https://www.youtube.com/watch?v=XXgo-hTRQV8
Topic: Compensation & Benefits Dashboard
Speaker: Praveen Ratna, SHRM and HRCI certified HR professional
Hi everyone,
Human resource executives need to be able to quickly review and analyze all critical KPIs in one place. Compensation metrics are the tools you use to measure, analyze, and decide how effective your compensation practices and policies are and what you can do to improve them. They help you “understand how pay is distributed across your team, so you can make informed decisions that will help you attract and keep employees.”
Takeaways from the above video
Overview of compensation
Compensation is a remuneration awarded to an employee in exchange for their services to the organization. This can be in direct and indirect or in cash or non cash forms. This is the biggest expense for organisation towards its employee.
Total Compensation = Fixed pay + Variable pay + Benefits
Compensation Ratio
Compensation ratio mostly termed as compa ratio. This is the most common metrics used in defending the salary range in the organization. It simply compares the salary of an individual employee from the median of the market salary given for the specific job.
Broadly it is categorized in the three buckets
(A) <1-Where salary is less than median
(B) =1-Where salary is equal to median
(C) >1-Where salary is more than median
It can be calculated as
Compensation Ratio=(Actual Salary/Median of Market Salary)*100
Factors affecting compensation ratio
Computation of compensation is bit technical and complicated so you should always the complication in mind. The complexities can be
1. Job title
2. Responsibilities Vs. Job Title
3. Tenure
4. Experience
5. Geographic variation
6. Employee Branding
7. Individual quality
8. Compensation mix
Benchmarking of Compensation
Benchmarking of compensation gives liberty to recruitment managers to attract and retain the potential candidates as well as to reduce the turnover rate. It helps in cost savings of recruitment process.
While setting the compensation range Benchmarking is an important aspect on which you must upon. You should compare the employee’s salaries with appropriate benchmarks from the market data. Jobs roles and responsibilities plays an important role in this exercise as it may very from company to company. Compensation can be in monetary and non-monetary both.
Compensation Budgeting
Compensation budgeting should not overrate and oversimplified it should be moderate and should consider all the aspect as it is a financial impact on organization as well as employee short sighted approach can lead to a budget short fall and employee dissatisfaction. Successful compensation budgeting required comprehensive approach in the favour of employee as well as company.
In short thoughtful and comprehensive budgeting can eliminate the hustle of recruitment managers give the insight data to CXO’s to manage the business and to keep employee motivated and committed towards the success of the organization.
Thought of the day: “No one learns as much about a subject as one who is forced to teach it.”― Peter Drucker(Father of Modern Management)
Please Like, Share and Follow HR SUCCESS TALK for daily updates
Youtube
https://youtube.com/channel/UCxy1zD-RFZlxT0I1279cHjg
Happy Learning!
Regards
Vijay Tiwari
Team - HR SUCCESS TALK
From India, Bhopal
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1Topic: Compensation & Benefits Dashboard
Speaker: Praveen Ratna, SHRM and HRCI certified HR professional
Hi everyone,
Human resource executives need to be able to quickly review and analyze all critical KPIs in one place. Compensation metrics are the tools you use to measure, analyze, and decide how effective your compensation practices and policies are and what you can do to improve them. They help you “understand how pay is distributed across your team, so you can make informed decisions that will help you attract and keep employees.”
Takeaways from the above video
Overview of compensation
Compensation is a remuneration awarded to an employee in exchange for their services to the organization. This can be in direct and indirect or in cash or non cash forms. This is the biggest expense for organisation towards its employee.
Total Compensation = Fixed pay + Variable pay + Benefits
Compensation Ratio
Compensation ratio mostly termed as compa ratio. This is the most common metrics used in defending the salary range in the organization. It simply compares the salary of an individual employee from the median of the market salary given for the specific job.
Broadly it is categorized in the three buckets
(A) <1-Where salary is less than median
(B) =1-Where salary is equal to median
(C) >1-Where salary is more than median
It can be calculated as
Compensation Ratio=(Actual Salary/Median of Market Salary)*100
Factors affecting compensation ratio
Computation of compensation is bit technical and complicated so you should always the complication in mind. The complexities can be
1. Job title
2. Responsibilities Vs. Job Title
3. Tenure
4. Experience
5. Geographic variation
6. Employee Branding
7. Individual quality
8. Compensation mix
Benchmarking of Compensation
Benchmarking of compensation gives liberty to recruitment managers to attract and retain the potential candidates as well as to reduce the turnover rate. It helps in cost savings of recruitment process.
