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Prepared For:
Abdul Kader Nazmul
Assistant Professor
American International
University-Bangladesh (AIUB)
Prepared By:
Mohammad Azizul Haque Id: 10-94267-3
Sandra Heleny Sinthia Id: 11-94533-1
Md. Naimul Islam Id: 10-94001-2
S.M.Mustafizur Rahman Id: 10-94235-3
Section: A
Faculty of business Administration
American International
University-Bangladesh (AIUB)
Date of Submission: 4th December,2011
Employee Compensation and Benefits Management: A Study on Singer Bangladesh Ltd.
.............................................
Mohammad Azizul Haque
Id: 10-94267-3
.............................................
Sandra Heleny Sinthia
Id: 11-94533-1
.............................................
Md. Naimul Islam
Id: 10-94001-2
.............................................
S. M. Mustafizur Rahman
Id: 11-94235-3
Employee Compensation and Benefits Management: A Study on Singer Bangladesh Ltd.
Table of Contents
1.0. Introduction
1.1. Background of the Study
1.2. Rational of the Study
1.3. Objective of the Study
1.4. Methodology of the Study
1.5. Limitations of the Study
2.0. Company Profile
2.1. History of Singer
2.2. Mission, Vision, Value Statement & Management Philosophy
2.3. Board of directors
2.4. Product of Singer Bangladesh Ltd.
3.0. Compensation & Benefits Management Analysis
3.1. Compensation
3.2. Types of Compensation
3.3. Compensation as component of HRM
3.4. Job Evaluation
3.5. Job Evaluation Methods
3.6. Establishing pay structure
3.7. Board of directors
3.8. Establishing Compensation Plan
3.9. Executive Compensation
4.0. Compensation Management Practice at Singer Bangladesh Ltd.
4.1. Performance Based Evaluation measure
4.2. Compensation System of Singer.
4.3. Types of Compensation provided by singer
4.3.1. Direct Compensation Benefit provided by singer
4.3.2. Indirect Compensation Benefit provided by singer
5.0. Analysis & Interpretation of data
6.0. Problems & Recommendation
7.0. Conclusion
8.0. References
Acknowledgement
First and foremost, we would like to thank to our course instructor of the Human
Recourse Management, Abdul Kader Nazmul, Assistant Professor, AIUB, for the
valuable guidance and advice. He inspired us greatly to work in this term paper.
His willingness to motivate us contributed tremendously to our work. We also
would like to thank him for his valuable time by helping us for this term paper.
Mr.Abdul Kader Nazmul, lifted us up when we were not sure we would or could
ever get to the finish line. Thank you for supporting us, for challenging us, for
teaching us, but most of all, for believing in us. We honestly could not have done
it without you and your help.
Besides, we would like to thank the Singer Bangladesh Ltd. We are very thankful
to them as they gave their precious time for us. Their cooperation really helps us
to analyze and finalize this report.
Finally, an honorable mention goes to our families and friends for their
understandings and supports on us in completing this report. Without helps of the
particular that mentioned above, we would face many difficulties while doing this
project.
Introduction
1.1. Background of the Study
Human Resource Management (HRM) has never been as significant as it is today. Companies
want to attract, retain and motivate brains to meet objectives. Today Humans are regarded as
one of every companys assets so they need to be efficiently and effectively managed. One of
the tools companies use to attract, retain and motivate its people is Compensation
Management. Compensation is an integral part of human resource management which helps in
motivating the employees and improving organizational effectiveness.
Employees today are not willing to work only for the cash alone, they expect 'extra'. This extra
is known as employee benefits. Also known as fringe benefits, Employee benefits are nonfinancial form of compensation offered in addition to cash salary to enrich workers lives.
Human Resource is the most vital resource for any organization. It is responsible for each and
every decision taken, each and every work done and each and every result. They should be
managed properly and motivated by providing best remuneration and compensation as per the
industry standards. The lucrative compensation will serve the need for attracting and retaining
the best employees.
So, Human Resource managers task is to carefully design the organizations benefit package.
They have to plan about what benefits should offer to whom and on which basis? Definitely all
the employees will not get the same benefit. A sales person and a receptionist will get different
benefit but inadequate benefits do contribute to low satisfaction level and increase absenteeism
and turnover in employees.
Population and Sample: Among all the companies in Bangladesh one company
(Singer Bangladesh Ltd.) is selected as a sample for this study.
