower productivity.quality of their working lives. The different approaches to job design can emphasise design either e f f i c i e n c y is influenced by government and or employee satisfaction. Human Resource Managers must promote employee productivity byfinding ways to unlock the potential that exists in the overwhelming majority of employees. contrast. economic conditions employeen u m b e r s a n d a v a i l a b i l i t y t r a d e o f f s i n e v i t a b l y o c c u r 3. f a c t o r s s u c h a s management union requirements. the cost of re-design . Job design is also affected by the nature of the task. it usually gets a higher ranking and pay assignment. This of course varies depending on the company's objectives and methods of operation. 1. If a job is connected to many functions. It evaluates the position. The Ranking Approach o In the ranking approach.Explain the different job evaluation approaches Job evaluation is the process of figuring out how much a job is worth to create a job structure for a business. jobs with similar requirements are kept together. These evaluations are extremely important to companies because they provide the basis for pay rates. The benefit of this method is that employees can . In this method. technical support might be more important to an online retailer than an on-site retailer. company representatives take each job and figure out how much it is worth to the business. not the performance of employees. the positions of treasurer and accountant would be in one class because they both require working with economic data. For example. For example. Using this method requires businesspeople to ascertain how each job is connected to each business function. The Classification Approach o The classification approach puts jobs into classes or groups. There are three major approaches to job evaluation a company can use. A small company. For example. The more points a job gets. one component might be physical effort or the amount of supervision the job requires. Why There are Different Approaches o Companies use different approaches to job evaluation and creating job structures largely because every company is different and has its own needs. the simplicity of the ranking method might be problematic. The advantage of doing this is that it gives a company a better . Multiple Approaches o Often. This method is expensive but is probably the most scientific. Company agents go through each job and identify which components apply to each position. For example. because there are dozens of individual positions. the more valuable it usually is to a company and the higher pay rate it typically gets. by contrast.understand that their pay rate is not completely subjective and is comparable to the pay rates received by others within the company. Each component has a specific point value assigned. companies complete more than one evaluation using different approaches. The Point Approach o With the point approach. in a large company. could find the ranking method is suitable because there are not that many positions to define. company agents list components with which to evaluate each job. it removes subjectivity.sense of whether the job structure it has created is accurate. because all approaches can be used in conjunction with each other. There thus is not really a "best" approach. . . 800 per month. 4.63. 15.000 per month.500 per month. DA is Rs.000 per month. Say your basic is Rs. you get conveyance allowance of Rs.600 per year.5. your package so far is Rs. 10. So. and you get HRA of Rs. List and explain the components of CTC Components of Cost to Company (CTC) Salary Basic Dearness Allowance (DA) Incentives or bonuses Conveyance allowance House Rent Allowance (HRA) Medical allowance Leave Travel Allowance or Concession (LTA / LTC) Vehicle Allowance Telephone / Mobile Phone Allowance Special Allowance Let’s understand this using a simple example. 3. cash. The employee who is awarded variable compensation has gone above and beyond his or her job description to contribute to organization success. deferred compensation. safety. or some other metric deemed important. team work. Variable pay is awarded in a variety of formats including profit sharing. profitability. bonuses. holiday bonus. Variable pay is used generally to recognize and reward employee contribution toward company productivity.6. quality. . 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