No.

Question Paper Code 71072

M.B.A. DEGREE EXAMINATION, AUGUST 2012.

Second Semester

Human Resource Management

102056 COMPENSATION MANAGEMENT

—

(ALL Regulations)

Time : Three hours Maximum: 100 marks

PARTA—(5 x 420 marks)

Answer any FIVE questions.

1. What is the purpose of compensation and what factors are viewed for
satisfaction?

2. Explain compensation objectives to ensure HRM competitive advantages.

3. Discuss the meaning and objectives of Job Evaluation.

4. Explain how Job analysis helps manager to make a pay decisions.

5. What are the factors affecting compensation design? Discuss briefly.

6. Discuss the basis for designing compensation for the CEO or works manager.

7. What are the different types of incentive plans? Explain any two.

S. Examine the main features of the Payment of Wages Act, 1936.

PART B — (4 x 16 = 64 marks)

Answer ALL questions.

9. (a) Discuss the role of compensation management in organizations.

Or
(b) Explain the compensation strategies. Give suitable examples to elaborate
your discussions.
10. (a) What are deficiencies of job evaluation programmes?

Or
(b) Discuss the various wage determination models.

11. (a) Discuss the theories of motivation in detail. Examine the impact of these
theories on compensation management.

Or
(b) What do you understand by the term PFP? Explain its merits and
demerits.

12. (a) What is executive compensation? What are the principles governing
executive compensation?

Or
(b) Explain the various types of incentives with suitable examples.

PART C — (1 x 16= 16 marks)

Case study —
Compulsory.

13. A financial services company, based in Chennai, was involved in the marketing
of various financial products like investment and insurance products. It was
also involved in stock-broking activities having around 5,000 employees in its
245 branches all over the country. The company had attained the leadership
position in all activities undertaken by it. Even though it was a sunrise
industry, the nature of industry was such that it was more influenced by the
market sentiment.
The company was also a competitive pay master in the industry. The company
had consciously taken care of the salary levels of various business divisions in
the company as per the prevailing practices in vogue. The compensation could
be classified into fixed and variable components. The fixed component had
elements such as basic pay, HRA, conveyance, medical and LTA. Further, the
company also rewarded its employees based on their performance, which could
be termed as variable pay. The variable pay ranged from 80% to 300% based
on the performance and also the level at which the employee was placed.
In spite of the fact that the company was paying market driven salaries to its
employees along with performance rewards, the employees did not appear to be
motivated to the expected levels. The reason that came to the knowledge of top
management were as follows.
Since several multinational companies also have been operating in the
financial services business, the expectations of the employees of this company
appeared to be quite high.

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