COMPENSATION & BENEFITS

Origin Consultants guide Organizations design compensation and benefit programs which are cost-effective, tax efficient and compliant for the employer and employees. Our suite of compensation & benefits services includes Executive Pay Structure, Bands & Grade Structure, Rewards & Incentives Design and Performance Linked Pay.

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ESOP EMPLOYEE STOCK OWNERSHIP PLANS

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INCENTIVES, BONUS, & PERFORMANCE LINKED PAY

SALARY BAND & GRADE STRUCTURES

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EXECUTIVE PAY

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ESOP

If you wish to align the objectives your employees to that of the shareholders of organization, there is no better way than designing an ESOP Employee Stock Ownership Plan for your employees.

 

ESOP is a benefit that treats the employee as a shareholder and offers ownership interest in the company. It is a method to allow employees to buy stock in closely held or listed companies and motivates them to working towards higher revenue, higher profits and thus a higher stock value for the company.

 

Origin Consultants design an ESOP – Employee Stock Option Plan for their client companies keeping the relevant organization objectives and employee benefits in mind.

 

The Purpose of ESOP which could be one or more of the following:

Organization Culture

Succession Planning

Profit & Risk Sharing

Employee Retention

Long Term Incentive

Performance Bonus

Employee Benefit

Employee Wealth Generation

Remuneration Component

Hiring Bonus

 

ESOP Quantum Allocation and Rationale

Setting an ESOP framework which is transparent and clearly defines the who, why, how much and when of employee stock allocation. Origin Consultants believe that good governance is imperative for all companies, whether large or small. Thus, the ESOP allocation guidelines are designed keeping good governance practices for the benefit of your employees and your organization.


Vesting Period of Stocks

We are all aware that employees can get their shares if they put in a certain duration of continued service since the date of allocation. How many months / years for what grade and level must be defined in the ESOP framework?

 

Type of Stocks

The management must decide what stocks option plan will the organization offer to which employees. Types of Stock Plans generally preferred by organizations include Employee Stock Option Scheme (ESOS), Employee Stock Purchase Plan (ESPP), Restricted Stock Units (RSU), Stock Appreciation Rights (SARs), and Phantom Stocks.

 

Upfront Cost and Exercise Price of Stock

It is important that the Management decides whether it will give the Stock Options to the employees for free or at a price. Will the price be a certain percentage the market price or be defined based on the companies net worth? Will it be the same price to all employees, or will it vary as per their grade or band? If the employees do not have the funds to buy the stocks will they be funded by a third party for the same? How is the buyback price determined?

 

 

Origin Consultants helps you design an ESOP – Employee Stock Options Plan that is beneficial for Employees and the Organization.

 

INCENTIVES, BONUS & PERFORMANCE LINKED PAY

When designing a Performance-Linked Pay & Incentives System many factors must be taken into consideration. Factors such as the nature of business, type of technology, culture of the company and HR Strategies of the organisation. Thus, the Performance-Linked Pay & Incentives System must be custom-tailored for each organisation.


Origin Consultants believe that performance linked pay, if used in isolation, may have a very negligible impact in motivating employees for higher performance. One needs to create the perfect environment and appropriate conditions in the organisation to design and successfully implement Performance Linked Reward Systems.


There are several types of performance-linked pay & incentive schemes. Origin Consultants Compensation & Benefits Team generally custom design schemes that may be for Individual Employees, Teams, Sales Departments, Groups, to ultimately improve enterprise’s performance and profits.


Incentives Scheme for Support Staff & Sales Teams

Bonus Pay based on the Performance of the organisation

Group Incentive Scheme to reward the performance of Teams

Retention Bonuses to retain critical / top talent

Profit Sharing for Key Employees

Origin Consultants critically and carefully plan the performance-linked pay & incentive schemes keeping in mind the following aspects:


The parameters of performance must be determined in accordance with the objectives

Norms or benchmark values for each parameter must be clear.

The performance-reward relationship must be determined.

Fixing the weightages as per the relative importance of the selected parameters.

Designing the complete process and related formats.

Ascertaining the maximum payable incentive amount and payment period

Formulating an effective communication and review mechanism

Effective communication mechanisms, a performance driven culture, competitive spirit, training and development of employees, and a mix of non- monetary incentives along with an efficient performance management system must all be in place to support an effective Performance Linked Pay System.


Reach out to Origin Consultants Compensation & Benefits Practice today to understand the dynamics and benefits of a Performance Linked Pay & Incentives.

 

SALARY BANDS & GRADE STRUCTURES

Here is why Salary Bands & Grade Structures are an important component of effective compensation programs for any Organisation.

They ensure that the salary levels for your organization’s various job groups are competitive and internally equitable.

These structures explain the relationship between your company’s internal salary grades and the jobs that are in those grades.

They represent the Salary Ranges and the internal job value hierarchies within your organization, as well as the relative external job value in the market

They bring transparency in the organisation where employees can clearly see and compare salaries between themselves and employees in similar roles. Organisations can see which employees are being under paid or over-compensated in their roles.

They provide support in all the hiring, appraisals and promotions decision making. Also help organisations control their Salary expenses.

They give a rational explanation to companies on why and how the salaries of their employees are decided.

Origin Consultants are frequently approached by leading corporations to design and implement effective Salary Bands & Grade Structures for them.

 

We follow a rigorous step by step methodology in defining and structuring the Compensation Structure for our clients:

 

Study the Organization's Compensation Philosophy

This is an in-depth study of the company's beliefs regarding compensation so that there is consistency in its application regarding compensation practices. The company may choose to be a market leader or pay at par with the market or be the lowest payer in the market. This choice will influence how the company will attract and retain top talent.

 

Conducting Job Analysis

Our Consultants gather, document and analyse information about a job to understand the activities and responsibilities it includes. Also determine the job’s relative importance to other jobs, the skills and qualifications required for doing the job and the conditions under which the work is performed. This concludes in well written Job Descriptions for each job.

 

Group into Job Families

On completion of the accurate job descriptions, grouping of Jobs into Job Families based on Functions (administrative job family, technical job family, management job family and executive job family) or job families based on geographic locations or different divisions.

 

Ranking of Jobs Within Job Families

After the Job families are established, next step is to evaluate each job based on their levels in the organisation and responsibilities. Then rank the jobs to establish a hierarchy. Ranking is usually based on the value to the organization, years of work experience required or on the classification of the role. People in these positions are not being ranked, only the jobs get ranked.

 

Determining the Salary Grades

Once we establish the job hierarchy, we take each job group and classify them into a Salary Grade. If the client organization is excessively big with many jobs, the we end up with more Salary Grades.

 

Comparison of Salary

Our Research Teams find out how your jobs are being paid in comparison to those in similar roles, similar company types and in similar industry /markets to give you a clear idea about whether or not your employees are being fairly paid for their respective jobs.


Establishing Salary Bands

Next, we define the key values in the salary band – the minimum, midpoint, and maximum salary. The salary bands can and often do overlap.

 

Origin Consultants strongly advise Clients that after they finally have the Salary Grades & Bands Structure, they must frequently monitor the market to keep the structure current.

 

Explore our Compensation & Benefits Services to be ahead of your competition!