Free Essay

Compensation System

In: Business and Management

Submitted By akram701
Words 3882
Pages 16
IndexContents Page #01. Letter of Transmittal------------------------------------------------------------0202. Acknowledgment-------------------------------------------------------------------0303. Executive Summary---------------------------------------------------------------0404. Introduction------------------------------------------------------------------------0505. Methodology-----------------------------------------------------------------------0506. Limitations of the study-------------------------------------------------------0507. Objective--------------------------------------------------------------------------- 0608. Overview of Long Beach Hotel-----------------------------------------------------0709. Features & Benefits of Long beach hotel ---------------------------------------0710. Vision-----------------------------------------------------------------------------------0811. Mission---------------------------------------------------------------------------------0812. Corporate Objective ----------------------------------------------------------------0813. Organizational Structure--------------------------------------------------------------0914. COMPENSATION FOR TOP MID AND OPERATING LEVEL-----------------1015. Compensation---------------------------------------------------------------------------1516 Employee Benefit------------------------------------------------------------------------1617. COMPENSATION DIMENSION----------------------------------------------18 * Leave & Holiday pay------------------------------------------18 * Disability income continuation----------------------------19 * Health and accident protection----------------------------20 * Income equivalent payments--------------------------------21 * Payment for Time Worked----------------------------------2218. Non-Financial compensation------------------------------------------------------22 * Workplace Flexibility-----------------------------------------2319. Compensation Strategy:------------------------------------------------------------2520. Grade Structure ----------------------------------------------------------------------2621. JOB ANALYSIS--------------------------------------------------------3022. Job Specification-----------------------------------------------------------------------3223.CONCLUSION ---------------------------------------------------------------------- 34 |

Letter of Transmittal

1ST December, 2010 To
Md. Monzoor Morshed
Independent University Bangladesh
Baridhara, Dhaka-1212 Subject: Submission of report on Compensation system of Long beach hotel Ltd.

Dear Sir,
It is an honor and great pleasure for us to present our Compensation system report on Long beach hotel Ltd. During threw process of constricting our assignment on Long beach hotel Ltd., We had the chance of experiencing and rediscovering our potential. This Compensation system gave us an opportunity to apply our theoretical expertise, sharpies our views ideas and communication skills and bride them with the real world of practical experience, which will be good start for our future professional career.
We hope you will find the term paper presented in an appropriate manner. We deeply appreciate your cooperation.
Thanking you and looking forward to receive your cordial approval of your submission.

Thanking You…………

School of business
Independent University, Bangladesh


The successfully accomplishment of this assignment is the outcome of contribution and involvement of a number of people, especially those who took time share their thoughtful guidance and suggestion to improve the assignment .At the beginning we would like to pay our gratitude to the almighty for giving us ability to work hard under pressure.

We have deepest gratitude to our respected course instructor Md. Monzoor Morshed. We are thankful to HIM for his continuous support and supervision, suggestion, providing us with valuable information that was very much need for the completion of this compensation policy. We also thankful to the employees of Long beach hotel Ltd, who gives us sufficient information about the company when we demanded to them.

Finally, our sincere gratitude goes to our classmates who helped us whenever we needed.

Executive Summary

The term report titled as “Compensation system” is submitted in partial requirement for the fulfillment of the course HRM 370 of BBA Program. The primary goal of this report is to provide the students with business exposure & an opportunity to apply HR plan and theoretical knowledge in real life. Through this program a good balance between theory and practice is gained.
The report is prepared based on the analyzing the hypothetical information of Long beach hotel Ltd. The term compensation analysis is defined as a tool or technique, which is used to investigate the company’s position. It measures all the compensation planning, how to develop compensation strategy, compensation component, compensation dimensions, non-compensation dimensions.

Although this report was carried out within a short span of time, but we have tried our best to provide the best accurate and true information regarding the report and its relevant information’s without which the report is not considered to be completed.
The report is basically divided into six parts based on different parts of the report. The six different parts of the report are Introduction, organizational overview, organizational structure, compensation component, compensation dimensions, non-compensation dimensions and compensation strategy.