Among all the employees of Singer Bangladesh Ltd. 20 employees has been selected as
a respondents.
Sources of Data: Among primary and secondary source of data most of the data has
been collected from the primary source-Face to face conversation with the manager and
the officials.
Analysis: In the analysis part tabular and graphical analysis has been done using MSExcel.
Company Profile
Singer began its operation in this part (present Bangladesh) of the world in the early twentieth
century during British India establishing 3 showrooms. By the time of the separation there
were 23 showrooms. Now the company has 78 showrooms and about 96 exclusive agents all
over the country. In around 1979, the company floated its share and became a public limited
company. All through this time Singer was operating with only one product that is their sewing
machine. In 1984 it enhanced its product range by introducing their Refrigerator to the
industry.
In the year 1991 they start the marketing of the Color Television and in 1994 VCP was added
to the range. In 1995, washing machine was introduced to the consumer for test marketing.
With the success of this, the management decided to set up the Washing Machine Assembly
Factory at Dhaka, which started production from February 1996. With Washing Machine in the
Singer Electronics Complex at Jhamur, Savar, Dhaka, Singer also assembles Color Television
Black & White Television and Motor Cycle the assembly unit of which was established in
2001 and went into commercial production from 13 February 2002.
Mission
Singers delegation is to improve the quality of life of people by providing comforts, and
conveniences at an affordable price.
Vision
Singer wants to be the most admired and respected family company in the country.
Value Statement
Singer will continue to treat their employees with respect, in recognition of their contributions,
as they are the assets of the company. Singer will ensure that high standards and quality are
maintained in everything they do. Singer will continue to honor and maintain high ethical
standards.
Management Philosophy
Singers management philosophy is to work for the betterment of society.
10
Mahbub Jamil
Directors
Corporate Office
Stephen H. Goodman
Jim Kelly
Gulshan-1, Dhaka-1212
Akhtar Imam
C.K. Hyder
Tobias Brown
Jhamur,Savar
A. M. Hamim Rahmtullah
Dhaka-1340,Banglades
Company Secretary
Mohd. Sanaullah
Auditors
S.F. Ahmed & Co.
Chartered Accountants
Bankers
Dhaka Bank Ltd.
Eastern Bank Ltd.
Legal Advisor
A. Imam and Associates
Barristers and Advocates
Registered Office
39 Dilkusha Commercial Area
Dhaka-1000, Bangladesh
11
SINGER
SINGER
SEWING MACHINE
REFRIGERATOR
SINGER
SINGER
SINGER
TELEVISION
(Color, black & white)
SINGER
AUDIO SYSTEM
(Radio, player,
recorder)
SINGER
SINGER
SINGER
FAN
OVEN
IRON
SINGER
SINGER
SINGER
BLENDER
MOTORCYCLE
IPS
SINGER
Dish Washer
SINGER
Vacuum Cleaner
12
Compensation &
Benefits Management Analysis
3.1. Compensation
Employees need to be compensated for Their Efforts based on volume of predication.
Compensation refers to all forms of financial rewards received by employees. It arises from
their employment. It occupies an important place in the life of the employee. It is a
considerable cost to the employer. Compensation dissatisfaction can lead to absenteeism,
turnover, job dissatisfaction, low performance, strikes and grievances. Majority of labor
management disputes relate to compensation.
Compensation refers to the extrinsic that employees receive in exchange for their work. It is
composed of the base wage or salary and incentives or bonuses and benefit.
Compensation is a key factor in attracting and keeping the best employees and ensuring that
the organization has the competitive edge in an increasingly competitive world. The
Compensation Management component enables to differentiate between the remuneration
strategies and those of competitors while still allowing flexibility, control and cost
effectiveness. It provides a toolset for strategic remuneration planning that reflects the
organization culture and pay strategies, and it empowers line managers within a framework of
flexible budget control. Compensation management allow to control bottom line
expenditures and competitive and motivating remuneration , be it fixed pay, variable pay, stock
options, merit increases, or promotion- in other words, total compensation.
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Compensation
Direct
Pay
Indirect
Incentives
Base Pay
Benefits
Services
Merit Pay
Pay: It consists of wages and salaries received for performance work. It can be base
pay and merit pay based on job performance.
Incentives: They are provided for the employees benefit, but is not given directly to
the employee. Under indirect compensation there are two performing work. It con be
piece wage, commission, bonus, profit sharing, stock option etc.
