1. Introduction: In an expanding economy, human resources are scarce, and it’s important to attract and retain the best people. In a recessionary economy, human capital is a major expense that needs to be controlled effectively. But no matter what the global economic situation may be, you need maximum insight and flexibility to manage enterprise compensation. You also need the ability to adapt dynamically to ever-changing circumstances. A comprehensive compensation management solution achieves this by integrating all relevant human resources (HR) processes, including the administration of fixed and variable pay, long-term incentives. erformance management, compensation budgeting, personnel cost planning, salary benchmarking, and payroll. 1. 1Objectives of the Study The objectives of the study are as follows: ( To know the HRM policies and compensation system of an organization. ( To learn how to calculate the salary of employees. ( The main objectives are, as we are HRM students we need to deal with the employee compensation, rewards, promotion, increment etc, so this study will help us do this properly. 1. 2Scope of the Study This study covers the basic system of compensation management.
We have put our all efforts to prepare this paper in such way which will help us it for further information needed. 1. 3Methodology of the Study This study is based on our knowledge which we have learned from our course teacher. We use used forecasted information, and some information given by our honorable course teacher. We try to given some pictorial comparison of salary system. We used MS word; MS excel for prepared this report properly. 1. 4Limitations of the Study We are really unable to collect enough information for some unanticipated reasons.
Due to the lack of enough time we could not gather more information to justify extract information. Many things were so confidential that we are not entitled to access there. The most vital limiting factor was our lack of knowledge and experience for this report is not enough at this stage. 2. Meaning of wage or compensation payment Wage is a monetary payment made by the employer to his employee for the work done or services rendered. It is a monetary compensation for the services rendered. A worker may be paid Tk. 100 per day or Tk.. 4500 per month. This is wage payment.
The worker gives his services and takes payment called wage payment. Industrial workers are paid remuneration for their services in terms of money called wage payment. Wages are usually paid in cash at the end of one day, one month or one week. Money wage is the monetary compensation or price paid by the employer to his employee for the services rendered. Such compensation is also called wage or salary or reward given by an organization to a person in return to a work done. Generally, compensation payable to an employee includes the following three components: ?
Basic compensation for the job (wage/salary) ? Incentive compensation for the employee on job ? Supplementary compensation paid to employees (fringe benefit and employee services) 2. 1 Components of Employee Remuneration The remuneration packet of an employee includes wage/salary, incentives, fringe benefits, perquisites and finally non-monetary benefits. This is made clear in the following chart: [pic] 2. 2 Model of Compensation Management [pic] 3. About the Organization The name our organization is B-Cell. Com. Our Company is situated in Gulshan-2 Dhaka. Our company is fully technology based organization.
The company will produce pen, pencil, mobile accessories, pen drive, and some other necessary things have produce which is needs for our daily life. Generally this type of organization requires many employees to operate the business. But we are in early stage to operate the business. For that reason, we have stated our business with few employees. Our company will follow the organizational hierarchy. 4. Distribution of points for each Job To distribute of points for each job we have follow the Lott’s point method. This method has five steps to weight the job. These methods are Step-1 Identify and define the factors useful in describing the fundamental elements of the general nature of all jobs under the study. Step-2 -Weight the factors and assign a specific value to each factor. Step-3 – Identify the sufficient number of benchmark jobs to cover the entire range of difficulty or importance of all factors. Step-4 – Using each factor, assign the value from 1 to 10 to each benchmark job. The job demanding the greatest possible degree of a factor receives a 10 and the job demanding little or no amount of a factor receives a 1 values between 1 to 10 are assigned to other job using the same procedure. Step-5 Multiply the weighted factor value by the benchmark job value. This provides a weighted point score for each factor for each benchmark job. Summary of job points |Name of post |Job points | |Peon |200 | |Receptionist |358 | |Sales executive |458 | |Junior executive |564 | |Senior executive |666 | |Asst. anager |791 | |GM |900 | |CEO |1000 | 5. Pay Policy Line The pay policy line of our company are given in below First we distributed points of each job, and then assume the some range which ranges fill the job points and these points is regard as midpoint of that job. The first step is 200-400, the difference between this, is 200 which are divided by 2, the result is 100, this value is added with 200 and the result is 300. This 300 considered as midpoint.
This midpoint touches the salary of 10000. The mid salary of 10000 is percentage by 80 and value is 8000. So, The minimum salary is 10000 -80000 = 2000 The Maximum salary is 10000 + 8000= 18000 After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step. This is considering as steps involved in each grade. So maximum salary – minimum salary / desired step = value 18000 – 2000 = 16000 / 8 = 2000 The second step is 401-501, the difference between this, is 100 which are divided by 2, the result is 50, this value is added with 401 and the result is 451.
This 451 considered as midpoint. This midpoint touches the salary of 16000. The mid salary of 16000 is percentage by 80 and value is 12800. So, The minimum salary is 16000 -12800 = 3200 The Maximum salary is 16000 + 12800= 28800 After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step. This is considering as steps involved in each grade. So maximum salary – minimum salary / desired step = value 28800 – 3200 = 25600 / 8 = 3200
The third step is 502-600, the difference between this, is 98 which are divided by 2, the result is 49, this value is added with 502 and the result is 551. This 551 considered as midpoint. This midpoint touches the salary of 25000. The mid salary of 25000 is percentage by 60 and value is 15000. So, The minimum salary is 25000 – 15000 = 10000 The Maximum salary is 25000 + 15000= 40000 After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step. This is considering as steps involved in each grade. So maximum salary – minimum salary / desired step = value 0000 – 10000 = 30000 / 6 = 5000 The fourth step is 701-601, the difference between this, is 100 which are divided by 2, the result is 50, this value is added with 601 and the result is 651. This 651 considered as midpoint. This midpoint touches the salary of 32000. The mid salary of 32000 is percentage by 50 and value is 16000. So, The minimum salary is 32000 – 16000 = 16000 The Maximum salary is 32000 + 16000= 48000 After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step. This is considering as steps involved in each grade.