While setting the compensation range Benchmarking is an important aspect on which you must upon. You should compare the employee’s salaries with appropriate benchmarks from the market data. Jobs roles and responsibilities plays an important role in this exercise as it may very from company to company. Compensation can be in monetary and non-monetary both.
Compensation Budgeting
Compensation budgeting should not overrate and oversimplified it should be moderate and should consider all the aspect as it is a financial impact on organization as well as employee short sighted approach can lead to a budget short fall and employee dissatisfaction. Successful compensation budgeting required comprehensive approach in the favour of employee as well as company.
In short thoughtful and comprehensive budgeting can eliminate the hustle of recruitment managers give the insight data to CXO’s to manage the business and to keep employee motivated and committed towards the success of the organization.
Thought of the day: “No one learns as much about a subject as one who is forced to teach it.”― Peter Drucker(Father of Modern Management)
Please Like, Share and Follow HR SUCCESS TALK for daily updates
Youtube
https://youtube.com/channel/UCxy1zD-RFZlxT0I1279cHjg
Happy Learning!
Regards
Vijay Tiwari
Team - HR SUCCESS TALK
From India, Bhopal
Acknowledge(0)Amend(0)
From the information provided, it seems like you're seeking a more in-depth understanding of how to manage and utilize compensation metrics effectively in order to make informed decisions that will help attract and retain employees. Here are some actionable steps you can take:
1. Understanding Total Compensation: 💰
- Remember, total compensation includes Fixed pay, Variable pay, and Benefits.
- Always keep in mind that compensation is the biggest expense for an organization towards its employees.
2. Using Compensation Ratio (Compa Ratio): 📉
- Compa Ratio compares an individual's salary with the median market salary for their specific job.
- It's calculated as follows: Compensation Ratio = (Actual Salary/Median of Market Salary) * 100.
- Use this ratio to understand if your employee's salary is below (<1), at (=1), or above (>1) the median market salary.
3. Considering Factors Affecting Compensation: 📊
- Several factors can affect the computation of compensation, including job title, responsibilities, tenure, experience, geographic variation, employee branding, individual quality, and the compensation mix.
- Be mindful of these factors when determining compensation packages.
4. Benchmarking Compensation: 🏦
- Benchmarking gives you the ability to attract and retain potential candidates while reducing turnover.
- Compare your employee salaries with market data benchmarks. Remember, job roles and responsibilities may vary from company to company.
5. Budgeting for Compensation: 💸
- Ensure your compensation budgeting is comprehensive and takes into account all aspects.
- A short-sighted approach could lead to budget shortfalls and employee dissatisfaction.
Remember, thoughtful and comprehensive budgeting can eliminate hassle for recruitment managers, provide insightful data to CXOs to manage the business, and keep employees motivated and committed towards the success of the organization.
Happy learning! 🎈👍 Keep following HR SUCCESS TALK for daily updates.
From India, Gurugram
Acknowledge(0)Amend(0)
1. Understanding Total Compensation: 💰
- Remember, total compensation includes Fixed pay, Variable pay, and Benefits.
- Always keep in mind that compensation is the biggest expense for an organization towards its employees.
2. Using Compensation Ratio (Compa Ratio): 📉
- Compa Ratio compares an individual's salary with the median market salary for their specific job.
- It's calculated as follows: Compensation Ratio = (Actual Salary/Median of Market Salary) * 100.
- Use this ratio to understand if your employee's salary is below (<1), at (=1), or above (>1) the median market salary.
3. Considering Factors Affecting Compensation: 📊
- Several factors can affect the computation of compensation, including job title, responsibilities, tenure, experience, geographic variation, employee branding, individual quality, and the compensation mix.
- Be mindful of these factors when determining compensation packages.
4. Benchmarking Compensation: 🏦
- Benchmarking gives you the ability to attract and retain potential candidates while reducing turnover.
- Compare your employee salaries with market data benchmarks. Remember, job roles and responsibilities may vary from company to company.
5. Budgeting for Compensation: 💸
- Ensure your compensation budgeting is comprehensive and takes into account all aspects.
- A short-sighted approach could lead to budget shortfalls and employee dissatisfaction.
Remember, thoughtful and comprehensive budgeting can eliminate hassle for recruitment managers, provide insightful data to CXOs to manage the business, and keep employees motivated and committed towards the success of the organization.
Happy learning! 🎈👍 Keep following HR SUCCESS TALK for daily updates.
From India, Gurugram
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PMS COmpensation and Benefits.doc
Certified Compensation & Benefits Manager.pdf