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Compensation And Reward Philosophy

SUBMITTED TO– PROF. SAROJ MOHAPATRADAYASAGAR MISHRA

R:N-00810/20/2010

CATERPILLAR’S COMPENSATION AND REWARD PHILOSOPHY

Pay is perhaps the most visible part Caterpillar’s compensation package. Its highly competitive salary structure is designed to attract, retain and motivate the valuable employees whose contributions help the company succeed year after year.

“Compensation and reward practices represent our employees’ contributions to the success of the company and Caterpillar’s investment in their financial security.”1

PayIn addition to the base salary, Caterpillar offers incentive plans and gain-sharing plans that provides employees the opportunity to impact their compensation for achieving targeted corporate and business unit results. Caterpillar's incentive plans also ensure that employees continue to consider the outcome of their decisions on the company, as well as their individual business unit.

RetirementMatches to employee 401(k) plans can vary, depending on position. However, no matter what the contribution, it encourages employees to save for their financial future. Caterpillar's 401(k) plan allows employees to save money on a pre-tax basis and lets them chose how to invest their savings in several different funds.

RetirementIncomePlanThis plan is designed to provide employees with pension benefits to help meet their retirement needs. Our employees do not contribute to the plan; Caterpillar makes the investment on their behalf.

FORD MOTOR COMPANY’S COMPENSATION AND REWARD PHILOSOPHY

Ford is the company which revolutionized the whole US wage system by giving wages in which, its every employee will able to purchase a car for themselves.

Ford (2010):- Ford is a company that focused on designing better cars, but also cares about its employees, their family and their community.

Ford believes its employee as their most valuable asset and driving force behind its success because of this, ford designed its compensation and reward programs which recognizes the diverse need of all the employees. It gives benefits like Medical, Dental, Vision, Paid Vacation, Paid Company Holidays, Ford Flexible Work Program, Savings & Stock Investment Plan (401K),Ford Retirement Plan, Vehicle Purchase Plan, Community Service Program, Ford Employee Recreation Program (FERA).

REFERENCES..................................................................................................................................................................1. http://www.cat.com

COMPENSATION AND REWARD PHILOSOPHY

HUL since from its inception believes in performance based compensation and reward policy. Compensation and reward practices in HUL recognizes both company collective success and employee individual contribution to it.

HUL’s reward philosophy is to provide market competitive salary and benefits with a strong linkage between performance and pay. Accordingly, its overall reward package includes

( TABLE-1 Source-: http://www.hul.co.in)

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( TABLE-1 Source-: http://www.hul.co.in)

Fixed Salary that is competitive with its peer companies

Variable Salary that is linked to company and individual performance

Equity compensation (at eligible levels) that is linked to long term (3 year) company performance and employee potential.

Benefits and Perquisites aimed at providing choices to employee

Retirement benefits that are market competitive.

BP’S COMPENSATION AND REWARD PHILOSOPHY

To attract and retain the best people, BP offer competitive reward packages and link pay to performance, with its top performers receiving industry-leading bonus rates.

Learning, growth and reward of a BP employee will be supported by BP’s strong focus on performance management. At BP, this has two major parts: firstly BP align employee individual objectives with the goals of the business; secondly BP measure and recognise how effectively employee have performed against his objectives and contributed to those goals. This approach enables BP to recognise strong individual performance, and to reward it accordingly.

But this emphasis on performance management isn’t just about the financial reward - a clear set of objectives provides employee with sharp focus and direction, giving employee a strong sense of engagement with their work and the value that employee , personally, add to BP.

‘’At BP, we understand that shared goals can inspire great individual performances – performances that contribute to our ability to supply the world with responsible energy.”2

GOOGLE’S COMPENSATION AND REWARD PHILOSOPHY

While designing its compensation and reward practices Google rooted three principles in its Organization DNA.The three principles that support the practice of Fairness in Google are equity, impartiality and justice.

A sense of equity is conveyed through balanced treatment of all people in the distribution of intangible and tangible rewards.

Manager impartiality is displayed through an avoidance of favouritism in hiring and promotions practices, and absence of politicking in the workplace.

Justice is seen as a lack of discrimination based on people’s personal characteristics, and the presence and utilization of a fair process for appeals.

Google's compensation philosophy is to deliver pay in ways that support its primary business objectives, which includes supporting the company's culture of innovation and performance and attracting and retaining the world's best talent. To achieve these objectives, Google has developed its compensation programs on a pay-for-performance platform intended to provide "start-up-like" reward opportunities for strong performance as well as downside exposure with underperformance. This philosophy applies to all Google employees, with increasing proportions of "leveraged" or "at-risk" compensation being tied to increasing levels of leadership and responsibility.

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2. http://www.bp.com