A

SYNOPSIS REPORT
ON
COMPENSATION MANAGEMENT
AT
HERITAGE FOODS IND LTD
Submitted
By
M. JYOTHIRMAI
H.T.NO: 1302-20-672-030
PROJECT SUBMITTED IN PARTIAL FULFILLMENT FOR THE AWARD OF DEGREE OF

MASTER OF BUSINESS ADMINISTRATION

Department of Business Administration

AURORA’S PG COLLEGE
RAMANTHAPUR
(Affiliated to Osmania University)
2019-2021
 Aurora’s PG College (MCA), Ramanthapur
Department of Management

SYNOPSIS

Title of the Project : COMPENSATION MANAGEMENT

Student Name : M. JYOTHIRMAI

Hall Ticket Number : 1302-20-672-030

Signature of the Student :

Signature of the Guide :

 TABLE OF CONTENTS
S. No. CHAPTER Page No

1.1 INTRODUCTION

1.2 NEED FOR THE STUDY

1.3 SCOPE OF THE STUDY

1.4 OBJECTIVES OF THE STUDY

1.5 RESEARCH METHODOLOGY

2.1 THEORITICAL REVIEW OF

LITERATIRE
2.2 ARTICLES

3.1 INDUSTRY PROFILE

3.2 COMPANY PROFILE

6 PROPOSED OUTCOMES

7 LIMITATIONS OF THE STUDY

8 CHAPTERISATION

10 BIBLIOGRAPHY
 ABSTRACT

Compensation Management is an integral part of the management of the organization.

Compensation Management contributes to the overall success of the organization in several

ways. To be effective, the managers must appreciate the value of competitive pay, their

human resources, and have an investment view of payroll costs. We want to maintain pay

levels that attract and retain quality employees while recognizing the need to manage payroll

costs.

Pay is a difficult topic of conversation in most organizations. In fact, the topic is altogether

taboo in many workplaces. It simply isn't discussed unless absolutely necessary. And, when it

is necessary, such as when a pay raise (or lack of one) must be explained to an employee,

many managers find themselves at a loss for words. As the dreaded date of such a discussion

approaches, managers may begin checking their sick time banks to see if they can disappear

for a day or two.

While it may be a touchy subject, pay is a critical factor in the work lives of employees. Jobs

are accepted or rejected based in part on starting salary and the opportunity for future

increases in pay. Employees compare their pay to that of others in the same line of work.

They constantly compare their pay level to their level of contribution, trying to determine

whether the ratio of give and receive is a fair one. While it may not be a frequent topic of

open discussion, employees think about pay often.

 INTRODUCTION

Compensation Management is an integral part of the management of the organization.

Compensation Management contributes to the overall success of the organization in several

ways. To be effective, the managers must appreciate the value of competitive pay, their

human resources, and have an investment view of payroll costs. We want to maintain pay

levels that attract and retain quality employees while recognizing the need to manage payroll

costs.

Pay is a difficult topic of conversation in most organizations. In fact, the topic is altogether

taboo in many workplaces. It simply isn't discussed unless absolutely necessary. And, when it

is necessary, such as when a pay raise (or lack of one) must be explained to an employee,

many managers find themselves at a loss for words. As the dreaded date of such a discussion

approaches, managers may begin checking their sick time banks to see if they can disappear

for a day or two.

While it may be a touchy subject, pay is a critical factor in the work lives of employees. Jobs

are accepted or rejected based in part on starting salary and the opportunity for future

increases in pay. Employees compare their pay to that of others in the same line of work.

They constantly compare their pay level to their level of contribution, trying to determine

whether the ratio of give and receive is a fair one. While it may not be a frequent topic of

open discussion, employees think about pay often.

Approaches of compensation management

There are 3P approach of developing a compensation policy centered on the fundamentals of

paying for Position, Person and Performance. Drawing from external market information

and internal policies, this program helps establish guidelines for an equitable grading

structure, determine capability requirements and creation of short and long-term incentive

plans.

The 3P approach to compensation management supports a company's strategy, mission and

objectives. It is highly proactive and fully integrated into a company's management practices

and business strategy. The 3P system ensures that human resources management plays a

central role in management decision making and the achievement of business goals.

