Acknowledgement

The success and final outcome of this project required a lot of guidance and assistance from many
people and I am extremely privileged to have got this all along the completion of my project. All that
I have done is only due to such supervision and assistance and I would not forget to thank them.

I respect and thank our director sir Mr. KUMENDRA RAHEJA, for providing me an opportunity to
do the project work in RIIMS and giving us all support and guidance which made me complete the
project duly. I am extremely thankful to him for providing such a nice support and guidance, although
he had busy schedule managing the corporate affairs.

I owe my deep gratitude to our mentor Prof. SHRAVASTI JAIN , who took keen interest on our
project work and guided us all along, till the completion of our project work by providing all the
necessary information for developing a good system.

ANUDEEP GUPTA
Compensation is a systematic approach to providing monetary value to employees in exchange
for work performed. Compensation may achieve satisfaction.

EVOLUTION OF COMPENSATION

Today’s compensation systems have come from a long way. With the changing
organizational structures workers’ need and compensation systems have also been
changing. From the bureaucratic organizations to the participative organizations,
employees have started asking for their rights and appropriate compensations. The
higher education standards and higher skills required for the jobs have made the
organizations provide competitive compensations to their employees.

Compensation strategy is derived from the business strategy. The business goals and
objectives are aligned with the HR strategies. Then the compensation committee or the
concerned authority formulates the compensation strategy. It depends on both internal
and external factors as well as the life cycle of an organization.

TRADITIONAL COMPENSATION SYSTEM

In the traditional organizational structures, employees were expected to work hard and obey
the bosses’ orders. In return they were provided with job security, salary increments and
promotions annually. The salary was determined on the basis of the job work and the years of
experience the employee is holding. Some of the organizations provided for retirement
benefits such as, pension plans, for the employees. It was assumed that humans work for
money, there was no space for other psychological and social needs of workers.

CHANGE IN COMPENSATION SYSTEM

With the behavioral science theories and evolution of labour and trade unions, employees
started asking for their rights. Maslow brought in the need hierarchy for the rights of the
employees. He stated that employees do not work only for money but there are other needs
too which they want to satisfy from there job, i.e. social needs, psychological needs, safety
needs, self-actualization, etc. Now the employees were being treated as human resource.

Their performance was being measured and appraised based on the organizational and
individual performance. Competition among employees existed. Employees were expected to
work hard to have the job security. The compensation system was designed on the basis of
job work and related proficiency of the employee.
 Maslow’s Need Hierarchy

TODAY’S MODERN COMPENSATION SYSTEMS

Today the compensation systems are designed aligned to the business goals and strategies. The
employees are expected to work and take their own decisions. Authority is being delegated.
Employees feel secured and valued in the organization. Organizations offer monetary and non-
monetary benefits to attract and retain the best talents in the competitive environment. Some
of the benefits are special allowances like mobile, company’s vehicle; House rent allowances;
statutory leaves, etc.

IMPORTANCE OF COMPENSATION SYSTEM

Compensation and Reward system plays vital role in a business organization. Since,
among four Ms, i.e. Men, Material, Machine and Money, Men has been most
important factor, it is impossible to imagine a business process without Men. Every
factor contributes to the process of production/business. It expects return from the
business process such as rent is the return expected by the landlord, capitalist
expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour
expects wages from the process.

Labour plays vital role in bringing about the process of production/business in motion. The other factors
being human, has expectations, emotions, ambitions and egos.Labour therefore expects to have fair share
in the business/production process. Therefore a fair compensation system is a must for every business
organization. The fair compensation system will help in the following:
o An ideal compensation system will have positive impact on the efficiency and results produced by
employees. It will encourage the employees to perform better and achieve the standards fixed.

o It will enhance the process of job evaluation. It will also help in setting up an ideal job evaluation
and the set standards would be more realistic and achievable.

o Such a system should be well defined and uniform. It will be apply to all the levels of the
organization as a general system.

o The system should be simple and flexible so that every employee would be able to compute his
own compensation receivable.

o It should be easy to implement, should not result in exploitation of workers.

o It will raise the morale, efficiency and cooperation among the workers. It, being just and fair would
provide satisfaction to the workers.

o Such system would help management in complying with the various labor acts.

o Such system should also solve disputes between the employee union and management.

o The system should follow the management principle of equal pay.

o It should motivate and encouragement those who perform better and should provide opportunities
for those who wish to excel.

