PROJECT REPORT

ON
COMPENSATION MANAGEMENT
IN
“HERITAGE FOOD (INDIA) LIMITED”
By
Dr. RAJINDER KAUR SOKHI
REG. NO: 890220050

SUBMITTED IN PARTIAL FULFILLMENT OF THE REQUIREMENT FOR

THE AWARD OF THE

POST GRADUATE DIPLOMA IN MANAGEMENT

(2017-2019)

All India Management Association

(Center for Management Education)
 DECLARATION

I, the undersigned, hereby declare that the project report entitled

“Compensation Management” carried out at Heritage Food (India) Limited. Is

my original work written and submitted by me in partial fulfillment of Post Graduate

Diploma in Management from All India Management Association with Human

Resource Management. I also declare that this project has not been submitted

earlier in any other university or institution.

Date: 2 3 /11/2019 Dr Rajinder Kaur Sokhi

 ACKNOWLEDGEMENT

I take this opportunity to extend my profound thanks and deep sense of

gratitude to the authorities of Heritage Food (India) Limited for giving me the

opportunity to undertake this project work in their esteemed organization. I

profusely thank Mr. D Seetharamaiah (Management Committee, Chairperson)

My sincere thanks to Hon’ble Director Mr. Neeraj Agarwal, (Catalyst Institute

of Management and Advance Global Excellence - [CIMAGE] and my project

guide Mrs. Rituparna Nanda for the kind encouragement and constant support

extended in completion of this project work from the bottom of my heart

I am also thankful to all those who have incidentally helped me, through

their valued guidance, co-operation and unstinted support during the course of my

project.

Dr Rajinder Kaur Sokhi

 INDEX

S.No: CONTENTS PAGE NO.

1 INTRODUCTION 1-06

2 NEED FOR THE STUDY 06

3 SCOPE OF THE STUDY 07

4 RESEARCH METHODOLOGY 07-09

5 BIBILIOGRAPHY 10
INTRODUCTION:

Compensation Management is an integral part of the management of the organization.

Compensation Management contributes to the overall success of the organization in several
ways. To be effective, the managers must appreciate the value of competitive pay, their human
resources, and have an investment view of payroll costs. We want to maintain pay levels that
attract and retain quality employees while recognizing the need to manage payroll costs.

Pay is a difficult topic of conversation in most organizations. In fact, the topic is altogether taboo
in many workplaces. It simply isn't discussed unless absolutely necessary. And, when it is
necessary, such as when a pay raise (or lack of one) must be explained to an employee, many
managers find themselves at a loss for words. As the dreaded date of such a discussion approaches,
managers may begin checking their sick time banks to see if they can disappear for a day or two.

While it may be a touchy subject, pay is a critical factor in the work lives of employees. Jobs are
accepted or rejected based in part on starting salary and the opportunity for future increases in
pay. Employees compare their pay to that of others in the same line of work. They constantly
compare their pay level to their level of contribution, trying to determine whether the ratio of
give and receive is a fair one. While it may not be a frequent topic of open discussion, employees
think about pay often.

Approaches of compensation management

There are 3P approach of developing a compensation policy centered on the fundamentals of

paying for Position, Person and Performance. Drawing from external market information and
internal policies, this program helps establish guidelines for an equitable grading structure,
determine capability requirements and creation of short and long-term incentive plans.

The 3P approach to compensation management supports a company's strategy, mission and

objectives. It is highly proactive and fully integrated into a company's management practices and
business strategy. The 3P system ensures that human resources management plays a central role
in management decision making and the achievement of business goals.

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* Paying for position

* Paying for person

* Paying for performance

Because it is so important to employees, the issue of pay deserves to be clearly addressed. In

spite of their hesitance, managers are capable of dealing with this sometimes difficult issue in a
professional and effective manner. By keeping the following basic points about pay in mind, they
can address virtually any pay-related topic with their employees in a professional and productive
manner.

Specificity is Key

Pay is a topic with many different shades and a variety of implications. Whenever approaching
the subject, it is important to work out the details beforehand so that specifics can be clearly
communicated. For the manager, this means that the increase amount is nailed down before
discussing a promotion with an employee. No chance of misunderstanding or false expectations
can be permitted. Far too often, managers are apt to discuss generalities. "It will mean a good
increase." What exactly does that mean in terms of the employee's monthly budget? If care is not
taken here, good news can become the source of conflict and resentment.

By the same token, if asked for a raise, the manager should request that the employee suggest a
specific number that he believes reflects his value. Once the employee provides that number, the
manager can do his homework and decide what, if anything can be done. The employee can then
be given a definitive response.

Pay is Relative

What one employee considers a fantastic increase maybe an insult to another? Each individual
has a unique set of creativity and competencies. Pay should be based on the performance,
position and the competencies/skills the person is having.