 Pay for position

 Pay for person
 Pay for performance

Because it is so important to employees, the issue of pay deserves to be clearly addressed. In

spite of their hesitance, managers are capable of dealing with this sometimes difficult issue in

a professional and effective manner. By keeping the following basic points about pay in

mind, they can address virtually any pay-related topic with their employees in a professional

and productive manner.

1.2 NEED FOR THE STUDY:

Compensation and Reward system plays vital role in a business organization. Since, among

four M’s, i.e. Men, Material, Machine and Money, Men has been most important factor, it is

impossible to imagine a business process without Men. Every factor contributes to the

process of production/business. It expects return from the business process such as rent is the

return expected by the landlord, capitalist expects interest and organizer i.e. entrepreneur

expects profits. Similarly the labour expects wages from the process.

Labour plays vital role in bringing about the process of production/business in motion. The

other factors being human, has expectations, emotions, ambitions and egos.

Labour therefore expects to have fair share in the business/production process. Therefore a

fair compensation system is a must for every business organization. The fair compensation

system will help in the following:

 An ideal compensation system will have positive impact on the efficiency and results

produced by employees. It will encourage the employees to perform better and

achieve the standards fixed.

 It will enhance the process of job evaluation. It will also help in setting up an ideal job

evaluation and the set standards would be more realistic and achievable.

 Such a system should be well defined and uniform. It will be apply to all the levels of

the organization as a general system.

 The system should be simple and flexible so that every employee would be able to

compute his own compensation receivable.

1.3 SCOPE OF THE STUDY
The compensation management in (HERITAGE FOODS IND LTD).Refers to a person’s

feeling of satisfaction on their job. It is different from person to person. The researcher has

chosen to measure the level compensation management in HERITAGE FOODS IND LTD

The study considers the impact of 10 factors on compensation management in it concentrates

on the effect of factors in general, but no exclusive study is made on them.

The study considers only the perceptual elements of employees and does not focus on ground

realities. The scope of study cover: work conditions, compensation, extra benefits,

conveyance treatment of superiors, colleagues, duly timings, and grievance reprisal

mechanism and promotion policy.

1.4 OBJECTIVES:

1) To Understand the concepts of compensation management in HERITAGE FOODS

IND LTD

2) To Explore the role of compensation management

3) To Examine Pay roll system in HERITAGE FOODS IND LTD

1.5 RESEARCH METHODOLOGY

The methodology that is adopted for the study is such that it facilities the data accumulation.

The information is gathered through survey method. The survey method has been adopted for

collecting the data from employees.

RESEARCH DESIGN:

Research Design is defined as the specification of methods and procedures for acquiring the

information needed. Generally the research design is any of the following three types-

DESCRIPTIVE, EXPLORATORY and CASUAL.

DESCRIPTIVE STUDY:

Descriptive study/research is marked by the prior formulations of specific research questions.

The investigator already knows a substantial amount about the research problem before the

project is initiated. Hence this is chosen for my research.

EXPLORATORY STUDY:

The major purpose of exploratory study is the identification of problem, the more precision

formulation of problem and the formulation of new alternative courses of action.

CASUAL STUDY

The study involves the determination of the causes of what the researchers are predicting. this

is mainly a cause and effect study. The research design selected by the researcher in the

present study is “DESCRIPTIVE” in nature.

RESEARCH INSTRUMENT:

HR research has a one main research instruments in collecting primary data. That is

questionnaires. In order to extract firsthand information from the respondents, a pre-tested

questionnaire was prepare and the same was administered to the respondents.

DATA SOURCES:

Data means a collection of facts in real life statistical data is a collection of facts in numerical

figures. The data sources are usually identified using the type of data needed. There are two

types of data.

1. Primary data

2. Secondary data

PRIMARY DATA:

The first-hand information by the investigator by means of observation face to face

questioning, telephone interview and mailing questionnaire is called primary data. Primary

data consists of original information gathered for a specific purpose.

SOURCES OF PRIMARY DATA;-

For the purpose of present study, the primary data collected from respondents by

contacting them personally.