o Sound Compensation/Reward System brings peace in the relationship of employer and employees.
 o It aims at creating a healthy competition among them and encourages employees to work hard and
efficiently.

o The system provides growth and advancement opportunities to the deserving employees.

o The perfect compensation system provides platform for happy and satisfied workforce. This
minimizes the labour turnover. The organization enjoys the stability.

o The organization is able to retain the best talent by providing them adequate compensation thereby
stopping them from switching over to another job.

o The business organization can think of expansion and growth if it has the support of skillful,
talented and happy workforce.

o The sound compensation system is hallmark of organization’s success and prosperity. The success
and stability of organization is measured with pay-package it provides to its employees.

COMPONENTS OF COMPENSATION SYSTEMS

Compensation will be perceived by employees as fair if based on systematic components. Various

compensation systems have developed to determine the value of positions. These systems utilize many
similar components including job descriptions, salary ranges/structures, and written procedures.

The components of a compensation system include

 Job Descriptions A critical component of both compensation and selection systems, job
descriptions define in writing the responsibilities, requirements, functions, duties, location,
environment, conditions, and other aspects of jobs. Descriptions may be developed for jobs
individually or for entire job families.
  Job Analysis The process of analyzing jobs from which job descriptions are developed. Job
analysis techniques include the use of interviews, questionnaires, and observation.

 Job Evaluation A system for comparing jobs for the purpose of determining appropriate
compensation levels for individual jobs or job elements. There are four main
techniques: Ranking, Classification, Factor Comparison, and Point Method.

 Pay Structures Useful for standardizing compensation practices. Most pay structures include
several grades with each grade containing a minimum salary/wage and either step increments or
grade range. Step increments are common with union positions where the pay for each job is pre-
determined through collective bargaining.

 Salary Surveys Collections of salary and market data. May include average salaries, inflation
indicators, cost of living indicators, salary budget averages. Companies may purchase results of
surveys conducted by survey vendors or may conduct their own salary surveys. When purchasing
the results of salary surveys conducted by other vendors, note that surveys may be conducted
within a specific industry or across industries as well as within one geographical region or across
different geographical regions. Know which industry or geographic location the salary results
pertain to before comparing the results to your company.

 Policies and Regulations

Compensation will be perceived as fair if it is comprised of a system of componentsdeveloped to

maintain internal and external equity

TYPES OF COMPENSATION SYSTEM

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.

House Rent Allowance

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. 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 Allowance

Organizations provide for cab facilities to their employees. Few organizations also provide vehicles and
petrol allowances to their employees to motivate them.

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 bills.

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 month’s 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 MODERN 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.

Insurance

Organizations also provide for accidental insurance and life insurance for employees.
This gives them the emotional security and they feel themselves valued in the organization.

Leave travel

The employees are provided with leaves and travel allowances to go for holiday with their
families. Some organizations arrange for a tour for the employees of the organization. This
is usually done to make the employees stress free.

Retirement benefits

Organizations provide for pension plans and other benefits for their employees which
benefits them after they retire from the organization at the prescribed age.

Holiday Homes

Organizations provide for holiday homes and guest house for their employees at different
locations. These holiday homes are usually located in hill station and other most wanted
holiday spots. The organizations make sure that the employees do not face any kind of
difficulties during their stay in the guest house.

Flexible timings

Organizations provide for flexible timings to the employees who cannot come to work
PACKAGES
during normal AND
shifts due to their PRACTICES
personal problemsIN
andINDIAN COMPANIES
valid reasons.

Information Technology Sector

Indian IT industry is witnessing a high growth rate. The sector is recruiting

more and more technical and professional people. The growth rate of
recruitment in the sector has been observed as 14.5%. With the immense
recruitments and high attrition rate, organizations focus on higher competitive
packages. The average increase in the salary during 2006 was reported as 16%.