Indirect compensations are provided for the employees benefit but is not given directly to the
employee. Under direct compensation there are two types of compensation:
14
1. An ideal compensation system will have positive impact on the efficiency and results
produced by employees. It will encourage the employees to perform better and achieve
the standards fixed.
2. It will raise the morale, efficiency and cooperation among the workers. It being just and
fair will provide satisfaction to the workers.
3. Sound compensation/ Rewards system bring peace in the relationship of employer and
employees, collective bargaining generally focus on compensation issues
4. The perfect compensation system provides platform for happy and satisfied workforce.
This minimizes the labor turnover. The organization enjoys the stability.
5. The business organization can think of compensation and growth if it has the support of
skillful, talented and happy workforce.
6. The sound compensation system is hallmarks of organization success and prosperity.
7. The success and stability of the organization is measured with pay-package it provides
to its employees.
15
Analytical
Point
Non Analytical
Factor
Comparison
Ranking
Classification
16
17
18
19
20
Administration
Competitive
ness
Consistency
Contribution
Consistency:
HRD recommend or choose to compensate the employees performing according to the
company's standard of performance level. But Singer also ensures that the performance of the
employee should maintain the consistency of performing well and up to the standard. It means,
the person who will be compensated, have to maintain and each time increase the standard of
performance level Singer wants from its employees in order to meet the company needs.
Contribution:
HRD recommend those employees who are fully contributed for the company. Anyone who
works only for to work is not countable at all for the compensation.
21
Competitiveness:
Employees who have the mentality to reach the competitive advantage levels with the company
automatically are going to be selected by the HRD of Singer. It means employee who has the
ability to accept and adapt the change and also has the ability to compete effectively and
efficiently with competitors are always motivated by giving proper compensation.
Administration:
Employees who follows the rules and regulations of Singer Bangladesh gets the additional
support BY the HRD of Singer, when compensate the employees.
22
Merit pay
Spouses Income Continuation
Direct Compensation Benefits
Gain sharing
Profit sharing
a) Merit pay: If some times any employee did any unexpected work which can not be
possible for other employees and to did that should have some additional knowledge on
that cases HRD of Singer give direct financial support to that employee to motivate
both that employees and all others of the company.
b) Spouse income continuation: If any uncertainties arise that a employee of Singer
can not able to work due to his disable situation most of the cases Singer tries to stand
beside the family of that employee.
c) Gain sharing: When a group of people did any thing extremely well and make a huge
financial profit some times Singer gives some percentage from that profit equally to
each and every members of the group. By doing this employees are being motivated to
work as a team to gain the competitive advantage.
23
d) Profit sharing: Basically it is not happen regularly and if it so than only the
percentage of the profit is distributed to the top level management Officers.
4.3.2. Indirect Compensation benefits:
Singer not only gives the direct compensation but also compensate their employees indirectly.
Company gives so many facilities for the employees to become a friendly relation with the
management and the employees.
Indirect compensation consists of:
Protection programs
Protection programs: HRD of Singer provides protection programs like Medical Insurance,
Life Insurance, Social Security etc.
Services and prerequisites: Services that Singer gives to the employees are recreational
facilities, car facilities according to the designation etc.
Others: Employees of Singer enjoy holiday facilities, sick leave, vacation etc.
Rewards System
Singer is very much concern about the reward system of the employees. Because all the time
Singer believes that no more Singer in the world would exist if each and every single employee
are not satisfied while doing their job in the company. Singer always try to give some rewards
which will cheer up the employees and makes them more attract on their own field. Basically
singer gives two types of rewards towards the employees.
1) Intrinsic reward
2) Extrinsic reward
Under intrinsic reward employees are not allowed to enjoy financial benefits from the
company. For top level or upper mid level employees can go for a) decision making
24
( while unexpected situation arises) b) personal development by getting training without any
expense c) job freedom.
Under extrinsic reward employees get financial rewards. But some times they have the chance
to get some additional benefits by the company. In a diagram extrinsic rewards are given below
Extrinsic Reward
Financial
Support
Non-Financial
Support
25
Respondents
Percentage
7
6
2
3
2
20
35%
30%
10%
15%
10%
100%
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Table: 1
8
7
6
5
4
S eries 1
3
2
1
0
S trongly
agree
A gree
Not s ure
D is agree
S trongly
dis agree
Graph: 1
Explanation: The above table and graph represents that 65% employees are agree with that the
HR department of this organization is active, 10% employees have no comments about it and
remaining 25% employees are not satisfied with the activity of HR.