SECONDARY DATA:

Secondary data consists of information that already exists somewhere, having been collected

for another purpose

SOURCES OF SECONDARY DATA:

For the purpose of present study, the secondary data was collected from published data of the

companies. Population is the aggregate of objects animate and in animate, under study in any
statistical investigation. The population for the study here was employees in HERITAGE FOODS

IND LTD.

SAMPLING PROCEDURE

With a view to arrive at the sample population for the study, a “Purposive-Cum convenient

sampling” was followed.

SAMPLE SIZE

The sample size includes 60 employees who are working in the in HERITAGE FOODS IND

LTD
2.1 THEORITICAL BACKGROUND

COMPENSATION MANAGEMENT

Human Resource is the most vital resource for any organization. It is responsible for each and

every decision taken, each and every work done and each and every result. Employees should

be managed properly and motivated by providing best remuneration and compensation as per

the industry standards. The lucrative compensation will also serve the need for attracting and

retaining the best employees.

Compensation is the remuneration received by an employee in return for his/her contribution

to the organization. It is an organized practice that involves balancing the work-employee

relation by providing monetary and non-monetary benefits to employees.

Compensation is an integral part of human resource management which helps in motivating

the employees and improving organizational effectiveness.

COMPONENTS OF COMPENSATION SYSTEM: Compensation systems are designed

keeping in minds the strategic goals and business objectives. Compensation system is

designed on the basis of certain factors after analyzing the job work and responsibilities.

Components of a compensation system are as follows:

 Types of Compensation: Compensation provided to employees can direct in the form of

monetary benefits and/or indirect in the form of non-monetary benefits known as perks, time

off, etc. Compensation does not include only salary but it is the sum total of all rewards and

allowances provided to the employees in return for their services. If the compensation offered

is effectively managed, it contributes to high organizational productivity.

Direct Compensation: Direct compensation refers to monetary benefits offered and

provided to employees in return of the services they provide to the organization. The

monetary benefits include basic salary, house rent allowance, conveyance, leave travel

allowance, medical reimbursements, special allowances, bonus, Pf/Gratuity, etc. They are

given at a regular interval at a definite time.

Basic Salary: Salary is the amount received by the employee in lieu of the work done by

him/her for a certain period say a day, a week, a month, etc. It is the money an employee

receives from his/her employer by rendering his/her services.

House Rent Allowance:Organizations either provide accommodations to its employees who

are from different state or country or they provide house rent allowances to its employees.

This is done to provide them social security and motivate them to work.

Conveyance: Organizations provide for cab facilities to their employees. Few organizations

also provide vehicles and petrol allowances to their employees to motivate them.
2.2 ARTICLES/JOURNALS

ARTICLE 1

Title:Effects of occupational COMPENSATION MANAGEMENT intervention programs: A

meta-analysis.

Author name:Richardson, Katherine M. Rothstein, Hannah R.

Journal name:Occupational Health Psychology.

Journal number: 13(1), 69-93.

Abstract:

A meta-analysis was conducted to determine the effectiveness of COMPENSATION

MANAGEMENT interventions in occupational settings. Thirty-six experimental studies were

included, representing 55 interventions. Total sample size was 2,847. Of the participants,

59% were female, mean age was 35.4, and average length of intervention was 7.4 weeks. The

overall weighted effect size (Cohen's d) for all studies was 0.526 (95% confidence interval =

0.364, 0.687), a significant medium to large effect. Interventions were coded as cognitive-

behavioral, relaxation, organizational, multimodal, or alternative. Analyses based on these

subgroups suggested that intervention type played a moderating role. Cognitive-behavioral

programs consistently produced larger effects than other types of interventions, but if

additional treatment components were added the effect was reduced. Within the sample of

studies, relaxation interventions were most frequently used, and organizational interventions

continued to be scarce. Effects were based mainly on psychological outcome variables, as

opposed to physiological or organizational measures.