The compensation package for an employee is based on various factors such as

his/her educational level, relevant experience in the industry, job’s position in
the hierarchy, skills and attributes and job related technicality. The average
salary offered as per the experience level of the candidate is as follows:
Figure: Average salary offered in IT Sector Based on Experience

Dataquest-IDC has recently reported following as the top 20 highest salary payers in
Indian IT sector.

o HCL Infosystems Limited

o Hexaware Technologies

o RMSI Private Limited

o Cadence Design Systems

o Tata Consultancy Services

o Aztecsoft Limited

o Nucleus Software

o Induslogic

o Kanbay International Inc

o Cybage Software Private Limited

o Accel Frontline Technologies

o Geomatric Software Solutions Co. Ltd.

o Sierra

o Flextronics
 o Computer Sciences Corporation

o Interra Systems

o Sasken Communication Technologies Limited

o NIIT Technologies

o Wipro Limited

o Infosys Technologies Limited

Entry Level Compensation Packages

Indian IT industry provides a lucrative compensation package provided

for entry level jobs. Top players like TCS, Wipro, Infosys, Sasken, IBM,
Accenture and other multinationals and locally owned organizations are
providing most competitive packages to attract and retain talented human
resource.
 Indian IT sector offers various job openings to fresh engineers or diploma
holders. The candidate aspiring to join an IT organization should posses certain
technical and non-technical skills and attributes.

Attainment of qualified degree or diploma certificate from a reputed institute/university

would be an added advantage. The desired skills are:

 Effective Communication Skills

 Sound Technical Knowledge

 Strong Commitment Level

 Strong Analytical Skills

 Ability to meet deadlines

Besides the pay packages, employees are also given certain monetary and non-monetary
benefits such as allowances, accommodations, respective positions, perks, incentives,
insurances, etc. These benefits differ from organization to organization.
 Figure: Average Salary offered by Top Players in Indian IT Sector for Entry Level Jobs

Management Level Compensation Packages

IT industry offers lucrative growth prospective to its employees. Top players of

the industry such as TCS, Wipro, Sasken, IBM, Infosys, Accenture, Oracle, HCL,
Satyam, Sify and other organizations are providing heavy perks and handsome
pay packages to retain their talented workforce. Apart from basic salary and
special allowances, employees are given some other monetary and non-monetary
benefits like club memberships, annual bonus, and other special allowances.

Effective communication skills, good analytical skills and sound technical

knowledge are must to have a respectable position in IT sector.

People working in IT sector should be willing to work at stretch, they should be able to
work in pressure and meet deadlines. Also, the level of experience determines one’s level
of compensation package and position in the industry.

Figure: Average Salary offered in Indian IT Sector for Managerial Level Positions

Insurance Sector

Privatization has brought in lot of surprises for insurance sector. In India,

insurance sector is at the booming stage as only 40% of the population is
insured. Private organizations are striving hard and hard to develop the sector.
Organizations are coming up with newer insurance plans to attract the market
such as accidental insurance, medical insurance, medi-claims, family-health
insurance, dental insurance, diabetes insurance, auto insurance, etc.
Government is also supporting the insurance sector to increase the Gross
Domestic Product ratio from the sector which is now about 1.4% only.

From the government jobs to private organizations openings, work environment, job
profiles, pay packages and career growth options have been changed. From basic salary
with small incentives, compensation systems have been grown to increased salaries,
incentives, perks, allowances, accommodations, etc. The average salary increase for the
year 2006 was 17.1%.

Figure: Average Salary offered in Indian Insurance Sector based on Experience

Following are the top players of the insurance sector offering most competitive
packages to their employees:

 Life Insurance Corporation

 New York Life

 Prudential

 Met Life
  Birla Insurance

 Kotak Mahindra

 ICICI

 HDFC

Entry Level Compensation Packages

Insurance sector is at the growth stage recruiting more and more people in the
industry. Organizations are providing most competitive packages to attract and
retain the talent. Most of the jobs in the insurance sector are part time, providing
the opportunity for the employees to earn extra apart from their regular income.
The compensation is also performance based, depending upon the insurance
amount and premiums.

Candidate who wishes to join the insurance sector has to complete a graduation
degree. A PG diploma in insurance can get him/her position of agent or insurance
advisor in some reputed organization.

Since most of the jobs offered in the sector are in the marketing segment, candidates with
marketing skills would have better career prospects. Following are the key skill
requirements for the job profile in the sector:

 Excellent communication skills

 Excellent marketing skills

 Good interpersonal skills

 Good public relations

 Target-oriented approach

 Analytical skills

Top players in the sector offers the following compensation packages at entry level:
 Figure: Average salary (in lakhs) offered to entry level employees

Management Level Compensation Packages

Indian insurance sector is growing at a fast pace and offering lucrative career
options. Both private and public organizations offer part time and full time
employment in the sector. Life Insurance Corporation of India, Birla Insurance,
Max New York Insurance, ICICI Prudential, and Met Life Insurance are some of
the leading organizations in the sector. Educational institutes are also coming up
with certificate courses in insurance management. The course offers managerial
positions and excellent growth perspective in the sector.

