Amity Business School

TOPIC

COMPENSATION MANAGEMENT SYSTEM AT IOCL AND ITS RELATION TO EMPLOYEE SATISFACTION.

MEGHA CHAUHAN SECTION -A (MBA-HR) ENROLL NO-A0102310024

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INTRODUCTION
Compensation is the remuneration received by an employee in return for his/her contribution to the organization. DIRECT COMPENSATION-Monetary benefits egs: Salary, HRA, Conveyance etc INDIRECT COMPENSATION-Non monetary benefits egs: leave policy, holiday homes, insurance ,leave travel etc. Objectives: This Study will help us to understand the compensation system in IOCL covering the various allowances ,schemes and numerous facilities provided by the organization to its employees. This study will help organization to understand the employees perception regarding the compensation system at IOCL so as to ascertain the positive and negative aspects.

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LITERATURE REVIEW
Can compensation be strategic? A review of compensation Management practice in leading multinational firms. A Comparison of Intrinsic and Extrinsic Compensation Instruments in the Banking Sector of Pakistan. Competency Based Compensation System- As a strategic HR Technique. Performance, Compensation, And The Balanced Scorecard. Review of Compensation Schemes and Enterprise Compensation Management Systems. Challenges in International Benefits and Compensation Systems of Multinational Corporation.

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COMPANY PROFILE
Indian Oil, the largest commercial enterprise of India (by sales turnover), is the only Indian company to find a place in Fortunes "Global 500" of the world's largest industries (Rank 112 in 2010). Among Petroleum Refining companies, it has a global ranking of 16 by sales and profits. Indian Oil Corporation Ltd. is India's largest company by sales with a turnover of Rs. 3,14,710 crore and profit of Rs. 8085 crore for the year 2010-11. Mr. R.S.Butola is Chairman of Indian Oil Corporation Ltd., Indias flagship oil & gas major. Before joining Indian Oil, Mr. Butola was the MD of ONGC Videsh Ltd. (OVL). The Indian Oil logo essentially has the following elements: A saffron coloured circle/globe Enclosed by a dark blue coloured outer ring and a dark blue coloured band across on which is written the name IndianOil in Devanagri script The saffron circle represents energy as a derivative of the Sun, connoting life and the future. The dark blue outer ring and the horizontal band symbolize technology for harnessing this energy.

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COMPANY PROFILE
IOCLs major downstream operations can be classified as follows: Refinery Pipeline Marketing Research & Development Products Vision Values Objectives

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METHOD,RESEARCH DESIGN AND SAMPLE

Research design: A descriptive research was conducted to achieve the above mentioned objective. A descriptive study tries to discover answers to the questions who, what, when, where, and, sometimes, how. Primary data collection: A structured questionnaire with definite ,concrete and highly specified questions was prepared to collect the opinions of the employees with regard to compensation system. Secondary data collection: The secondary data was collected from Personnel Manual, reports and surveys conducted at IOCL. Sample size of 20 covering various grades of officers Method: Questionnaire were collected form employees and according to their response pie charts in ms-excel were made so as to ascertain their positive and negative perception they are getting in IOCL.

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INSTRUMENTS USED
Questionnaire is designed to capture the perception of the employees. questionnaire was designed for evaluating different drivers. Ms-Excel for constructing pie charts.

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RESULTS AND FINDINGS

It was seen from the following study conducted that employees are satisfied majorly regarding the compensation they are getting in the organization particularly like they are satisfied by the pay and allowances, job security, pay package ,fringe benefits and they also considered the fact that the compensation they get is in accordance with the knowledge ,skills, qualification they have. Certain employees were not satisfied with the after retirement benefits , annual (3%) policy, out post requirements and children education allowance so IOCL should work towards these area so as to keep their employees fully satisfied. The conclusion of moral studies that ,compensation system is a systematic approach for providing monetary, value to employees in exchange for work performed. Compensation may achieve several purposes assisting in recruitment job performance, and job satisfaction .

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DISCUSSION
It was concluded from the study that employees were satisfied in certain areas like pay and allowances, job security, pay package ,fringe benefits . And not satisfied in the following areas like retirement benefits ,annual (3%) policy, out post requirements and children education allowance regarding the compensation they are getting. Therefore a sound compensation /reward system has become a hallmark of organizations success and prosperity . The success and stability of organization is measured with pay-package it provides to its employees. Today IOCL is providing allowances for almost everything and this motivates them towards superior performance and also boost up their determination level in achieving the goal of the company.

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LIMITATIONS
Time constraint Cooperation was not easily available. Insufficient: knowledge. Time and geographical constraint. Reliability of replies. Inappropriate method of analysis. Despite these limitations, the data collection through questionnaire fulfills the purpose of the study

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IMPLICATIONS
Team based incentives should be provided to employees working on projects. Annual increment policy of IOCL should be such that it satisfies employees. They should also be provided with perks ,benefits and incentives provided in private sector so that attrition rate is very low. Employees should be motivated to work more by rewarding them for their performance so that organizational productivity is high. Schemes such as children education scheme and professional membership scheme should be provided to employees There must be a customized training programme for employees from non banking background Regular feedback must be taken from the employees . Training must be done as soon as possible. The work culture which IOCL provides must be retained as it is really amazing. Bring transparency in promotion policy and bring a rational policy and employee should be transferred after every four-five years.

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IMPLICATIONS
IOCL has a scale payment which brings inefficiency. The timing should be flexible and the compensation should be correlated to performance. Increment on promotion can be increased which is very low according to the respondents. Promotion must be based on individual as well as team performance. Improvements can be brought in the pay scale of officers. All the officers and employees can be made aware of the all benefits available to them. Individual performance should be given more weightage both in terms of monetary and non monetary remuneration. Employees participation in deciding and implementing the compensation system need to be ensured so as to avoid any conflict between them and the management cadre. Retirement benefits should be more provided to employees by IOCL.