ARTICLE 2

Title: The job demands-resources model to predict burnout and performance

Author name:Arnold B. Bakker,Evangelia Demerouti,Willem Verbeke

Journal name:Using the job demands-resources model to predict burnout and performance

Journal number:10.1002/hrm.2000

Abstract:

The job demands-resources (JD-R) model was used to examine the relationship between job

characteristics, burnout, and (other-ratings of) performance (N = 146). We hypothesized that

job demands (e.g., work pressure and emotional demands) would be the most important

antecedents of the exhaustion component of burnout, which, in turn, would predict in-role

performance (hypothesis 1). In contrast, job resources (e.g., autonomy and social support)

were hypothesized to be the most important predictors of extra-role performance, through

their relationship with the disengagement component of burnout (hypothesis 2). In addition,

we predicted that job resources would buffer the relationship between job demands and

exhaustion (hypothesis 3), and that exhaustion would be positively related to disengagement

(hypothesis 4). The results of structural equation modeling analyses provided strong support

for hypotheses 1, 2, and 4, but rejected hypothesis 3. These findings support the JD-R

model's claim that job demands and job resources initiate two psychological processes,

which eventually affect organizational outcomes. © 2004 Wiley Periodicals, India

ARTICLE 3
Title:COMPENSATION MANAGEMENT in Medical Education: A Review of the

Literature

Author name:Shapiro, Shauna L. MA; Shapiro, Daniel E. PhD; Schwartz, Gary E. R. PhD

Journal name:COMPENSATION MANAGEMENT in Medical Education: A Review of the

Literature

Journal number:July 2000 - Volume 75 - Issue 7 - p 748–759

Abstract:

Purpose To review systematically clinical studies providing empirical data on stress-

management programs in medical training.

Results Although the search yielded over 600 articles discussing the importance of

addressing the stress of medical education, only 24 studies reported intervention programs,

and only six of those used rigorous scientific method. Results revealed that medical trainees

participating in stress-management programs demonstrated- improved immunologic

functioning, decreases in depression and anxiety, increased spirituality and empathy,

enhanced knowledge of alternative therapies for future referrals, improved knowledge of the

effects of stress, greater use of positive coping skills, and the ability to resolve role conflicts.

Despite these promising results, the studies had many limitations.

Conclusion The following considerations should be incorporated into future research:

rigorous study design, including randomization and control (comparison) groups,

measurement of moderator variables to determine which intervention works best for whom,

specificity of outcome measures, and follow-up assessment, including effectiveness of future

patient care.
ARTICLE 4
Title: A COMPENSATION MANAGEMENTprogramme for inflammatory bowel disease

patients

Author name:Barbara Milne RN, MScN, Gloria Joachim RN MSN,Joseph Niedhardt MD

Journal name: A COMPENSATION MANAGEMENT programmed for inflammatory

bowel disease patients

Journal number: 10.1111/j.1365-2648.1986.tb01288.

Abstract:This randomized controlled trial was designed to determine whether practicing

COMPENSATION MANAGEMENT techniques would decrease disease activity and

promote psychosocial functioning in inflammatory bowel disease patients. Eighty

ambulatory adults received a pre-intervention interview, at which time baseline data about

disease activity and psychosocial functioning were collected. They were then randomly

assigned to either the intervention or control group. The intervention group received six

classes on COMPENSATION MANAGEMENT which included autogenic, personal

planning skills and communication techniques. All 80 subjects were followed up at 4-month

intervals for 1 year by interviewers who were blind to group designation. The data collection

instruments, which were used at all assessment points, comprised three questionnaires: the

Crohn's Disease Activity Index (CDAI) and the Inflammatory Bowel Disease (IBD) Stress

Index. These instruments produced scores which decreased with improvement in physical

and psychosocial well-being. At all assessment points, both the CDAI and IBD Stress Index

scores dropped significantly (P<005) from baseline in the treatment group. However, there

was no significant change in the scores often control group throughout the study year.
ARTICLE 5
Title: How changes in job demands and resources predict burnout, work engagement, and

sickness absenteeism

Author name:Wilmar B. Schaufeli, Arnold B. Bakker,Willem Van Rhenen

Journal name: work engagement, and sickness absenteeism

Journal number:10.1002/job.595

Abstract: The present longitudinal survey among 201 telecom managers supports the Job

Demands-Resources (JD-R) model that postulates a health impairment process and a

motivational process. As hypothesized, results of structural equation modeling analyses

revealed that: (1) increases in job demands (i.e., overload, emotional demands, and work-

home interference) and decreases in job resources (i.e., social support, autonomy,

opportunities to learn, and feedback) predict burnout, (2) increases in job resources predict

work engagement, and (3) burnout (positively) and engagement (negatively) predict

registered sickness duration (“involuntary” absence) and frequency (“involuntary” absence),

respectively. Finally, consistent with predictions results suggest a positive gain spiral: initial

work engagement predicts an increase in job resources, which, in its turn, further increases

work engagement. Copyright © 2009 John Wiley & Sons, Ltd.