Excellent marketing skills and communications skills with appropriate experience level
would help any individual to score well in the industry. Compensation package in the
industry includes heavy perks and incentives part from basic salary structure and other
special allowances. Most of the jobs in the sector are categorized in the retail and
 marketing segment.

Figure: Average Salary offered in Indian Insurance Sector for Managerial Level Positions

IT Enabled Services

With IT industry at the boom, Indian IT-enabled services are also enjoying the
returns. Recruitments are taking place at a high rate. It has also given rise to the
outsourcing industry. IT-enabled services cover a rage of service sectors like
BPO, KPO, Hardware and Software. The compensation packages in the sector
vary from job-job and company to company. Experience level also forms an
integral part of the compensation package.
 Compensation Packages in BPO & KPO
BPO and KPO units have entered the Indian markets with lucrative compensation
packages and high incentives.

Most of the organizations in the segment are foreign-owned. Few of the Indian
organizations have also come with the BPO and KPO units. The organizations are attracting
young talent by offering lucrative compensation packages.

Figure: Average salary offered in BPO and KPO

Compensation Packages in Software & Hardware Services

Software & Hardware services have created lots of jobs in the sector. Fresh and experienced
engineers are offered jobs with high packages. Top players like Microsoft, Oracle, IBM,
HCL, Infosys, Satyam, Sify, Wipro, LG, and Samsung are offering lucrative packages to
attract and retain talented workforce
 Figure: Average salary offered in BPO and KPO

EEntry Level Compensation Packages

BPO & KPO have come up with lots and lots of jobs for fresh graduates
with handsome salary packages and incentives. They are attracting young
talent. Outsourcing industry has come up with new job prospects for
graduates. But it demands hard work and skilled labour. The desired skills
for BPO & KPO services are:

Effective Communication Skills

Strong Commitment Level

Strong Analytical Skills

Ability to meet deadlinesDespite the fact that KPO & BPO do not offer job securities, the
recruitment rate in the segment is very high. Most of the job profiles are target based. High
recruitment rate is due to high average salary being offered to fresh graduates also.
Figure: Average Salary offered by Top Players in Indian IT-Enabled
Services for Entry Level Jobs

Management Level Compensation Packages

Employees need to work hard and achieve their targets in order to be in the lime
light. High attrition rate has caused organizations offer high compensation
package. Compensation plays an important part here. When the employees are
provided with good packages they produce well and maintain their stability but if
not they cause high attrition rate.

KPO, BPO, software and hardware services offers handsome salary packages and
high incentives to managerial level positions.

The project managers and other top management employees enjoy monetary and non-
monetary benefits from the organization. The organizations offer lucrative benefits to retain
the talent in the competitive environment. With The software and hardware industry is in
need of talented programmers, testers, developers and analysts to improve their
productivity. Educational institutes are updating their syllabi every year to deliver updated
and skilled human resource. The organizations are also providing for educational
programmes for their employees or their development to reduce the recruitment cost.

Figure: Average salary offered in BPO and KPO

Telecommunication Sector

Indian telecommunication sector is witnessing a growth rate of more than 25%.

With the upcoming of new upgraded technologies such as 3G, the sector will be
experiencing a growth rate of more than 100%. Public players and private players
are competing with each other and are developing themselves to produce more
quality and deliver advanced technologies. Top players in the segment such as
Bharti Airtel, Reliance Communications, Tata Teleservices, Idea Cellular,
Hutchison, Essar, Nokia, Siemens, LG, Motorola, etc are investing in new
projects to accommodate the 3G technology.
 With the business expansion and globalization of Indian organizations more and more
recruitments are taking place in the sector. The sector has also provided jobs in
marketing, installation and construction segments. Immense competition has led the
organizations hire more and more skilled labour, be it for upgrading their technologies
or marketing their products. Organizations are offering most competitive packages to
attract and retain talented human resource.

