DAYANANDA SAGAR BUISNESS SCHOOL

PGDM AICTE (II Year, V Term) 2016

COURSE : PERFORMANCE AND COMPENSATION MANAGEMENT
Sessions : 22
Maximum Marks: 100
Name of the Faculty: Smt. Jahnavi K.N
Course objectives: Equip the students to understand the changing environmental and its impact on managing
the Performance Management to attain the competitive advantages and corporate
excellence
Enable the students to understand the linkages between corporate strategic policies and
Performance Management
2 sessions
Unit 1: Performance Management: Introduction-Definition, concerns and scope-Historical
development in performance management -performance appraisal Vs performance management
performance management Vs HRM-processes for managing performance Essence and
Implications of performance Management critical appraisal.
4 sessions
Unit 2: Setting objectives Organizational and individual performance plans- Components of
managee performance and development plan- setting mutual expectations and performance
criteria. , Objectives and Principles of monitoring monitoring process periodic reviews
problem solving role efficiency.
4 sessions
Unit3: Performance Appraisal: Introduction, purpose of Appraising attributes of a good
performance appraisal system, Method of appraisal Appraisal system design-Implementing the
appraisal system Performance Apraisal model, Appraisals and HR decisions .Case Discussion:
Cold war for appriaisal.Case Study: Performance management at Tata Consultancy
4 sessions
Unit:4 Compensation Management: Introduction: Compensation meaning, definition of
compensation, types of reward system, components of reward system (wages, salaries,
incentives, perquisites and non monetary benefits), factors influencing employee remuneration,
role of reward system.
Theories of wages & Wage legislations: Maslows Hierarchy of needs Herzberg two factor
theory of motivation, Just Wage Theory, subsistence theory, Wage fund Theory,

Standard of Living theory, Residual claimant theory, Marginal productive theory, Bargaining
theory & Behavioral theories, Expectancy theories, Equities theory. Wage Legislations
Payment of wages Act, Minimum Wages Act, and Payment of Bonus Act.
4 sessions
Unit-5: Strategic Compensation planning, determining compensation planning, determining
compensation - the wage mix, development of base pay system, Job evaluation systems, the
compensation structure - Wage and salary surveys, the wage curve, pay grades and rate ranges,
preparing salary matrix, government regulation on compensation, fixing pay, significant
compensation issues, Compensation as a retention strategy. Challenges of compensation
Performance based compensation, skill based pay Vs. Job based pay, pay reviews, pay secrecy,
comparable worth. Case: Loyal Employee- You are at cross roads
4 sessions
Unit -6: Variable Pay and Executive Compensation: Strategic reasons for incentive plans,
administering incentive plans, Individual incentive plans - Piece work, Standard hour plan,
Bonuses, Merit Pay, Group incentive plans - Team compensation, Gain Sharing incentive plans,
Enterprise incentive Plans - Profit Sharing Plans, Stock Options, ESOPs. Enterprise incentive
Plans - Profit Sharing Plans, Stock Options, ESOPs. Case Study.: Farmington
Text Books:
Prem Chadha: Performance Management
T. V. Rao. Appraising and Developing Managerial Performance
Reference Books:
David Wade and Ronad Recerdo. Corporate Performance Management
Henderson: Compensation Management in a Knowledge Based World.
Michael Armstrong & Angela Baron, Performance Management
Case Discussion:
1. Farmington
2. Performance Management at Tata Consultancy
3.

Loyal Employee- You are at cross roads

4. Cold War for appraisal

Assignment: Explain any five methods of Performance appraisal system.

Project: Make a project report by comparing the Performance Appraisal System of any two
organizations of your choice.
Scheme of evaluation for 100 marks
Evaluation
Attendance &Class participation
Case discussion
Assignment
Test/business quiz
Project
End Term Examination
Total

Weight age
10 marks
10 marks
10 marks
10 marks
10marks
50marks
100

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