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| Components Of Compensation |
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Compensation Packages in Indian Industry
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Payroll Home » Compensation » Indian Industry
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With the technological developments taking place at a higher rate, the salary packages are too increasing at a much higher rate. Pay packages in India have witnessed an increase of more than 14% in 2006 over last year’s salary packages. The compensation package comprises of monetary and non-monetary benefits that includes salary, special allowances, house rent allowance, travel allowance, mobile allowance, employee stock options, club memberships, accommodations, retirement benefits and other benefits.
Globalization is being considered as the cause for such salary hikes. The establishment of multi national companies and privatization has led the Indian industry to witness higher salary package. | |
With the immense competition of attracting and retaining talented human resource, compensation package is the only motivation factor available with the organizations be it Indian origin organizations or foreign-owned multinationals.
With the high attrition rate organizations are increasing their salary packages to attract and retain talented human resource. In the race, India has begged first position followed by Lithuania and China.
Figure: Average Salary increase (%) in 2006 for various countries
Market Research- Salary Surveys
Organizations are conducting market research and purchasing the salary survey reports to formulate their own compensation strategy most competitive in the existing environment. They also make sure that it is also as per the industry standards. The salary surveys reports the salary status and compensation provided by the organization in different industries and as per the job hierarchy in the organization.
Compensation System
The compensation includes monetary and non-monetary benefits provided to employees in several forms. Some organizations provide fixed pay with incentives and other benefits and some organizations offer performance based pay that is variable in nature depending upon the performance of the employee. In India organizations follow the equal pay concept for jobs having equal worth to the organizations.
Indian Industry Analysis
Indian industries are aiming for high growth and are looking for talented human resource. For the purpose they are offering most competitive compensation packages. Besides the monetary and non-monetary benefits some organizations also offer development benefits such as online degree programmes or certification courses. Insurance sector has succeeded in increasing the compensation packages at highest rate followed by Banking and IT sectors.
Figure: Increase in compensation (%) provided by various sectors
in Indian industry
In Indian industry rate of salary hike also depends on the job position in the organizational hierarchy. During year 2006 technical and professional skill oriented jobs were offered more salary hikes than the senior management.
Figure: Salary hikes (%) at various job levels
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