Figure: Average salary offered in Telecommunication Sector Based on Experience

Entry Level Compensation Packages

The sector is offering openings in banking, insurance, capital market, venture

capital, mutual funds, bonds, commodities markets, etc. Compensation
provided to fresh management graduates is also very lucrative. The sector is
open for CA, CS, accountants, MBA in finance and commerce graduates.
 Effective Communication Skills

Sound Technical Knowledge

Strong Commitment Level

Strong Analytical Skills

Apart from pay packages marketing people also get high incentives and perks. The
industry provides for special allowances such as annual bonus, house rent allowances,
mobile allowances, transportations, travel leaves, paid vacations, etc.

Figure: Average Salary offered in Indian Telecommunication Sector for Entry Level Jobs

Management Level Compensation Packages

Telecommunication provides for excellent growth opportunities. In the global

competitive environment experienced people have an upper hand in selecting an
organization. Organizations need to offer most competitive packages and heavy
perks to attract and retain the talented work force.
 Effective communication skills, good analytical skills and sound technical
knowledge are must to have a respectable position in telecommunication sector.
Organizations such as Idea Cellular,

Tata Teleservices, Reliance Communications, Bharti Airtel, Nokia, Siemens, ericcson,

Motorola, etc are advancing their technologies and providing most competitive
compensation packages. People working in telecommunication sector are asked to work at
stretch and in pressure. Also, the level of experience determines one’s level of
compensation package and position in the industry.

Figure: Average Salary offered in Indian Telecommunication Sector

for Managerial Level Positions

Banking & Finance Sector

 Indian banking and finance sector is currently experiencing high growth rate.
With increased FDI and high inflation rates, finance sector is enjoying high
deposits. Financial institutes and commercial banks are expanding their
business and going for large scale recruitments. The banks are collaborating
with insurance units to provide insurance coverage to their clients. Few of
the banks are also dealing in gold and silver.

Nationalized banks are preferred more as they provide for job security.

Compensation packages in banks have always been lucrative. Incentives, special

allowances, travel leaves, concessions, paid vacations, paid leaves, retirement benefits
are also offered along with basic salary and other allowances such as house rent
allowance,transportation vehicle etc. Compensation package in finance and banking
sector depends on the level of knowledge and experience an individual have.

Top players such as nationalized banks- Bank of India, SBI, Indian Overseas Bank,
Bank of Baroda, Punjab National Bank, HDFC, ICICI and other private banks, financial
institutes such as Bajaj Capital, Kotak Mahindra, etc, are offering high salary packages
with lucrative incentives to attract and retain their talented work force.
 Figure: Average salary offered in Banking & Finance Sector Based on Experience

Entry Level Compensations

Indian finance & banking sector offers jobs in various segments. The managerial
level jobs are held by management professionals, commerce graduates and
finance professionals. However at the entry level there are more jobs for
graduates in marketing segment. The positions are for customer care executives,
marketing executives in credit card department, loan department, verification
department, recovery department.

In other departments like audit, credit, advances, foreign exchange, etc individuals are
professionals such as CA, CS, MBA-finance, commerce graduates, B.com, M.Com etc.
Software packages such as tally certification guarantees jobs in the finance sector. Getting
into nationalized banks is quite difficult, but if the candidate has desired skills and
willingness, he/she has to pass an entrance exam followed by personal interview and
medical inspection. These exams are conducted by the respected banks only.

Packages offered to individuals are based on their knowledge level and training
experience. The profile of the candidate also matters. However the candidates looking for
a career in finance should possess the necessary skills. They are:

 Effective Communication Skills

 Commerce Background

 Excellent Marketing Skills

 Strong Analytical Skills

 Ability to meet deadlines

Apart from pay packages finance professionals also get high incentives and perks.
The industry provides for special allowances such as annual bonus, house rent
allowances, mobile allowances, transportations, travel leaves, paid vacations, etc.

Figure: Average Salary offered in Indian Banking & Finance Sector for Entry Level
Jobs

* The salary figures provided are for the business development executives and
marketing & sales executives
Management Level Compensation

Finance sector is a promising sector where compensation is considered. The

sector has witnessed 17% average increase in the salary packages in the year
2006. The compensation packages offered to managerial level employees are
very much lucrative. Besides the basic salary employees are also provided with
heavy perks and incentives with special allowances. They are offered club
memberships, company’s vehicle, travel leaves, paid vacations, other allowances
and non-monetary benefits.

Organizations also conduct training and development programs for their employees’
professional growth. Organizations provide for certification courses and online degree
courses for the employees. At higher level employees are given employee stock options.
Individuals are given equal preferences on the basis of their performance.

