Solved question paper for CM May-2019 (BBA 6th)

Question paper 1

1. SECTION-A

   1. Explain the significance of compensation management.

   Answer:

   Compensation management is the process of ensuring that and organisations sailors and bouncers remain competitive appropriate and equitable. It also involves managing company benefit program to make sure they meet the needs of the current workforce. Compensation managers are responsible for working with employment data and keeping up with Complex benefit administration rule and regulation.

2. 2. What is Job-Evaluation ?

   Answer:

   Job evaluation is is systematically way of determining the value worth of the job in relation of other jobs in an organisation. It tries to make a systematically compensation between job to assess their relative worth for the purpose of establishing a relation worth for the purpose of establishing a relation pay structure. Job evaluation need to be differentiated from job analysis. Job analysis is a systematic way of gathering information about a job. Even job evaluation method require at least some basic job analysis in order to provide information about the concerned.

3. 3. Explain individual incentive plans.

   Answer:

   Individual incentive plans are based on meeting work related performance standard such as quality productivity customer satisfaction safety or attendance. Their most appropriate when

   • Performance can be measured objectively

   • Employees have control over the outcomes

   • Plans does not create unhealthy competition. Individual plants require monitoring and it important to remember that the incentive scheme is not a substitute for good management. The employers are are liable to pay incentive to those employees who are production more than standard output full stop this plan can be either time based or product based.

4. 4. Explain the benefits of ESOPs to a business concern.

   Answer:

   ESOPs have a number of significant benefited the most important of which are are

   1. Contribution of stock are tax deductible :- That means companies can get a current cash flow advantage by ensuring new share or or shares to a soap a belt there means existing will be diluted.

   2. Cash Contribution are deductible :- A company contribute cash or discretionary basis 2 year and take a tax for it whether the contribution is used to buy shares from current owners or to built up a cash revenues in the esop for future use.

   3. Contribution used to repay a lone the ESOP takes out to buy company shares are tax deductible :- The ESOP can you borrow money to buy existing share new share or treasury share.

   4. Dividends are tax deductible:- Reasonable dividends used to repay an SOP loan pass through to employers by employees to company stock are tax deductible.

   5. In S corporation, the percentage of ownership held by esop is not subjected to income at the federal level.

6. 5. Discuss Gratuity as a component of retirement benefits.

   Answer:

   Gratuity is a monetary benefit given by the employers to his employees at the time of retirement. It is a defined benefit plan where we contribution are are made by the employees. Prior to 1972 there was no law where it was met entry for the employed to pay employees gratuity at the time of retirement. Gratuity e is a of money paid by an employer to an employee for service in the company. However gratuity is paid only two employees who complete five or more year with the company it can be understood as a form of tip paid by employer to the Employees for service offered in the company.

7. 6. Write short note on variable pay.

   Answer:

   Variable pay is also known aCompensation management is the process of ensuring that and organisations sailors and bouncers remain competitive appropriate and equitable. It also involves managing company benefit program to make sure they meet the needs of the current workforce. Compensation managers are responsible for working with employment data and keeping up with Complex benefit administration rule and regulation.

8. SECTION-B

   1. What are the various factors that affect compensation levels in an organisation ?

   Answer:

   Factors affecting are:-

   1. External determinants of compensation

   1. Labour market conditions:- The force of demand and supply of human resources no doubt play a role in compensation decisions. Employees with their skill set a a gained through experience command higher wage and salary then the over with ordinary skill available in the job market.

   2. Economic condition:- Organisation having state of a art technology in place excellent productivity records higher operational efficiency a pool of skill manpower etc. Can be better pay master.

   3. Prevailing wage level:- Most of the organisation fix their pay in keeping with the level of a similar job in the industry. There frequently conduct wages level for different jobs.

   4. Government control:- Government through various legislative enactment such as maximum wages act 1948 payment of wages act 1936 equal reevneration act 1976 Payment of Bonus Act 1965 dealing with the product fund gratuity etc have a bearing for compensation decision.

   5. Cost of living:- Increase in the cost of living rising the cost of goods and service for stop it varies from area to area with in country and from country to country. The changes in compensation are based on customer price index.

   6. Muion’s Influence:- The collective bargaining strength of the trade union also influence the wage level full stop the Union injoy and upper hand in certain Industries like banking insurance transport and other public activities.

   7. Globalization:- It has ushered in array of higher compensation level in managed sector of the economy. There is is entry of multinational corporation and big corporates have triggered and message chance in the compensation structure of companies across the sector.

   2. Internal determinants of compensation

   1. Compensation policy of the Organization :- Firm’ s policy regarding pay for example attitude to be an industry trade in pay or desired pay the market rate determines its pay structure.

