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COMPENSATION MANAGEMENT TEAM

COMPENSATION MANAGEMENT TEAM. Sami Kekalainen Bettina Mühlböck Chintana Siri Songkram . Agenda. Compensation Objectives & Policies Factors Affecting Wage Mix Finnish Regulation Salary & Incentives Structures Benefits Conclusion. Compensation Objectives.

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COMPENSATION MANAGEMENT TEAM

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  1. COMPENSATION MANAGEMENT TEAM SamiKekalainen Bettina Mühlböck Chintana Siri Songkram

  2. Agenda • Compensation Objectives & Policies • Factors Affecting Wage Mix • Finnish Regulation • Salary & Incentives Structures • Benefits • Conclusion

  3. Compensation Objectives • Pay market-competitive compensation • Achieve internal & external pay equity • Ensure fair employee treatment • Promote open & understandable pay practices • Comply with all governmental compensation regulations • Promote pay-for performance standards

  4. Compensation Objectives • Mesh employees’ future performance with organizational goals • Control the compensation budget • Attract new employees • Reduce unnecessary turnover

  5. Compensation Policies • Pay-for performance standard • No pay secrecy – open policy • Different compensation options/plan for each level of managerial employee • Competitive base salary (merit pay program) • Short-term incentives - bonuses • Long-term incentives – stock plans • Indirect compensation- general benefits • Nonfinancial compensation –perks eg: employee recognition program, special relocation benefits, etc

  6. Factors Affecting the Wage Mix • Internal factors • BPO’s compensation policy • Worth of a job – job evaluation • Employee’s relative worth in meeting job requirements • BPO’s ability to pay

  7. Factors Affecting the Wage Mix • External Factors • Labor market condition • Area wage rates • Collective bargaining • cost of living • legal requirements

  8. Finnish Regulations Equal rights law, child labor law, etc. No legislated minimum wage Paid vacation Parents and family take-off 40h/week Over time salaries (138h/4 moth; 250/year) Night- and shift work bonuses

  9. Base Salaries • (Assistant Facility Manager) : € 3,000 • Facility Manager : € 4,500 • Regional Manager : € 6,000 • Functional Managers : € 7,500 • CEO : € 10,000

  10. Profit-Sharing Plan • Profit-sharing plan is intended to give all employees the opportunity to increase their earnings by contributing to the growth of organization -can help to stimulate employees to think and feel more like partners and provide better service -increases motivation

  11. Weakness of Profit-sharing Plan • Profits may be result of factors which employees have no control • Economic conditions • National emergencies • If program fails to pay for several years in a row can cause adverse effect on productivity and employee morale

  12. Profit-Sharing Plan (cont’) • 5% of facility growth is shared between facility manager (and assistant facility managers) • 1% of regional growth is given for regional managers • Paid half yearly

  13. Stock Option Plan • Stock option plan grants to employee the right to purchase a specific number of shares of the company’s stock at a guaranteed price during a time of period • Price of option: -10% market closing price 30.12. • If the price rises then the option occurs

  14. Stock Option Plan (cont’) • Only for top management • Option amount equal to year salary -> €50,000 (base salary) + [€50,000 SOP*1,1 (growth of stock price) - €40,000]=€65,000

  15. Salary Curves

  16. Salary Curves

  17. Salary Curves

  18. Benefits • Core benefits are provided in all countries. • Flexible benefits plans (cafeteria plans) • Benefit plans that enable individual employees to choose the benefits that are best suited to their paricular needs. • Additional benefits vary among the countries.

  19. Benefits Objectives • Improve employee work satisfaction • Meet employee health and security requirements • Attract and motivate employees • Reduce turnover • Maintain a favorable competitive position

  20. Core Benefits • Health care • Day care • Cellular phone • Food services • Housing and moving expenses

  21. Additional Benefits in Finland • Company car • Free time activities • Discounts on goods and services purchased at the company’s store

  22. Additional Benefits in Russia and the Baltics • Education for children • Additional health care services • Free time activities • Discounts on goods and services purchased at the company’s store

  23. Conclusion • General guidelines for compensation that are equal in every region • Wages adjusted based on the economic conditions • labor market conditions • local wage rates • living costs • legal requirements • collective bargaining • Bonus system • Flexible benefits package

  24. Any Questions you’d like to ask?

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