Figure: Components of Compensation Packages at Managerial Level in Banking & Finance

Sector
Nationalized banks offer job security and private financial institutes provide high lucrative
packages. With the globalization, liberalization, business expansion, more number of
competitors, jobs in the financial sector are also demanding too much hard work. Earlier
bank jobs were considered very comfortable ones but now the scenario has been changed.
Indian banking sector is heading for 24*7. Some of the nationalized and private banks have
started working 8 to 8. .

Figure: Components of Compensation Packages at Managerial Level in Banking & Finance

Sector

Hospitality Sector
 In next 10 years Indian hospitality sector is expected to grow at the rate of
8%. The emergence of Government voluntary schemes such as Incredible
India has caused more and more tourists pouring in Indian holiday
destinations. This has caused more and more development of the hospitality
sector. The sector can be categorized into two sub industries- hotel industry
and travel & tourism industry .

The sector offers jobs in various segments customer care executives,

marketing, servicing,

house keeping, kitchen management, faculties, cabin crew, finance, help desk,
management, etc. Hospitality sector offers lucrative compensation packages. The
compensation package in the sector includes heavy incentives, meals, accommodation,
and travel allowances along with basic salary. Usually basic salary is less but the
incentives and perks known as tips provides for handsome earnings.

The compensation packages in the industry are based on the brand and position an
individual is working for. There’s a huge gap between the compensation provides by a
5 star hotel and an ordinary 1 star hotel. The package and position is also depicted on
the basis of the educational background of the candidate. A person with hotel
management degree will earn more than an individual with no certifications in hotel
management.
Figure: Distribution of Compensation Packages in Hotel Industry*

* The figures are determined after analyzing the compensations offered in various
segments within the hotel industry. For example, Front Desk Executives get very less
compensation packages (including perks and incentives).
 Figure: Distribution of Compensation Packages in Tourism Industry*

* The figures are based on the proportion of compensation packages offered in the sub
segments of tourism industry.

Entry Level Compensation Packages

Hospitality Sector offers lucrative packages to fresh graduates. An individual

needs to complete a full time or part time degree or certification course to
enter the promising industry. The compensation packages offered vary from
job to job, segment to segment and brand to brand. For example, a pilot in
some private airlines gets a very high package than a driver in a roadways
organization. But the industry offers heavy returns to the owners of the
business enterprises.

Hotel Industry
An individual who wish to join the hotel industry needs to have a certification
course or diploma/degree in hotel management.

Of course there are many low grade restaurants and other family restaurants and hotels
where these certifications are not required but there the compensation packages are very
less. The brand names such as ITC hotels, Hyatt Regency, Oberoi Hotel and Leela
Hotels offer high lucrative packages with heavy perks and incentives. But these
organizations look for diploma/degree holders. An individual must possess the
following skills to fulfill his/her salary expectations:

 Effective Communication Skills

  Specialized Skills

 Strong Commitment Level

 Willingness to Work at Stretch

 Team-oriented

 Willingness to Work in Shifts

Tourism Industry ,,jhjmhfnfgfhfhfkkkjjljljljljl

Tourism industry also offers very promising compensation packages. There are various
job openings in the sector. One can start his/her career in any of the sub segments. There
are growth opportunities in railways, airlines, roadways and crews. There are both
public and private organizations dominating the sectors. Crews and Airlines offer most
lucrative packages to fresh graduates. They look for degree/diploma holders. Top
players such as Air India, Indian Airlines, Deccan Airways, Indian Railways, DTC,
BEST, Shipping Corporation of India Ltd are offering most competitive packages to
their employees. One needs to have some skills and attributes to start his/her career in
the industry. The desired skills are:

 Effective Communication Skills

 Specialized Skills
  Strong Commitment Level

 Willingness to Work at Stretch

 Team-oriented

 Willingness to Travel

 Willingness to Work in Shifts

Management Level Compensation Packages

Hospitality industry offers high packages. Although the basic salary in the sector
is less as compared to other sectors but the incentives and perks offered are very
high that makes the total amount a huge one. With relevant experience, diploma
certification/degree provides for an added advantage for the individuals working
in the hospitality industry.

Top management enjoys very high compensation packages in the hotel industry.
The packages include basic salary, incentives and bonus. Due to immense
competition packages are increasing at a high rate to attract and retain the
talented workforce.

