2. Compensation is what employees receive in exchange for their labor in an orga
ID: 383935 • Letter: 2
Question
2. Compensation is what employees receive in exchange for their labor in an organization. The management of compensation is concerned with the design, implementation and maintenance of remuneration systems that will help an organization to achieve its objectives. i. Distinguish between wages and salaries with an appropriate example. 4 marks) i. Explain FOUR (4) benefits of compensation system in a company. (8 marks) ii. Briefly describe FOUR (4) types of individual incentives program that company provides to employees. (8 marks) Total: 20 marks) CONFIDENTIALExplanation / Answer
1. Following are the difference between the wages and salaries------------
salaries------------Salaries is the fixed amount , which is paid to the employees at the regular interval of time on the basis of their productivity, it is paid at the end of the every month. salary is fixed, salary is also predetermined and itis predetermined between employeer and the employee. it is paid on the performance basis. there is no extra pay for extra hour. ex employee should rescive 30000 per month salary at the end of every month
wages----------Wages are paid on the daily basis, wages is given to the labour on the basis of amount of work fininshed by the labour. wages is not fixed, wages are variable in nature and it is depend upon the performance of the labour. it is paid on hourly basis , there is extra pay for extra hour. ex worker rescive 500 wages on daily basis for the task he performed.
2. Following are the advantages and benefits of the compansation system in the company--------
1. Compensation system provide job satisfaction to the employees , which in turn imprrove the performance of employees and increases the profit of the company.
2. compensation plan also motivate worker to work for the benefits of the company.
3. There is low absentism in the office , as worker enjoy there job due to good salary and compensation by the company.
4. It also plays an important role in retaining employes which saves company money in training the employees and also maintain the knowledgeable workforce in the company.
3. Following are the four types of individual incentives program that company would provides to the employee-------------
1. Time based individual incentive programme------time based individual incentives programme include halsey plan, rowan plan, emerson plan, bedeaux plan.
Halsey plan--------under this plan minimum wages are gaurantee to the every worker and standard time is fixed for the every worker.worker should get bonus if they finished there task before that standard time.
rowan plan----------It can also gaurantee the minimum wages like halsey plan and also dont penalize the worker for the slow work.
emerson plan------under this also minimum wages are gaurantee to every worker and also efficency is measured on the basis of comparision between actual performance with fixed standard,
bedeaux plan----under this standard time for each job is fixed , after undertaking time and motion study expressed in term.
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