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Pay is Not Created Equal

Various forms of pay have different purposes. The two most common forms of direct cash
compensation in most companies are base pay and bonus. Base pay is the annual salary or hourly
wage paid to an employee given the job he holds, While bonus is typically (or at least should be)
rewarded based on the achievement of a goal of the organization.

Discussions about bonus payments should be as specific as possible. This is the opportunity to
point out particular accomplishments that contributed to overall team or company success. Even
if the bonus is paid to all employees based on a simple overall company profit target, the
manager should use the opportunity to point out specifically how individual employees helped
achieve that target.

Distributing bonus checks presents a unique motivational opportunity for a manager. Handing
money to an employee while discussing actions and behaviors he would like to see repeated, creates
a powerful link between performance and reward.

Discussions about base pay increases can be a bit different. Most companies claim to link their
annual base pay increases to performance. In reality, however, base pay decisions take into account
a variety of factors, including the relative pay of others in the same job, the company's increase
budget, market practices and where the individual falls within his pay range. Even when
performance is a factor, the manager is faced with the difficult task of evaluating an entire year's
worth of activity and then categorizing it according to the percentage increase options allowed by
the budget. It becomes very difficult to pinpoint specific employee actions or accomplishments
as the reason for the increase.

For these reasons, it's appropriate for the discussion about base pay increases to be more general
and balanced. Both strengths and weaknesses of the employee should be addressed. The actual
increase is then based on an overall assessment, as opposed to a link with one or two specific
outcomes. Any other factors that impact the increase percent, such as budget or pay range should
be openly discussed as well.

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'Why?' is Critical?

All organizations pay according to some underlying philosophy about jobs and the people who
do them. This philosophy may not be in writing, but it certainly exists. Pay maybe treated in a
formal and structured manner at one company. At another, any appearance of structure is
intentionally avoided so that decisions can be made arbitrarily. Either way, the approach taken
reflects a fundamental belief about people, motivation and management.

Managers often want to view each individual as a separate case. It is important to understand,
however, that employees operate within a compensation system. A manager is wise to take the
time to learn as much as possible about his company's compensation system. This knowledge
will form the context for pay discussions and will go a long way toward helping the employee
make sense of what is said.

While the answer to "how much?" is of course important to employees, they are also concerned
about the "why?" of pay. In other words, while the actual amount of pay is very important,
employees also are interested in the rationale used to determine it. Research has shown that pay
satisfaction increases with understanding of the pay scheme.

Managers often leave this area to the HR department. Ideally, however, managers themselves
will be the primary conduit of information on this topic. If a manager does not know the company's
pay philosophy, he should seek out whomever in the organization is responsible for pay
administration and get the answers he needs.

Is pay based on an analysis of market pay practices? Is it affected by the bonus plan? Are certain
jobs considered critical and, therefore, treated differently? Do pay decisio ns take training and
education into account? Answers to these questions will help managers help employees understand
the organization's philosophy and the decisions resulting from it.

Job seekers who go into the negotiation process with their eyes wide open keep an important fact
in mind: A few thousand dollars one way or the other can quickly become a gain or a loss
depending on other benefits. Money is important, but it must be put in the context of other pros
and cons--some of which have a dollar value and some of which do not.

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The company's health plan, bonus plan, life insurance benefit match are just a few of the rewards
with a dollar value. Beyond these, but just as important, are factors such as career development,
camaraderie among teammates, flexible schedules, etc. Ask employees in a lousy work
environment, and they will testify that these factors should never be understated.

Managers should be the company's biggest ambassadors when it comes to the value of benefits
and work environment factors. Sharp companies do a good job of showing the value of these
items. Smart managers will communicate their value, as well, especially when discussing pay.
For example, when offering a promotion to an employee, a manager should consider all the
potential benefits. What developmental opportunities are involved? Is there an increase in status?
Will the move mean additional interaction with key players? All of these, as well as any increase
in tangible pay and benefits should be discussed.

Speaking of Pay with Confidence

Discussions regarding pay do not have to be awkward--they can be clear and productive if
managers adhere to the basics outlined above. Rather than a taboo, pay can be addressed in an
up-front manner if managers do their homework, get prepared and go into the discussion with the
confidence that comes from knowledge.

Pay discussions should deal with specifics. In preparing for the discussion, the manager must
remember that pay is relative and nothing can be assumed about the employee's response. The
purpose of the particular aspect of pay being addressed is important, and the manager must be
able to discuss the issue in the context of the organization's pay philosophy. Finally, the many
faces of reward in the workplace cannot be overlooked.

If managers follow these guidelines, their pay-related communication with employees will result
in clarity and respect. In addition, they will avoid the misunderstanding and resentment that
results from avoiding this critical issue.

To conclude we can say that compensation is a hot potato for the Human Resource Department.
The motivation level of the employees to great extent lies in monetary rewards. If paid well can
generate results for the organization, failed can create problems. The major challenges what

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managers face today is retention of the man power and the major cause of it is that they are paid
better in the other organizations. A satisfied employee is a productive employee and care should
be taken that they are fairly paid for their worth in the organization.

