SYNOPSIS

A STUDY OF COMPENSATION SYSTEM IN COCA COLA LIMITED

Human Resource Management Project Report [Submitted in Partial Fulfillment] [Fourth Semester: January May, 2013]

As a part of curriculum of Master of Business Administration (MBA) From Bhai Parmanand Institute of Business Studies

Affiliated to Guru Gobind Singh Indraprastha University, Delhi Submitted By: Reena Gujral Roll No. 02411403911 MBA IV Semesters Bhai Parmanand Institute of Business Studies Shakarpur, Delhi-9 1 Submitted To: Shri.S.Thiyagarajan Project Guide

INTRODUCTION Compensation Management

Services rendered by individuals to organizations 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 can also be in the form of promotion 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 payment of compensation. Beside wages there are certain amount of job compensation which an employee look for responsibility, creativity and so on. such as job satisfaction, job content,

Compensation building blocks

Effective Compensation views total compensation as a strategic collection of a number of programs developed to accomplish specific organizational objectives. The programs can be classified into the following categories:

Base Salary - the fixed amount to be paid (often for performance) according to a system of job classification or market based criteria.

Incentives - additional variable pay based on performance against objectives and payable in cash, stock or tax-deferrable arrangements.

Protective - programs which insure employees against loss of life or earning ability and which insure against major current expenses: Life insurance Medical insurance Survivor's income Dental insurance Disability income Capital Accumulation - programs, usually stock plans, that provide the opportunity to establish a personal estate under attractive conditions. Phantom equity arrangements and long-term incentives can also be included under this category. Such programs should serve the owners by aligning management's interests with that of the shareholders. Retirement Income - plans that defer income for services rendered to a later payment date (qualified plans such as pensions, profit sharing, and thrift plans as well as supplemental programs and employment contracts). Perquisites - company paid allowances beyond direct pay (free parking, automobile and operating expense, expense allowance, total medical reimbursement, club memberships, etc). Paid Time off - vacations, holidays, family leave, jury duty, etc.

In addition, the way compensation is allocated to and communicated to employees affects the effectiveness of the programs.

Types of Compensation
Compensation provided to employees can direct in the form of monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time off etc. Compensation does not include only salary but it is the sum total of all rewards and allowances provided to the employees in return for their services. If the compensation offered is effectively managed, it contributes to high organizational productivity.

Direct compensation
Direct compensation refers to monetary benefits offered and provided to employees in return of the services they provide to the organization. The monetary benefits include basic salary, house rent allowance, conveyance, leave travel allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity etc. They are given at a regular interval at a definite time. Basic Salary Salary is the amount received by the employee in lieu of the work done by him/her for a certain period say a day, a week, a month etc. It is the money an employee receives from his/her employer by rendering his/her services.

House Rent Allowance Organizations either provide accommodations to its employees who are from different state or country or they provide house rent allowances to its employees. This is done to provide them social security and motivate them to work. Conveyance Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and petrol allowances to their employees to motivate them.

Fig. 2.1 Leave Travel Allowance These allowances are provided to retain the best talent in the organization. The employees are given allowances to visit any place they wish with their families. The allowances are scaled as per the position of employee in the organization.

Medical Reimbursement Organizations also look after the health conditions of their employees. The employees are provided with medi-claims for them and their family members. These medi-claims include health-insurances and treatment bills reimbursements. Bonus Bonus is paid to the employees during festive seasons to motivate them and provide them the social security. The bonus amount usually amounts to one months salary of the employee. Special Allowance Special allowance such as overtime, mobile allowances, meals, commissions, travel expenses, reduced interest loans, insurance, club memberships etc are provided to employees to provide them social security and motivate them which improve the organizational productivity.

Indirect compensation: Indirect compensation refers to non-monetary benefits

offered and provided to employees in lieu of the services provided by them to the organization. They include Leave Policy, Overtime Policy, Car policy, Hospitalization, Insurance, Leave travel Assistance Limits, Retirement Benefits, Holiday Homes.