   2. Employer’s affordability:- Those organisation which earn high profit and have a large market share a large business and multinational companies can afford to pay higher pay than others.

   3. Worth of a job:- Organization BSA their pay level on the worth of a job full stop the wages and salaries tend to be higher for job involving of brain power responsibility e lend job creativity oriented job technical jobs.

   4. Employee’s Worth:- In some organisation rate are generated to all employees irrespective ok performance. In such cases employees are rewarded saw there more physical presence on the job rather than for their performance. Is generally e done in systematic way which are

   1. Does supervisor measure the pay of employees and compare it with the target and plan.

   2. The supervisors analyses the factor behind work performance of employees.

   3. The employer's are are in position to guide the employees for a better performance.

9. 2. Elaborate the process of Job-evaluation as employed in business enterprise.

   Answer:

   Job evaluation is is systematically way of determining the value worth of the job in relation of other jobs in an organisation. It tries to make a systematically compensation between job to assess their relative worth for the purpose of establishing a relation worth for the purpose of establishing a relation pay structure. Job evaluation need to be differentiated from job analysis. Job analysis is a systematic way of gathering information about a job. Even job evaluation method require at least some basic job analysis in order to provide information about the concerned.

   Individual incentive plans are based on meeting work related performance standard such as quality productivity customer satisfaction safety or attendance. Their most appropriate when

   • Performance can be measured objectively

   • Employees have control over the outcomes

   • Plans does not create unhealthy competition. Individual plants require monitoring and it important to remember that the incentive scheme is not a substitute for good management. The employers are are liable to pay incentive to those employees who are production more than standard output full stop this plan can be either time based or product based.

   ESOPs have a number of significant benefited the most important of which are are

   1. Contribution of stock are tax deductible :- That means companies can get a current cash flow advantage by ensuring new share or or shares to a soap a belt there means existing will be diluted.

   2. Cash Contribution are deductible :- A company contribute cash or discretionary basis 2 year and take a tax for it whether the contribution is used to buy shares from current owners or to built up a cash revenues in the esop for future use.

   3. Contribution used to repay a lone the ESOP takes out to buy company shares are tax deductible :- The ESOP can you borrow money to buy existing share new share or treasury share.

   Dividends are tax deductible:- Reasonable dividends used to repay an SOP loan pass through ts performance pay it is is used to recognise and reward employees contribution above and beyond their normal job requirements to word company productivity and profitability quality and the like. Variable pay is the intention of sale compensation determined by employee performance. Employees hate their goods variable pay is provided as the type of bonds in Santa Fe or Commission for stop base salary on the other hand is fixed at paid out regardless of employees meeting their goals.

11. 3. What is performance appraisal ? What are its objectives ?

    Answer:

    Objectives of performance appraisal

    Performance appraisal can be done with following objectives in mind

    1. To maintain record in order to determine compensation packages wage structure salaries Risers etc.

    2. To identify the strength and weaknesses of employees two place right man on right job.

    3. To maintain and assess the potential present in a person for further growth and development.

    4. To provide a feedback to employees regarding their performance and related status.

    5. It serves as a basis for influencing walking habit of the employees.

    6. To review and retain the promotion and other training programs.

    The main Objectives of performance appraisal is it to measure and improving performance of employees and increase future potential and value to the company. Other objective include

    1. Providing feedback:- Providing feedback is the most common justification for an organisation to have a performance appraisal system. Through its performance appraisal process the individual Learns exactly how will he or she did during the previous 12 month and can then use that information to improve his or her performance in the future.

    2. Facilitating promotion Decision :- Almost everyone in an organisation want to get a ahead. So make it easier for the organisation to make good decisions about making sure that the most important position are filled by the most capable individuals.

    3. Rightsizing or Downsizing Decision:- If promotion are what everybody wants layoff are what everybody we should to avoid. But when economic reality force an organisation to downsize performance appraisal help make sure that the most talented individuals are retained and to identify poor performers who affected the productivity of the organisation.

    4. Encouraging performance improvement:-A good performance appreciation point out of area where individuals need to improve their performance.

    5. Counselling poor performers:- Not everyone meds the organisation standard. Performance appraisal force manage to confirm that those whose performance is not a auditing the companies expectations.

12. 4. Define Job enrichment. What are its advantages and disadvantages ? How is it different from Job enlargement ?

    Answer:

    Job enrichment is a common motivational techniques used by organisation to give an greater satisfaction in his work. It means given an employee additional responsibilities previously reserved for his Manager or other higher rank position. In incense job given to employee most self-management in his duties.

    Advantage

    1. Learning new skills:- Providing job enrichment cause with a burden of additional duty and responsibilities. And to complete those duty and responsibilities of the post of worker. The employees need to be aware of all the additional skill.