LIMITATIONS OF THE STUDY:

 This study covers those employees who are working at HERITAGE FOODS

IND LTD

 The Understand and knowledge may vary from person to person. The replied

gives by the respondents are taken for granted, though they are not uniform.

 Since names are mentioned in most of questionnaires, most of the employees

answered favorable to the company. This might have led to wring finding in the

study.

 The interpretation being based on percentage method is not definite.

 The report is subjects to changes with fast changing scenario.

 PROPOSAL OUT COMES

 There should be coordination and cooperation between executives and non-

executives.

 Suggestive and collective bargaining should be more effective that they can play

much greater role in eliminating the communication gap between management and

workers.

 The employees want the company to give rewards in accomplishing the tasks.

 Improve the promotion and recognition system.

 Every year a survey should be conducted by management regarding the grievances

and settlement should be done so that every employee will work with dedication.
 3.1 INDUSTRY PROFILE

Introduction
The Indian food industry is poised for huge growth, increasing its contribution to world food
trade every year. In India, the food sector has emerged as a high-growth and high-profit
sector due to its immense potential for value addition, particularly within the food processing
industry.

Accounting for about 32 per cent of the country’s total food market, The Government of
India has been instrumental in the growth and development of the food processing industry.
The government through the Ministry of Food Processing Industries (MOFPI) is making all
efforts to encourage investments in the business. It has approved proposals for joint ventures
(JV), foreign collaborations, industrial licenses, and 100 per cent export oriented units.

Market Size
The Indian food and grocery market is the world’s sixth largest, with retail contributing 70
per cent of the sales. The Indian food processing industry accounts for 32 per cent of the
country’s total food market, one of the largest industries in India and is ranked fifth in terms
of production, consumption, export and expected growth. It contributes around 8.80 and 8.39
per cent of Gross Value Added (GVA) in Manufacturing and Agriculture respectively, 17 per
cent of India’s exports and six per cent of total industrial investment. The Indian gourmet
food market is currently valued at US$ 1.3 billion and is growing at a Compound Annual
Growth Rate (CAGR) of 20 per cent. India's organic food market is expected to increase by
three times by 2020.

The online food ordering business in India is in its nascent stage, but witnessing exponential
growth. With online food delivery players like FoodPanda, Zomato, TinyOwl and Swiggy
building scale through partnerships, the organised food business has a huge potential and a
promising future. The online food delivery industry grew at 190 per cent year-on-year with
an estimated Gross Merchandise Value (GMV) of US$ 300 million in 2020.
 COMPANY PROFILE

The Heritage Group, founded in the year 1992 by Sri Nara Chandra Babu Naidu, is one of the
fastest growing Private Sector Enterprises in India, with five-business divisions viz., Dairy,
Retail, Agri, Bakery and Renewable Energy under its flagship Company Heritage Foods
Limited (Formerly known as Heritage Foods (India) Limited). The annual turnover of
Heritage Foods crossed Rs.1726.99 crores in financial year 2015-14.

Presently Heritage’s milk products have market presence in Andhra Pradesh,Telangana,

Karnataka, Kerala, Tamil Nadu, Maharashtra, Odisha and Delhi and its retail stores across
Bangalore, Chennai and Hyderabad. Integrated Agri operations are in Chittoor and Medak
Districts and these are backbone to retail operations and the state of art Bakery division at
Uppal, Hyderabad, Telangana.

In the year 1994, HFIL went to Public Issue to raise resources, which was oversubscribed 54
times and its shares are listed under B1 Category on BSE (Stock Code: 519552) and NSE
(Stock Code: HERITGFOOD)

About the founder:

Sri Chandra Babu Naidu is one of the greatest Dynamic, Pragmatic,

Progressive and Visionary Leaders of the 21st Century. With an objective of bringing
prosperity in to the rural families through co-operative efforts, he along with his relatives,
friends and associates promoted Heritage Foods in the year 1992 taking opportunity from the
Industrial Policy, 1991 of the Government of India and he has been successful in his
endeavour.

