INTRODUCTION

Compensation Management in otherwise called as wage and salary and

administration. Services rendered by individuals to organization have to be adequately
paid for. This compensation generally comprises cash payments, which in addition to
wages includes pensions, bonus for good work and shared profits.

Compensation could also be in the nature of promotions or words of praise.

Workers also drive a certain amount of personal satisfaction as compensation for a job
well done. It is difficult to outline and explain every aspect of the payment of
compensation. Besides wages there are certain aspects of job compensation which an
employee looks for ,such as job content , responsibility, creativity and so on.

Compensation Management is an integral part of the management of the

organisation . Compensation management contributes to the overall success of the
organisation pay ,their human resources , and have an investment view of payroll
costs . It is of prime importance for an organization to maintain pay levels that
attract and retain quality employees while recognizing the need to manage payroll costs.

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. Performance management, compensation budgeting, Personnel
cost planning, salary benchmarking and payroll.

A good compensation management system should be able to attract and retain employee,
give them a fair deal, keep the organization competitive and motivate employees to perform
their best.
COMPENSATION:

It is what employees receive in exchange for their contribution to the organization.

(Money is direct compensation and benefits are indirect compensation)

DEFINITION:

The term compensation “is of a recent origin which includes everything on

employee individual receives in return for his work. It is a comprehensive term which
included of sub-processes directed towards remunerating for the people services rendered and
motivating them to attain a desired level of performance.”

It includes all expenditure of valued resources by the organization for the

Employees include managers and professionals as well as blue and white collar workers.

“Employee may see compensation as a return in an exchange between their

Employer and themselves as an entitlement for being an employee of the company or as
reward for a job well done.

WAGE:

The amount paid by the employer for the services of hourly, daily, weekly and
fortnightly. Employees are directly involved in production, which is given to blue collar
workers.

SALARY:

A salary is a form of payment from an employer to an employee, which may be

specified in an employment contract. It is contrasted with piece wages, where each job, hour,
or other unit is paid separately, rather than a periodic basis.

FACTORS INFLUENCING ON COMPENSATION:

The organizations ability to pay.

 Supply and demand of labour

 The prevailing market rate
 Productivity of labour
 Trade Unions bargaining power
 Job requirements
 TYPES OF COMPENSATION

“Compensation means something, such as Cash, which gets as a payment for providing
service by any employee to their employers. Compensation may be defined as money
received in the performance of work, plus some non -monetary gains which are provided by
the organizations to their employees.”

{“Compensation includes direct cash payments, indirect payments in the form of

employee benefits and incentives to motivate employees to strive for higher levels of
productivity”} – Cascio

“Compensation is the remuneration gets by an employee in exchange of higher work

which they do for the organization. It involves balancing the work employee relation by
providing monetary and non- monetary gains or incentives to employees.”

Mainly compensation can be divided into two parts:

(1) Monetary compensation and

(2) Non- Monetary compensation.

Monetary compensation includes direct compensation and indirect compensation.

The direct compensation is used to describe remuneration in terms of money usually cash and
consist such elements like as basic pay, dearness allowance, overtime pay, extra shift
allowance, incentive, bonus, profit sharing bonus and commissions, etc.

Indirect compensation or fringe benefits refer to such gains like as provident fund, pension
scheme, medical and health insurance and sick leave and various other benefits and perks.

Non- Monetary compensation consists praise and recognition and satisfaction of employees
from the organization for their performance.
 OBJECTIVES OF STUDY

 To understand the concept of Compensation Management in Ambica Sea Green hotel.

 To know about the statutory and non-statutory providing to the employees by the
organisation.

 To know whether the wage and salary are perfectly administered in the organisation.

 To know various benefits providing to the employees by the organisation.

 To study is the compensation management attract talented personnel.

 To study how job evaluation techniques are followed in the organisation.

 NEED FOR THE STUDY

A good compensation package is important to motivate the employees to increase the

organizational productivity. The most competitive compensation will help the organization
to attract and sustain the best talent. The compensation package should be as per
standards. Unless compensation is provided no one will come and work for the organization.
Thus, compensation helps in running an organization effectively and accomplishing its
goals. Salary is just a part of the compensation system, the employees have other
psychological and self- actualization needs to fulfil .Thus, compensation serves the purpose.