    2. Boosts energy of the by reducing boredom:-Boosting energy is the answer to the question how does job enrichment motivate employees the.

    3. Creating a positive and better working environment:- Providing jobs in Richmond is one of the decision which the company where in which it need to be discussed that such type of enrichment can be beneficial for the growth of the company.

    4. Increase the chance of recognition and reward:- Once the company provide job enrichment for their employees then there is a possibility that those employee can recognised for their work or located or can also rewarded for their sincere work.

    5. Provides motivation for the advancement:- As per all key element of job enrichment provided by the company the employee will be awarded on extra load of Duty but that extra load of duty come with an extra baggage of motivation.

    Disadvantage

    1. Increases work load:- Source home employees of the company even agree that those companies which provide job enrichment to their employees but a lot of their employees working structure.

    2. Additional skills needed:-This is it quite clear that when the company provide job enrichment for their employees it makes things tough for the employees in term of learning new skills.

    3. Lack of knowledge:- Most of the time job enrichment can dangerous for the company in term of their growth. At that is because of the lack of knowledge of the employees.

    4. Incapability:- Working under intense pressure is surely an effective and important trait. But after explaining All the above statement it is a very much easy to understand that if an employee will allotted with job enrichment.

    5. Mis-communication:-Because all sorts of problem and issue with the job enrichment there is possibility that company can even force some sort of miscommunication between their employees and employers.

    	Job enrichment	Job enlargement
    Job loading	It involves vertical loading of function and responsibility of the employees.	It involve a horizontal loading expansion of job.
    Purpose	The purpose is to make the job more lively challenging and satisfying.	The purpose is to reduce the mandatory in performing certain respective job.
    Skill required	It required to the development and utilisation of higher scale insanity and involvation the part of of the job holders.	It may not necessarily call for the adequation for higher level on new skill on the part of job holders.

    
     

13. SECTION-C

    1. Explain various forms of incentive plans offered by an employer in the compensation package.

    Answer:

    Incentives are effective motivator when the object to be not are clearly stated upfront and when the incentive offered are desirable. Goni are the days when one type of insanity such as money or a pat on the back word for everyone. A company that provide various type of incentive to individual workers motivate employed to to consistently do their best.

    1. Profit or gain sharing incentive plan:- Giving employees the chance to share in productivity gain or profit usually e through cash or stock bonuses can motivate them to to hit individual benchmark for help rich term wide on organisational objectives. One way to offer profit sharing is through differ compensation.

    2. The good old cash bonus:- Our time bonuses in add to regular pay increases or Commission may be paid to individuals for meeting certain customers or performing value services. One example of the type of incentive plan is offering a cash bonus for referring qualified friends who are hired and complete the probationary period. Other company might offer bonuses for achieving a specific sale goal or a for proposing an idea that saves money.

    3. We pay if you stay:- Retention bonuses reward employees for staying with the company for a particular amount of time aur through a specific event such as during a merger or acquisition for a crucial production period.

    4. Long-term, stock based incentive :- Publicly traded companies may offer long-term incentive basis on the price of common stock. These incentives help line and employees long-term financial interest with that of the company.

    5. Career development and training:- Offering specialised training in an area of interest is another valued Insanity. The key to making this work is to allow the high performing individual to choose the type of training they most value.

    6. Recognition and other non cash incentive plan :- Many employees on being recognised in front of their peers. One example is an employee of a month program. The company recognise the employees through sign in in that a lobby email specialise parking place and at staff meeting and the employee newsletter.

14. 2. Discuss the rationale of profit sharing compensation scheme. What is its importance ?

    Answer:

    Profit sharing scheme may effectively supplement other incentive plan fullstop profit sharing is a scheme to to argument the compensation of work through the sharing of profit of the company. Profit sharing may be defined as an agreement freely entered in by which the employees receive a share fixed in advance of the prophet. This definition would bonuses based on Profit which are not a shot on a counting basis.

    Objectives of profit sharing:-

    1. To promote workers efficiency

    2. To rice productivity

    3. Tum me to work field that their in depth and identical with those of the employer.

    4. To make worker behave in more responsible manner.

    5. To absorb Cooperative spirit in the worker and to minimise industrial disputes.

    6. To develop scrap adduction and waste elimination consciousness in the workers.

    7. To developna proprirtary attitude on the part of employer.

    8. To minimise labour turnover

    9. To fore Frost industrial democracy

    10. To improve employers moral

    Importance of a profit sharing plans:-

    For increasing the motivation factor and increasing the engagement rates business organisation utilise profit sharing activity fullstop profit sharing is one of the most difficult process that have employees work and their capability to perform for achieving greater result. It also increases the moral of the employer and employee relation rate.

