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A STUDY ON

COMPENSATION MANAGEMENT
AN ANALYSIS IN RESPECT OF SALARY IN ANDHRA PRADESH POWER GENERATION CORPORATION (APGENCO) A Synopsis submitted to the Indira Gandhi National Open University (IGNOU) in partial fulfillment for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION


BY M. GOPI KRISHNA
(Reg. No: 111205079)

Under the Guidance of

G.DAVID RAJU MBA., M.Phil. (HRM)


Dept. of Business Administration KBN College-PG Center, Vijayawada, AP.

SCHOOL OF MANAGEMENT STUDIES


INDIRA GANDHI NATIONAL OPEN UNIVERSITY NEW DELHI
INTRODUCTION

Compensation programs have been used successfully for years to motivate sales professionals. Now, a growing number of companies are looking to build on that model and apply it throughout the organization with total compensation management. The motives are to better align employee performance with business goals, and to increase employee satisfaction and re Many of today's senior executives name pay-for-performance as the most critical tool in achieving the greatest financial results at their companies. But, implementing real, pay-for-performance is easier said than done. Success Factors makes it easy for you to quickly and easily implement a powerful pay-for-performance strategy. By rewarding great execution, you will better retain your top talent and drive organizational performance that exceeds all expectations. Plus, you'll enjoy clearer visibility into individual employee performance when it comes time to make critical compensation planning decisions. It can be said that compensation is the glue that binds the employee and the employer together and in the organized sector, this is further codified in the form of a contract or a mutually binding legal document that spells out exactly how much should be paid to the employee and the components of the compensation package. Since, this article is intended to be an introduction to compensation management, the art and science of arriving at the right compensation makes all the difference between a satisfied employee and a disgruntled employee. Though Maslows Need Hierarchy Theory talks about compensation being at the middle to lower rung of the pyramid and the other factors like job satisfaction and fulfilment being at the top, for a majority of employees,
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getting the right compensation is by itself a motivating factor. Hence, employers need to quantify the employees contribution in a proper manner if they are to get the best out of the employee. The provision of monetary value in exchange for work performed forms the basis of compensation and how this is managed using processes, procedures and systems form the basis of compensation management. Compensation Management is an integral part of the management of the organization. Compensation is a systematic approach to providing monetary value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment, job performance, and job satisfaction. To be effective, the managers must appreciate the value of competitive pay, their human resources, and have an investment view of pay-levels that attract and retain quality employees while recognizing the need to manage payroll costs. The literal meaning compensation is to counter-balance. In the case of human resources management, compensation is referred to as money and other benefits received by an employee for providing services to his employer. Money and benefits received may be in different forms-base compensation in money and various benefits, which may be associated with employees service to the employer like provident fund, gratuity, insurance scheme and any other payment which the employee receives or benefits he enjoys in lieu of such payment. 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

Compensation is a tool used by management for a variety of purposes to further the existence and growth of the company. From the perspective of the employers, the money that they pay to the employees in return for the work that they do is something that they need to plan for in an elaborate and systematic manner. Unless the employer and the employee are in broad agreement (We use the term broad agreement as in many cases, significant differences in perception about the employees worth exist between the two sides), the net result is dissatisfaction from the employees perspective and friction in the relationship. COMPNAY PROFILE PROFILE OF THE APGENCO Andhra Pradesh power Generation Corporation limited

(APGENCO) was established by the government of Andhra Pradesh under the Andhra Pradesh electricity reform act, 1998 on 01-02-1999 with principal objective of engaging in the business of generation of electricity. The government of Andhra Pradesh (GOAP) embarked upon reforms in Andhra Pradesh Power Generation Corporation Limited (APGENCO) and Andhra Pradesh transmission corporation Limited (APTRANSCO) to look after the business of generation and transmission and distribution respectively with effect from 01-02-1999. By segregating the distribution activity from APTRANSCO four distribution companies were formed, subsequently and started functioning from 0104-2000.

OUR VISION To be the best power utility in the country and one of the best in the world.

OUR MISSION To generate adequate and reliable power most economically, efficiently and eco-friendly To spearhead accelerated power development by planning and implementing new power projects To implement Renovation and Modernization of all existing units and enhance their performance. OUR CORE VALUES To proactively manage change to the liberalized environment and global trends To build leadership through professional excellence and quality To build a team based organization by sharing knowledge and empowering employees To treat everyone with personal attention, openness, honesty and respect they deserve To break down all departmental barriers for working together To have concern for ecology and environment.

CORPORATE PROFILE Andhra Pradesh Power Generation Corporation (APGENCO) Limited is one of the pivotal organizations of Andhra Pradesh, engaged in the business of Power generation. Apart from operation & Maintenance of the power plants it has undertaken the execution of the ongoing & new power projects scheduled under capacity addition programme and is taking up renovation & modernization works of the old power stations. APGENCO came into existence on 28.12.1998 and commenced operations from 01.02.1999. This was a sequel to Governments reforms in Power Sector to unbundle the activities relating to Generation, Transmission and Distribution of Power. All the Generating Stations owned by erstwhile APSEB were transferred to the control of APGENCO. The installed capacity of APGENCO as on 25.06.2009 is 7587.9 MW comprising 3882.50 MW Thermal, 3703.4 MW Hydro and 2 MW Wind power stations, and contributes about half the total Energy Requirement of Andhra Pradesh. APGENCO is third largest power generating utility in the Country next to NTPC and Maharashtra. It's installed Hydro capacity of 3703.4 MW is the highest among the Country. APGENCO has an equity base of Rs.2117 crores with 11,000 dedicated employees as on 30.06.2009. The company has an asset base of approximately Rs.17344 crores. When APSEB came into existence in 1959, APSEB started functioning with the objectives of maintaining the power sector efficiently and economically simultaneously ensuring demand meets the supply.