Leave Policy It is the right of employee to get adequate number of leave while working with the organization. The organizations provide for paid leaves such as casual leaves, medical leaves (sick leave), and maternity leaves, statutory pay etc. Overtime Policy Employees should be provided with the adequate allowances and facilities during their overtime, if they happened to do so, such as transport facilities, overtime pay etc. Hospitalization the employees should be provided allowances to get their regular check-ups, say at an interval of one year. Even their dependents should be eligible for the medi-claims that provide them emotional and social security.

Need of Compensation Management

A good compensation package is important to motivate the employees to increase the organizational productivity. 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 fulfill. Thus, compensation serves the purpose.

The most competitive compensation will help the organization to attract and sustain the best talent. The compensation package should be as per industry standards.

Objectives of Compensation Planning

Some of the important objectives of compensation planning are: Attract Talent- compensation should be high enough to attract talented people. Since many organizations compete for hiring right talent and the salaries offered must be high enough to motivate them to apply. Retain Talent- the compensation levels far below the expectation of employees or are not competitive, employees may quit in frustration. Ensure Equity- pay should equal the worth of the job. Similar jobs should get similar pays likewise more qualified people should get higher pay. New and desired behavior- pay should reward loyalty, commitment, experience, risk taking and other desired behavior where the company fails to reward this behavior, employees may feel like leaving the company. Control costs-the cost of hiring people should not be too high effective compensation management ensures that employees are higher over paid nor underpaid. Comply with legal rules-compensation plans should invariable satisfy government rules regarding minimum wages, allowances, bonus, benefits etc.

OBJECTIVE OF THE STUDY

The main aim of the research is to:(1). (2). (3). A detailed study about compensation management. Survey about compensation management in Coca Cola. the contribution of compensation management to attract, retain and motivate the employee of Coca Cola.

Compensation management is the process wherein the management finds out how effective it has been for the employees.

This study shall give some suggestions for making the present training and development system more effective.

It shall give organization the direction, how to deal differently with different.

LIMITATIONS
Most of the respondent feared to give their names. Most of the employees were busy with their tight work and they didnt want to be disturbed, therefore primary data could not be collected. The data was confidential therefore the officials were hesitant to disclose it. Study was done in Delhi Branch only, hence the data cannot be generalized for all branches. Since the topic was broad as the Payroll System includes a number of allowances, all those aspects could not be covered. Due to short span of time, the study and collection of data could not be done for all branches.

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RESEARCH METHODOLOGY
A Research Methodology defines the purpose of the research, how it proceeds, how to measure progress and what constitute success with respect to the objectives determined for carrying out the research study. The appropriate research design formulated is detailed below:

MODE OF DATA COLLECTION:

Broadly there are two methods of data collection: Primary data collection method Secondary data collection method

Primary data collection method: Primary source of data implies collection of data from its source of origin. It offers you first-hand quantitative information relating to your statistical study. I have collected primary data through: Questionnaires Interaction with the respondents

Secondary data collection method: Secondary source of data implies collection of data from some agency or institution which already happens to have collected the data through statistical survey(s). It does not offer you first-hand information relating to your statistical study. You are to rely on the information which already exists.

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I have collected secondary data from: Internet Books Magazines

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CONCLUSION
Coca Cola is one of the dominant engineering and manufacturing company in India. The employees say that the overall culture of the organization is good and a transparency is maintained in all the departments, which gives a better and healthy environment to work in. The company is in trend with the industry, when it comes to compensation. The internal parity in the organization for compensation is also good and employed seemed to be satisfied in this regards. They said that the recognition from the company is also above average. This recognition is given in terms of certificate, by the senior management and a proper function is organized for the same. Team building activities and outdoor tours has also been initiated recently, for the employees. But when it comes in terms of monetary rewards in regards of the recognition, the company is a bit conservative. The company provides a good career path to its employees as annual performance is given which is in accordance with the employees. The HR of the company says that due to booming industry, the attrition rate is high, but due to good compensation and work culture, the attrition has been controlled. The attrition is highest among the low level sales employees.

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BIBLIOGRAPHY
Books:

C.B.Memorial, Personnel Management Compensation and Rewards system, Uday Parikh, 2009, Crystal Publication Motivational Theories, David Shaun, 2009, Thomson Publication

Website:

www.cocacola.com www.google.com www.yahoosearch.com

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