This assignment we prepared as an obligation of the course. For this assignment topic we selected Long Beach Hotel Ltd. To do this assignment we take different kind of compensation and strategies. This is leverage base business. For that there fixed cost is high. Their main competitor is Seagull Hotel which also a five star hotel and the market leader of cox’ bazar. For that they follow a good compensation policy.


To find out the answer of these topics we selected quality method. From the base of these topics we designed the questionnaires for the director of Long Beach Hotel Ltd.
It is important to design questions very carefully. A poorly designed questionnaire renders results meaningless. There are many factors to consider. Like Make items clear, Avoid double-barreled questions, Respondent must be competent to, Questions should be relevant.

Limitations of the study

To completed this assignment we have to take interview, data collection, data analysis, data processing and other actives. Such an assignment it is very difficult to complete our work with full satisfaction. But we do our best effort for this assignment.

The specific objectives of this report are:

* To provide Company Overview. * To reveal Company Structure. * To provide compensation component. * To provide compensation and non-compensation dimensions. * To find out compensation strategy

Overview of Long Beach Hotel

Long beach hotel is one of the five star hotels in Cox’s bazaar. It takes 5 years to complete. They start their business in 19 April 2010. It was there soft opening with 108 rooms and 123 employees. The chairmen of Long beach hotel is Shariful Alam. Long beach hotel's guests are privileged to enjoy a host of lavish services and facilities apart from just great lodging, including personal butler services and private VIP Lounge. For dining purposes, the hotel harbors the 5 star restaurants and other facilities.

Features of Long beach hotel

* 108 Room including Presidential Suite Honeymoon Suite and Premier Suite * All the Rooms and Suites with individually remote controlled Air- conditioning system * Connecting Room available * Non-Smoking rooms are available * Color Television with Satellite channels are provided in all Rooms and Suites * IDD and NWD facility with computerized billing system Mini Fridge * Multi-Channel Audio system * Electronic Safe * Hot & Cold Water * Complimentary Airport Pick up and Drop * 24 Hours Front Desk fully computerized * 24 Hours Room Service * 18 Hour Coffee Shop * Restaurant offers Continental Indian Arabic Far Eastern and Bangladeshi sumptuous dishes including Imported eat items * Business Center * Travel Desk * Tourist Information * Rent a Car * Banquet & Conference facilities up to10- 1000 pox Theater style. * Standby Generator and most modern lifts * All Major Credit Cards are acceptable.


Their vision is to remain as the benchmark in the hotel business by good quality service.

Their mission is to increase their market share in the next five years. They shall remain socially committed ethical Company

Corporate Objective

Long beach hotel mission is to add value to life, to outperform the peers in terms of longevity, customer service, revenue growth, and earnings and cash generation. It will be the employer of choice for all existing and future employer.

Organizational Structure

Chain of Order




Asst. manager Asst. manager

Deputy Manager channel Deputy Manager channel Supervisor




Compensation for top mid and operating level

The compensation of Long beach hotel Ltd provide according to the position of the different department. The compensation package of the Long beach hotel Ltd. designed according to the structure shown below-

Grade | Basic Salary | Gross Salary | A | 110000 | 130000 | B | 35000 | 47000 | C | 20000 | 31000 | D | 13000 | 22200 | E | 11000 | 17900 | F | 6500 | 10500 |

Grade ‘A’

* Basic Salary 110000 * House allowance 5000 * Medical Allowance 3000 * Costing of car 3000 * Mobile bill 3000 * Food 6000
Gross Salary (BDT) 130000

Grade ‘B’

* Basic Salary 35000 * House allowance 2500 * Medical Allowance 1000 * Costing of car 2000 * Mobile bill 1500 * Food 5000 Gross Salary (BDT) 47000

Grade ‘C’

* Basic Salary 20000 * House allowance 2500 * Medical Allowance 1000 * Costing of car 1000 * Mobile bill 1500 * Food 5000 Gross Salary (BDT) 31000

Grade ‘D’

* Basic Salary 13000 * House allowance 2500 * Medical Allowance 700 * Costing of car 1000 * Food 5000 Gross Salary (BDT) 22200

Grade ‘E’