At present, Heritage has market presence in all the states of South India. More
than three thousand villages and five lakh farmers are being benefited in these states. On the
other side, Heritage is serving more than 6 lakh customer’s needs, employing more than 700
employees and generating indirectly employment opportunity to more than 5000 people.
Beginning with a humble annual turnover of just Rs.4.38 crores in 1993-94, the sales
turnover has reached close to Rs.300 crores during the financial year 2005-2006.

Sri Naidu held various coveted and honourable positions including Chief
Minister of Andhra Pradesh, Minister for Finance & Revenue, Minister for Archives &
Cinematography, Member of the A.P. Legislative Assembly, Director of A.P. Small
Industries Development Corporation, and Chairman of Karshaka Parishad.

Sri Naidu has won numerous awards including " Member of the World
Economic Forum's Dream Cabinet" (Time Asia), "South Asian of the Year " (Time Asia), "
Business Person of the Year " (Economic Times), and " IT Indian of the Millennium " (India
Today).

Sri Naidu was chosen as one of 50 leaders at the forefront of change in the
year 2000 by the Business Week magazine for being an unflinching proponent of technology
and for his drive to transform the State of Andhra Pradesh.
 CHAPTERISATION

CHAPTER -1 - INTRODUCTION

CHAPTER - 2 REVIEW OF LITERATURE

CHAPTER - 3 - INDUSTRY PROFILE & COMPANY PROFILE

CHAPTER - 4 - DATA ANALYSIS AND INTERPRETATION

CHAPTER - 5 – SUMMARY AND CONCLUSION

 BIBLIOGRAPHY

BOOKS

 Aswathappa.k, Human resource and personnel management, 3/e, TMH, 2003.

 Mamoria.C.B and Gankar.S.V. Personnel management, text and cases, Himalaya

Publications, 2003.

 Gary Dessler, Human Resource Management, 9/e, Prentice Hall India, 2003.

 Dipak Kumar Bhattacharyya, Compensation Management, First Edition published in

2009 Second Edition published in 2014, Oxford University

 S.P. Gupta, Statistical Methods, 34/e, Sultan Chand & Sons.

JOURNALS

 Richardson, Katherine M.Rothstein, Hannah R. Effects of occupational Compensation

Management Intervention program. 13(1),69-93

 Arnold B. Bakker, Evangelia Domeroutie, William Verbeke.The job demands-

resources model to predict burnout and performance.10,1002/HRM,2000

 Shapiro, Shauna L, MA; Daniel E Schwartz Ph.D; Gary E R Ph.D.Compensation

Management in Medical Education: A review of the literature. July 2000, volume 75-

issue 7- p748-559

 Barbara Milne RN, M.Sc, Gloria Joachim RN M.Sc, Joseph Niedhardt MD.A

compensation Management programme for inflammatory bowel disease

patient.10,1111/j.1365-2648.1986,tb01288

 Wilmar B Schaufeli, Arnold B Bakker, Willem Van Rhenen.How change in job

demands and resources predict burnout, Work engagement and sickness, absenteeism.

10,1002/job.595
  Charles s Ph.D; Mahendra Kumar Ph.D.Cognitive Behavioral Compensation

Management reduce scrum cortical by enhancing benefits among women being

treated for early stage breast cancer. May-june 2000-volume 62-issue 3- 304-308

 Ivancevich John Matteson, Michael T Freedman, Sara M. Worksite Compensation

Management Interventions.45(2),252-261

 Demobi Ellis, OnyeizugbeChinedu, Akpunona Evans. Compensation

Management as a tool for improving organizational performance. 1(2011), pp-109-

120

 Dr. M Onwuka, Dr. Faith Onwuchekwa.Compensation Management and

Organizational Performance. p-ISSN:2319-7668, Volume 20, Issue 9 version III

( September, 2018),PP 36-47

 Madan Poonam, BajwaJasleen Khan. Compensation Management on Employee

Motivation.USRR 2015, 4(3), 59-71

NEWSPAPERS

 The Economic Times

 Business Standards

 Business Line

 Mint
INTERNET

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