    Profit sharing is a difficult from revenue sharing method like commission and bonds which is related to the goal that are set of employee which is reflected in the compensation plan. Most of the one rule applies to all method is used in the case of power sharing Plan full form of certain organisation employees worker on Revenue sharing plan in a certain department based on the performance of the employee.

    Only Akele define profit sharing plan which is understood by the employer will be e E result efficiently. After receiving the share of but all factor will be influenced and how it can affect the profit of the company should also be considered in such cases.

    Profit sharing plan should only be implemented by the companies which are having stable revenue and is profitable under different circumstances. Business organisation should make sure that the profit sharing plan is flexible in an economy level and the employee engagement is used after implemented it.

16. 3. Discuss the retirement benefits offered to employees along with their provisions.

    Answer:

    The retirement benefits offered to employees are:-

    1. Pension:- The minimum eligibility period for certain of pension is 10 year. A cultural government of retreating in accordance with the pension rule is titled to to receive pension on completion of at least 20 year of qualifying service.

    2. Commutation of pension:- A Central government servant has an option to to communicate a position of mention and not including 40% of it into a lump-sum payment. Not medical examination is required if the option is Exide with one year of retirement if the option is Exide after expiry of one year he she will have to undergo medical examination by the specified complete authority.

    3. Retirement Gratuity:- This is it payable to retiring vehement servant. A minimum of 5 year qualifying service and eligibility to receive service gratitude Li person is essential to get this one a time lump sum benefit.

    4. Death gratuity:- This is a one time lump sum benefit payable to the maximum on family member of government servant during the hardness. There is a nose regard to minimum length of service regarded by the the desired employee.

    5. Source gratuity:- A are tiring government servant will be entitled to service gratuity if total qualifying service is less than an earful stop amount is half month basis pay last drawn Plus D A for each completed six monthly period of qualifying service.

    6. Issue of no demand certificate:- Dues by the retiring employee on account of licenses C for government accommodation advance over payment of pay an allowance are required to be assessed by the head of office UN ultimate to the account officer two months in advance of date of retirement so that these are recovered from retirement gratuity before payment for shop

    7. General provident fund and incentive:- As per journal provided for under rule 1960 or temporary government servant of a continuous service of one year and employed pensioners and all payment a government servant are eligible to subscribe to the fund.

    8. Contributory provident fund:- The contributory providers fund rules 1962 are applicable to every known pensionable servant of the Government of belonging to any of the service under the control of president.

    9. Leave encashment:- Encashment of Give is a benefit granted under CCS rule and is not primarily benefit in encasement of earned have half pay leave standard at the credit of the the retiring government servant is on the data of retirement subject to a maximum of 300 days.

    
     

17. 4. Discuss the latest trends in compensation management.

    Answer:

    Latest trend of compensation management are.

    1. HR’s role in the organization will change:- HR and compensation for fashionable will need to reconsider how their role and responsibility fit into the overall employee experience. Selfservice and augmented service offering in nature will become the new normal and but in cloths organisation will begin to go there HR leader on employee service and satisfaction matrix.

    2. HR will prioritize employee experience to drive engagement:- Focusing on the complete employee experience rather than considering employee engagement on corporate culture stand-alone incentive will alone HR to deliver relate measurable result.

    3. More stakeholders will influence compensation delirious:- As more manager recruiter and HR business partner join discussion about the corporation professionals will need to adjust how their plan and budget to account for a new of input. Change to complaints and landscape like a ban or inquiring about candidate salary history during the interview process will mean that for researching and even involving training programme will be required to keep these organisational stakeholder up-to-date.

    4. Communication and enablement will empower manager to do more:- we aapki to be 10 ki transactional point between business strategy and day-to-day employee activity.

    5. Compensation’s conscience will pay dividends:- HR are compensation professional will need to report pay discussion around business outcome to drive action. Pay equity is a critical part of the overall employee experience and making pay equity and priority can positively impact on organisations bottom line.

    6. HR specialists will replace generalist roles:- The best in class HR department in 2018 will be focus analyse and high specialised. With 22% of large organisation looking to describe the future headcount in HR generalist role as a profession should focus on developing value specialised skills at the complement their previous generated experience on order to grow their careers.

    7. Internal development will be key to driving retention and performance:- Retaining stop talent in 2018 will require organisation to think less leniently about career program and to investment in tools that help map non traditional career path.

    8. Stand alone AI Won’t have a role in HR:- AI will only work if it integrator in two workflows as artificial intelligence e become more common in HR application fullstop HR professional will need to determine which situation will have to biggest impact on their business.