NEED FOR THE STUDY:

Compensation management of the employees is important if the

employees are satisfied then only the organization can function smoothly increases its
production, faces competition.

If employees are satisfied with their job they will carry a positive attitude. Hence the
study has been undertaken to assess the employee Compensation which is necessary for the
organization in order to make sound decisions.

Objectives:

1) Understand the concepts of compensation management in Heritage Foods (India)

Limited.

2) Explore the role of c compensation management

3) Pay roll system in Heritage Foods (India) Limited..

Other Objectives:

 Maintain pay equity

 Simplify the system

 Create a new “mindset”

 Give managers more autonomy

 Increase transparency

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SCOPE OF THE STUDY
The compensation management in Heritage Foods (India) Limited.. refers to a person’s feeling
of satisfaction on their job. It is different from person to person. The researcher has chosen to
measure the level compensation management in Heritage Foods (India) Limited..

The study considers the impact of 10 factors on compensation management in it

concentrates on the effect of factors in general, but no exclusive study is made on them.

The study considers only the perceptual elements o f employees and does not
focus on ground realities. The scope of study cover: work conditions, compensation, extra benefits,
conveyance treatment of superiors, colleagues, duly timings, and grievance reprisal mechanism
and promotion policy.

RESEARCH METHODOLOGY

The methodology that is adopted for the study is such that it facilities the data
accumulation. The information is gathered through survey method. The survey method has been
adopted for collecting the data from employees.

 RESEARCH DESIGN:
Research Design is defined as the specification of methods and procedures for acquiring the
information needed. Generally the research design is any of the following three types-
DESCRIPTIVE, EXPLORATORY and CASUAL.

 DESCRIPTIVE STUDY:
Descriptive study/research is marked by the prior formulations of specific research questions.
The investigator already knows a substantial amount about the research problem before the
project is initiated. Hence this is chosen for my research.

 EXPLORATORY STUDY:
The major purpose of exploratory study is the identification of problem, the more precision
formulation of problem and the formulation of new alternative courses of action.

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  CASUAL STUDY:
The study involves the determination of the causes of what the researchers are predicting.
this is mainly a cause and effect study.

The research design selected by the researcher in the present study is

“DESCRIPTIVE” in nature.

 RESEARCH INSTRUMENT:
HR research has a one main research instruments in collecting primary data. That is
questionnaires.

In order to extract firsthand information from the respondents, a pre-tested questionnaire

was prepare and the same was administered to the respondents.

 DATA SOURCES:
Data means a collection of facts in real life statistical data is a collection of facts in numerical
figures. The data sources are usually identified using the type of data needed. There are two
types of data.

1. Primary data
2. Secondary data
 PRIMARY DATA:
The firsthand information by the investigator by means of observation face to face
questioning, telephone interview and mailing questionnaire is called primary data.

Primary data consists of original information gathered for a specific purpose.

 SOURCES OF PRIMARY DATA;-

For the purpose of present study, the primary data collected from respondents by contacting
them personally.

 SECONDARY DATA:
Secondary data consists of information that already exists somewhere, having been collected
for another purpose

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  SOURCES OF SECONDARY DATA:
For the purpose of present study, the secondary data was collected from published data of the
companies. Population is the aggregate of objects animate and in animate, under study in any
statistical investigation. The population for the study here was employees in Heritage Foods
(India) Limited.

SAMPLING PROCEDURE
With a view to arrive at the sample population for the study, a “Purposive-Cum convenient
sampling” was followed.

SAMPLE SIZE
4) The sample size includes 100 employees who are working in the in Heritage Foods
(India) Limited..

LIMITATIONS OF THE STUDY:

1. This study covers those employees who are working at Heritage Foods (India)
Limited..
2. The understand and knowledge may vary from person to person. The replied gives by
the respondents are taken for granted, though they are not uniform.

3. Since names are mentioned in most of questionnaires, most of the employees

answered favorable to the company. This might have led to wring finding in the
study.

4. The interpretation being based on percentage method is not definite.

5. The report is subjects to changes with fast changing scenario.

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 BIBLIOGRAPHY

BOOKS

Aswathappa.k, Human resource and personnel management, 3/e, TMH, 2003.

Mamoria.C.B and Gankar.S.V. Personnel management, text and cases, Himalaya Publications,
2003.

Gary Dessler, Human Resource Management, 9/e, Prentice Hall India, 2003.

G.C. Berry, Business Statistics, 2/e, TMH, 2003.

S.P. Gupta, Statistical Methods, 34/e, Sultan Chand & Sons.

JOURNALS

Personnel Management, June, July, August, editions(2014).

Human Capital, June, July, August, editions(2014).

Indian Management, April, June, November, editions (2014).

INTERNET

http://www.heritage.com

http://www.retailindia.com

http://www.google.com

http://www.wikipedia.com

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