Big names such as Hyatt Regency, Leela Hotels, ITC Hotels, Oberoi Hotels are offering
lucrative packages. In the tourism industry airlines such as Air India, Kingfisher, Jet
Airways and Indian Airlines are offering higher packages to attract and retain best human
resource.

Figure: Average Salary Offered to Top Management in Hotel Industry

Hospitality sector provides for varied compensation packages. For example, hotels located
in center city and resort areas provide higher salary to their managers as compared to hotels
located along highways or in the suburbs. In a study it was found that managers of a hotel
located in center city earns an average of 125% more than the manager working at a
highway hotel. Industry is expected to grow at the rate of 8% that predicts that
compensation packages for the employees will also increase with the same pace.
Healthcare & Medical Sector

Salary package is the core aspect for attracting and retaining employees. The
immense growth in the sector has caused the compensation packages in the industry
increase at a rapid pace. The compensation packages in the industry are reaching
the same roof as of IT sector in the country. The industry is booming and this has
led the medical institutes to offer lucrative packages to attract and retain skilled
medical practitioners.

In recent study it was revealed that medical tourism is increasing in India.

It is expected that the Indian healthcare industry will grow by more than 40% in the next
5 years. This has caused more and more companies are entering the sector which is
demanding more and more professionals. Hence, the organizations offer most
competitive packages to acquire the best talent around. It has been found that that there
are many MNCs in the Indian healthcare industry who want to put the management on
a global scale.

Compensation Structure

The compensation package includes the following components. Apart from the regular
components, medical practitioners are also provided with the special benefits mentioned
below.

Figure: Components of compensation package in Indian Healthcare & Medicine

Industry
 Figure: Special Benefits offered in Indian Healthcare & Medicine Industry

The traditional aspect of equal pay in equal regions has been taken over by the new
phenomena of competitive pay across the industries. Globalization and business
expansions have caused the organizations to attract and retain the talented workforce.
They also keep in the mind the internal parity i.e. the pay structures are comparable with
respect to the job positions in the organizational hierarchy.
Entry Level Compensation Packages

Indian healthcare industry can be categorized in public and private sectors. The
public enterprises offer job security and the private institutes provides for lucrative
packages. The industry is creating opportunities in new areas to facilitate more
health care services such as health and fitness, wellness, rehabilitation, home
healthcare, nutrition.

It is a challenge to the healthcare industry to restructure its compensation packages

to attract the young talent.

Young talent opts for performance based pay and incentives whereas old generation is
still demanding the heavy benefits. Organizations need to formulate a balanced strategy
to improve the organizational productivity and provide the most competitive pay-
packages. Given below are the various openings the industry has for fresh medical
professionals:
An individual should have a qualified degree from a reputed university to enter the
healthcare sector. He/she should possess the desired skills to gain the most competitive
packages:

 Effective Communication Skills

 Sound Technical Knowledge

 Strong Commitment Level

 Strong Analytical Skills

 Willingness to Work at Stretch

Besides the pay packages, employees are also given certain monetary and non-monetary
benefits such as allowances, accommodations, respective positions, perks, incentives,
insurances, etc. These benefits differ from organization to organization.
Management Level Compensation Packages

Organizations understand that only compensation package will not help them retain
their talented workforce but they need to provide excellent working atmosphere,
growth opportunity, and space for experimentation. The individual satisfaction
level must also be maintained. They should take measures to motivate employees.
Like other industries in healthcare industry too, the non-technical staff such as
marketing team are receiving lucrative packages.

Top Management Compensation Structure

The organizations are offering lucrative compensation packages to their senior
management. They try to balance the packages provided to the technical professionals
and non-technical professionals by offering annual bonuses and variable pay plans.

Companies are becoming competitive when it comes to luring top executives with a mix
of high basic salary, incentives, Employee Stock Ownership Plan and deferred pay.
They are also looking at performance-based salaries, with variable pay as a percentage
of salaries on the rise.

Figure: Compensation Package Offered to Senior Management

in Indian Healthcare Industry
Significant increase has been in salary packages in the industry. The average increase in
salary in the sector has been reported as 12% in the year 2006. Organizations have
offered car and accommodation benefits to their senior and middle management
employees. Given below is the average increase in the salary in the industry at various
segments:

Figure: Average salary increase in the Indian Healthcare Sector

The compensation in the industry also depends on the specialized area. Compensation
is decided with respect to the individual’s contribution to the organization.