Compensation Objectives & Policies Factors Affecting Wage Mix Finnish Regulation Salary & Incentives Structures Benefits

Conclusion

Pay market-competitive compensation Achieve internal & external pay equity Ensure fair employee treatment Promote open & understandable pay practices Comply with all governmental compensation regulations Promote pay-for performance standards

Mesh employees future performance with organizational goals Control the compensation budget Attract new employees Reduce unnecessary turnover

Pay-for performance standard No pay secrecy open policy Different compensation options/plan for each level of managerial employee Competitive base salary (merit pay program) Short-term incentives - bonuses Long-term incentives stock plans Indirect compensation- general benefits Nonfinancial compensation perks eg: employee recognition program, special relocation benefits, etc

Internal factors BPOs compensation policy Worth of a job job evaluation Employees relative worth in meeting job requirements BPOs ability to pay

External Factors Labor market condition Area wage rates Collective bargaining cost of living legal requirements

Equal rights law, child labor law, etc. No legislated minimum wage Paid vacation Parents and family take-off 40h/week

Over time salaries (138h/4 moth;

250/year) Night- and shift work bonuses

(Assistant Facility Manager) Facility Manager Regional Manager Functional Managers CEO

: 3,000 : 4,500 : 6,000 : 7,500 : 10,000

Profit-sharing plan is intended to give all employees the opportunity to increase their earnings by contributing to the growth of organization -can help to stimulate employees to think and feel more like partners and provide better service -increases motivation

Profits may be result of factors which employees have no control

Economic conditions National emergencies If program fails to pay for several years in a row

can cause adverse effect on productivity and employee morale

5% of facility growth is shared between facility manager (and assistant facility managers) 1% of regional growth is given for regional managers Paid half yearly

Stock option plan grants to employee the right to purchase a specific number of shares of the companys stock at a guaranteed price during a time of period Price of option: -10% market closing price 30.12. If the price rises then the option occurs

Only for top management Option amount equal to year salary -> 50,000 (base salary) + [50,000 SOP*1,1 (growth of stock price) 40,000]=65,000

Assistant facility Manager 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 200000 500000 1000000 1500000

Assistant facility Manager

2000000

Facility Manager 7000 6000 5000 4000 3000 2000 1000 0 200000 500000 1000000 1500000 2000000 Facility Manager

Regional Manager 14000 12000 10000 8000 6000 4000 2000 0 200000 500000 1000000 1500000 2000000 Regional Manager

Core benefits are provided in all countries.

Flexible benefits plans (cafeteria plans)
Benefit plans that enable individual employees to

choose the benefits that are best suited to their paricular needs. Additional benefits vary among the countries.

Improve employee work satisfaction Meet employee health and security requirements Attract and motivate employees Reduce turnover Maintain a favorable competitive position

Health care Day care Cellular phone Food services Housing and moving expenses

Company car Free time activities Discounts on goods and services purchased at the companys store

Education for children Additional health care services

Free time activities

Discounts on goods and services purchased at the companys store

General guidelines for compensation that are equal in every region Wages adjusted based on the economic conditions

labor market conditions local wage rates living costs legal requirements collective bargaining

Bonus system Flexible benefits package