The HR department of Singer Bangladesh Ltd. is active but still it needs to make some
improvement in HR activities.
26
2.
The top management communication system with the subordinates is not satisfactory.
Description
Respondents
Percentage
5
4
4
4
3
20
25%
20%
20%
20%
15%
100%
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Table: 2
Number of R es pondents
6
5
4
3
S eries 1
2
1
0
S trongly
agree
A gree
Graph: 2
Explanation: 45% of the total respondents are not satisfied with the communication system of
Singer, 35% are satisfied and 20% have no comments about it. These data represent has the
Singer has a communication gap between the managers and employees.
27
Respondents
Percentage
6
5
2
3
4
20
30%
25%
10%
15%
20%
100%
Number of R es pondents
7
6
5
4
3
S eries 1
2
1
0
S trongly
agree
A gree
Explanation: 55% of the total respondents said that they are allowed by the management to
make decision, 10% are not sure and remaining 35% are not involved in making decisions.
28
Strongly
disagree
30%
Respondents
Percentage
3
8
1
6
2
20
15%
40%
5%
30%
10%
100%
Strongly
agree
20%
Strongly agree
Agree
Not s ure
Dis agree
Agree
25%
Disagree
25%
Not sure
0%
Explanation: Among the total respondents 55% respondents are not satisfied and 45%
respondents are satisfied with the job evaluation system of singer. It represents the job
evaluation system of Singer Bangladesh Ltd. is not strong.
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5. Result of job evaluation has a great impact on job progress or job retention.
Description
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Respondents
Percentage
2
8
3
5
2
20
10%
40%
15%
25%
10%
100%
9
8
7
6
5
4
S eries 1
3
2
1
0
S trongly
agree
A gree
S trongly
dis agree
Explanation: Among 20 respondents 50% respondents states that the job evaluation has a
great impact on job progress, 15% respondents does not make any comments and 35%
respondents are not agree with that job evaluation has a great impact on job progress. So it can
be say that the job evaluation system at Singer Bangladesh Ltd should be improve.
30
Respondents
Percentage
5
3
1
6
5
20
25%
15%
5%
30%
25%
100%
7
6
5
4
3
S eries 1
2
1
0
S trongly
agree
A gree
Not s ure
Dis agree
S trongly
dis agree
Explanation: 40% respondents are satisfied, 55% respondents are not satisfied and 5%
respondents do not make any comments about the Compensation system of Singer.
So, the Compensation system of Singer is not satisfactory.
31
Description
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Respondents
Percentage
4
2
3
7
4
20
20%
10%
15%
35%
20%
100%
8
7
6
5
4
S eries 1
3
2
1
0
S trongly
agree
A gree
Not s ure
Dis agree
S trongly
dis agree
Explanation: 30% respondents believe that the Employees have a positive reaction about the
compensation system of Singer, 55% respondents believe that employees have a negative
reaction about the compensation system of Singer and 15% respondents do not make any
comments.
The above data represent that the employees of singer are not satisfied with the existing
compensation system.
32
Description
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Respondents
Percentage
3
3
8
4
2
20
15%
15%
40%
20%
10%
100%
9
8
7
6
5
4
S eries 1
3
2
1
0
S trongly
agree
A gree
Not s ure
Dis agree
S trongly
dis agree
Explanation: Among the total respondents 30% are agree with the above statement, 30% are
disagree and strongly disagree and 40% are do not know about it.
33
10. The Singer should change and add something new in its compensation system.
Description
Strongly agree
Agree
Not sure
Disagree
Strongly disagree
Total
Respondents
Percentage
10
7
2
1
0
20
50%
35%
10%
5%
0%
100%
12
10
8
6
S eries 1
4
2
0
S trongly
agree
A gree
Explanation: Among the total number of respondents 85% think that the singer should change
the compensation system. Only 5% respondents think that it should not be changed and 10%
do no make any comments about it.
34
11. The Singer Bangladesh Ltd. Offer salary increment depending on the inflation
rate.
12. The compensation system of this company is sufficient to keep you from looking
From another job
13. Is there any opportunity to move to higher salaried position at this company?
35