So maximum salary – minimum salary / desired step = value 48000 – 16000 = 32000 / 4 = 8000 The fifth step is 702- 852, the difference between this, is 150 which are divided by 2, the result is 75, this value is added with 702 and the result is 777. This 777 considered as midpoint. This midpoint touches the salary of 42000. The mid salary of 42000 is percentage by 20 and value is 4800. So, The minimum salary is 42000 – 8400 = 33600 The Maximum salary is 42000 + 8400 = 50400 After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step.
This is considering as steps involved in each grade. So maximum salary – minimum salary / desired step = value 50400 – 33600 = 16800 / 4 = 8400 The six steps are 853-1103, the difference between this, is 250 which are divided by 2, the result is 125, this value is added with 853 and the result is 978. This 978 considered as midpoint. This midpoint touches the salary of 58000. The mid salary of 58000 is percentage by 18 and value is 10440. So, The minimum salary is 58000 – 10440 = 47560 The Maximum salary is58000 + 10440 = 68440
After that the value of maximum salary is deducted from minimum salary and this value is divided by desired step. This is considering as steps involved in each grade. So maximum salary – minimum salary / desired step = value 68440 – 47560 = 20880 / 2 = 10440 6. Pay Grade Inflation In context of Bangladesh the inflation rate is 10%. So we have use the rate of 10% for calculation the salary. The salary after calculate the inflation is given in below. This graph shows the actual pay of each grade which represent by red color and green color represent the inflation pay for each grade.
The summary of pay after calculates the inflation. |Job Grade |Actual Pay |Adjusted | | | |Pay | |G-6 |68440 |75284 | |G-5 |50440 |55484 | |G-4 |48000 |52800 | |G-3 |40000 |50000 | |G-2 |28800 |31680 | |G-1 |18000 |19800 | 7. Steps of Pay Grade
These six jobs have the following steps involved in each grade of each Job. |Pay Grade | |G-6 |0. 43 % | |G-5 |0. 50 % | |G-4 |2 % | |G-3 |3 % | |G-2 |8 % | |G-1 |8 % | For grade-6 = Maximum salary – minimum salary ? minimum salary ? 100 = (68440 – 47560) ? 47560 ? 100 = 0. 43 %
For grade-5 = Maximum salary – minimum salary ? minimum salary ? 100 = (50400 – 33600) ? 33600 ? 100 = 0. 50 % For grade-4 = Maximum salary – minimum salary ? minimum salary ? 100 = (48000 – 16000) ? 16000? 100 = 2 % For grade-3 = Maximum salary – minimum salary ? minimum salary ? 100 = (40000 – 10000) ? 10000 ? 100 = 3 % For grade-2 = Maximum salary – minimum salary ? minimum salary ? 100 = (28800 – 3200) ? 3200 ? 100 = 8 % For grade-1 = Maximum salary – minimum salary ? minimum salary ? 100 = (18000 – 2000) ? 18000 ? 100 = 8 % 0. Pay Grade Overlap By Using MS Excel we have calculate the pay grade Overlap. The results of each grade overlap are shown in below |Pay Grade | |G-6 |0 | |G-5 |17. 27 | |G-4 |62. 5 | |G-3 |80 | |G-2 |73. 43 | |G-1 |92. 5 |
Overlap between grade-1 and grade-2 (G-1 maximum salary –G-2 minimum salary) = ? ? 100 (G-1 maximum salary – G-1 minimum salary) (18000 – 3200) = ? ? 100 (18000 – 2000) = 92. 5 Overlap between grade-2 and grade-3 (G-2 maximum salary –G-3 minimum salary) = ? ? 100 (G-2 maximum salary – G-2 minimum salary) (28800 – 10000) = ? ? 100 (28800 – 3200) = 73. 43 Overlap between grade-3 and grade-4 (G-3maximum salary –G-4 minimum salary) = ? ? 100 (G-3 maximum salary – G-3 minimum salary) (40000 – 16000) = ? ? 100 (40000– 10000) = 80 Overlap between grade-4 and grade-5 G-4 maximum salary –G-5minimum salary) = ? ? 100 (G-4 maximum salary – G-5 minimum salary) (48000 – 28000) = ? ? 100 (48000 – 16000) = 62. 5 Overlap between grade-5 and grade-6 (G-5 maximum salary –G-6 minimum salary) = ? ? 100 (G-5 maximum salary – G-5 minimum salary) (50400 – 47560) = ? ? 100 (50400– 33600) = 17. 27 11. Recommendations After the study of this paper we have put some recommendations that should review by the organization. These recommendations as follow ? The compensation system of the organization should be revised. ? The company should hire more employees. The company should provide performance based salary to the employees. ? The company should carefully distribute the salary among the employees. ? The steps of the salary system should be justified by the company. ? The pay grade overlap is very high, the company should check it. ? The range of pay grade system is very high to each other grade, the company should review it 12. Conclusion: The advantages of this study just keep coming. It will help us to design the pay structure of the company and cope with change, continuously improves of the pay grade system. Enhancements to the solution’s enterprise compensation management features and functions will ensure an even greater ability for our company to implement a flexible strategic compensation policy, supported by a comprehensive compensation management solution that helps us to achieve our goals. ———————– Remuneration Packet of an employee Wage/ Salary Fringe benefits Perquisites Total Compensation Payable Incentives Non-monetary benefits CEO GM Asst. Manager Senior Executive Junior Executive Sales Executive Receptionist Peon