Compensation management targeted at optimizing cost of compensation by

maintaining relation between performance and compensation of every employee.
Compensation management tries to obtain consistency in both internal and external for
remunerating employees. Internal consistency consist payment on the basis of criticality of
jobs and employees’ performance on jobs. External consistency involves similar
remuneration for a job in all organizations.

Compensation management targeted at motivating human beings or employees for

higher productivity. Compensation can be designed or planned to inspire or encourage people
through financial and non- financial compensation.

From organization’s point of view, every organization wants new talent and skill
from outside, for this purpose the compensation management targeted at attracting and
retaining right human resource at right place in the organization time to time.
 SCOPE OF THE STUDY

This study covers the basic system of compensation management. We have put out all
efforts to prepare this paper in such way which will help us it for further information needed.
As the functions of HR Department are endless, this study emphasizes only on the role and
importance of HR Department for an organisation. Hence, this study tries to reveal the role
and importance of Human Resource Development, by giving scope for the further study in
this area.

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 METHDOLOGY
This chapter deals with the title of the study, the need for the study i.e., for what Purpose the
study is actually carried out, the scope of the study, the objectives of the study, what are the
various sources of data collection, the study instruments used i.e. whether questionnaire,
interview, schedule etc., the way the data is analysed, the presentation of the study and finally
the limitation involved in the study.

POPULATION AND SAMPLING TECHNIQUES:

The sample for the study was chosen by means of simple random sampling technique. The
sample covers all categories of employees from several departments of the company. As the
study as intended to the `Compensation Management System in the organisation. It was
decided not to restrict the study to particular department (or) section. Hence the sample
covers the employees from various departments. The size of the population is 100 employees
as on date. The size of sample was fixed to 50 employees

SOURCES OF DATA COLLECTION:

Data is collected through primary data and secondary data. Primary data is collected with
Taking 50 employees as sample size and Secondary data is collected with sample size,
Journals, internet etc.

Primary Data:
Primary data is the data, which is collected for the first time by investigation through
Questionnaire and personal interviews for the management of Ambica Sea Green Hotel by
visiting various departments and observing employees and their attitude towards the
compensation provided by the organization.
Process of gathering information:
● Questionnaire is prepared according to the needs and priorities of the company.

● This questionnaire has to collect all the information regarding the questions.

● The survey has to be conducted on this, which consists of sample size of 50 employees
within the Ambica Sea Green Hotel.

● While surveying the opinions of the people are taken into records.

Secondary Data:
Secondary data is the data, which is already collected by some person, internet, and
journals etc.

Through simple random sampling of the primary data, there is no equal chance of including
each and every employee of the organisation. The sample size is 50 where in there are equal
opinion regarding provision of express their management of the company.

STUDY INSTRUMENTS:
The questionnaire is framed to find out the Compensation management of Ambica
Sea Green Hotel. The questionnaire containing fifteen questions, in that fifteen questions
and is elicit the suggestion from the employees.
 FRAME WORK OF THE STUDY

The Study ‘COMPENSATION MANAGEMENT ‘was presented in following five chapters.

CHAPTER -1:

Chapter 1 consists of introduction to the study it includes need for the study, objectives,
methodology and limitations.

CHAPTER -2:

Chapter2 consists of an overview of HOTEL industry and COMPANY profile of the

‘AMBICA SEA GREEN HOTEL’

CHAPTER-3:

Chapter3 mainly focus on the theoretical aspects on the concept of COMPENSATION

MANAGEMENT.

CHAPTER-4:

Chapter4 shows the analysis and interpretation in which the gathered data was analysed.

CHAPTER-5:

Chapter5 discuss about the summary findings and suggestions of the study.
 LIMITATIONS OF THE STUDY

❖ The survey and sampling in conduct in Ambica Sea Green Hotel.

❖ The set and regulations of the organisation do not permit probing beyond a certain Level.
Even the respondents have a limitation to deliberate.

❖ 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.