OBJECTIVES OF THE STUDY The main objective of the proposed study is to find out how far the employee has been satisfied and how far their performance has been improved after the commencement of 9th pay revision in APGENCO. The secondary objectives of the study will be: 1. To understand in details how to establish pay rates to different level of employees 2. To understand the impact of compensation management on performance level. SCOPE OF THE STUDY The scope of the present project is to study of the compensation management strategies and to evaluate the behavior & performance of employee on their work. The present study is confined to study of compensation management of APGENCO, with special reference to Dr. NTTPS, Kondapalli, Vijayawada. The present study will cover both officers and non-officer cadre employees of APGENCO, with special reference to Dr. NTTPS, Kondapalli, Vijayawada. RESEARCH METHODOLOGY In order to know the satisfaction of the employees working in this organization after the commencement of 9th pay commission one set of Questionnaire Will be administered to the employees (both officers and

non officers) working in APGENCO with special reference to Dr. NTTPS, Kondapalli. I.RESEARCH DESIGN: In order to understand the satisfaction of the Employees after the commencement of 9th pay commission a brief conversation will be done with the employers. II. Data Collection through Questionnaire:- Primary data has to be collect personally from the respondents through structured questionnaire which will be designed with the consultation of the guide. The respondent will include both the officers and the non-officers of every department working in APGENCO and will analysis on the basis of their working period. III. Sampling Design & Sampling Size: - The elements of research of population or universe of interest are the peoples both the officers and non- officers of every department working in APGENCO with special reference to Dr. NTTPS. The sample size of the study consists of samples, which include a study of 70 respondents out of which 5% are officers and 15% are non officers from every department working in this organization. In this regards out of 70 samples 40 of the respondants were taken telephonic interview, 20 were given online questionnaire for the survey and for the rest were conducted an oral interview. LIMITATIONS OF THE STUDY Everything has some pros and cons and so certain limitation of this study that we could observe: The area of project work is Generation of Power Sector so, the data or result may be approximate as the conclusion will be based on the survey method i.e. primary and secondary source (filling of questionnaire from the employees) may be hypothetical (imaginary) data
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Due to secrecy, the APGENCO may not provide the full fledged information and some employees may not reveal their financial information.

PLAN OF THE STUDY (CHAPTERISATION) The whole project study is going to divide in to 6 Chapters. Chapter 1 Introduction (Objectives, need and importance of the study) Chapter 2 Company Profile (APGENCO & Dr. NTTPS) Chapter 3 Industry Profile (Power Generation Sector) Chapter 4 Theoretical framework (Wage & Salary Administration and Compensation Management) Chapter 5 Data Analysis & Interpretation (Tables, diagrams, charts etc.) Chapter 6 Findings & Suggestions

BIO DATA
1. Name 2. Address (Office) 3. Address (Res.) : : : DAVID RAJU GOLLAPUDI Dept. Of MBA, KBN College PG Center, Kothapet, Vijayawada 520 001 G.David Raju, D.No: 57-11-17/2, Sarvothama Apartments (S1), New Postal Col. Vijayawada -520 010 MBA From AU (1997-99), M.Phil. (HR) from Acharya Nagarjuna University (2005-07) Doing Ph.D. from Acharya Nagarjuna University, under the guidance of Prof. Noor Basha Abdul. (2010-11) 5. Experience : 11+ Years of Teaching experience in the Dept. of MBA (2000-till date)

4. Qualifications

Presently working for KBN College PG Centre in the Dept. of Business Administration (2006 to till date) Working as GUEST FACULTY in the Dept. of Travel and Tourism of Acharya Nagarjuna University Working as GUEST FACULTY in MBA (Hospital Administration) of NRI Medical College, Mangalagiri Academic Counselor of Management & Computer Program of IGNOU, Vijayawada Worked as a Lecturer in the Dept of MBA, Andhra Loyola College, Vijayawada, during 2003-2006 Worked as a Lecturer in the Dept of Commerce & Management Studies, VSM College, Ramachandra Puram, during 2000-2003.

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6. Project works guided

No. of Projects Works were guided to the various Universities (both regular & distance) students on different topics 7. Achievements :

Chief Superintendent of PG Examinations to Nagarjuna & Krishna Universities. Chief editor of SADBHAVANA a bi-annual magazine of KBN College Question Paper Setter to Autonomous Colleges, Vijayawada Participated in many faculty improvement programs Submitted 2 papers on Indian Economy-Trends to the ANU Submitted 2 HR papers in International Seminar An Article on New Competitive Advantages in Dynamic Landscape Building HRD Strategies was published in the International Journal 2 more articles are waiting to publish in leading magazines Organised many national and state level seminars and workshops 8. Subjects Taught: 1. Managerial Economics 2. Human Resources Management 3. Accounting & Financial Management 4. Marketing Management 9. Date of Birth : 10th May, 1974

Date :

G.DAVID RAJU

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