* Basic Salary 11000 * House allowance 2200 * Medical Allowance 700 * Costing of car 500 * Food 3500 Gross Salary (BDT) 17900
Grade ‘F’

* Basic Salary 6000 * House allowance 1500 * Medical Allowance 700 * Food 2300 Gross Salary (BDT) 10500


Long beach hotel Ltd is concentrating on competitive compensation package for its all level of employees to ensure to retain and motivates its employees. To gain competitive advantage it has conducted salary survey. It is highly encourage performing its employees the best because Long beach hotel Ltd will maintain performance based compensation system. On the other hand, promotion and salary increment will obviously depends on the performance of the employee in a fiscal year. Other allowances will be provided based on the organizational hierarchy. The compensation packages of the company is discussing below:

Basic Salary
Basic Salary is the salary, which is paid by the company to the employees for work performed. That means Basic salary is the Salary will provide based on the individual skills and knowledge and the salary sheet is given in the appendix.

Variable pay

Variable is based on the performance of the person in that role, for example, for how well that person achieved his or her goals for the year. Incentive plans, for example, bonus plans are a form of variable pay of this organization.

Employee Benefit

Festival Bonus
Employees are given two annual bonuses in the two Eid Festival. Same as basic salary bonus on 1st Eid Festivals and 70% of 2nd Eid Festivals, which will be settled on the basis of their basic salary.

An increment is defined as the increase in the salary according to the performance of the employees. Long beach hotel Ltd provides increment to the salary of the employees according to the satisfactory performance.

House Rent
All employees of Long beach hotel provided house 100% facility. But there is different for different grade of employees. A and B grade get the highest house facility.

Medical Allowances
There is a medical allowance for every employee. Grade B and C get 1000 taka, And D, E and F get 700 taka of medical allowances.

Utility Bills
This Company pays a limited income of mobile bill for different levels of employees, starting from Chairman to managers.

Discount Facility

A,B and C grade employees family member get 20% discount if they stay in this hotel room. But there is no discount for other lower level employee.

Transportation Facilities
Employees whose basic salary is equal to or more than BDT 26,000 will get car facilities and employees whose salary ranges from BDT 10,000 to BDT 25,000 will get company staff bus facilities.

The entire employee provided three time food facility. But there is a different in quality in different grade of employee.

All most all employees will provide dress but it only their duty base clothing.

Compensation dimension

Leave & Holiday pay

Religious Holiday
Agencies should make reasonable accommodation for the religious holiday needs of employees, unless accommodation will result in undue hardship to the agencies. Also there is break time for Muslim employees of Friday and other weekdays for prayer
For vacation, in a year every employee are paid for one week but employee should have to inform within two week before vacations.

Time of to vote
Long Beach Ltd provide one day for vote. But if the employee’s home is very far distance then top level will provide more than one days.

Uncertified Sick Leave
Privileged is 3 (three) days in a calendar year but not more than 2 (two) consecutive days for illness.

Certified Sick Leave
For certified sick leave top level manager will decided about the term and condition.

Funeral Leave
Employees are paid for up to five days to attend the funeral of a close relative, such as a spouse, children, parents, grandparents, siblings and corresponding in-laws.

Marriage leave
For marriage leave employee get 9 days but for top level manager marriage leave will be more than 9 days.

Paternity leave
Long Beach Ltd provide paternity leave of 2 days before expected delivery and 8 days after delivery (total 10 days) full paid.

Illness in family leave
For illness in family every employee gets total 4 days in a calendar year.

Disability income continuation

Short-term disability

If the employee eligible, this benefit provides him with 55 percent of his salary and this continue maximum of 4 months.

Supplemental Disability

For supplemental disability, this benefit replaces up to 70 percent of his salary and this income continue maximum of 8 months.

Long-term disability
For long term disability top level manager decide about compensation.

Retirement plans
Long Beach Ltd provides retirement compensation in the term of age of job and level of employee.

Accidental death
Long Beach Ltd provides accidental compensation. This will in basis of the employee.

Health and accident protection

Medical Allowances
There is a medical allowance for every employee. Grade B and C get 1000 taka, And D, E and F get 700 taka of medical allowances.

Major medical

There is a major medical allowance for every employee. Bit it provide in basis of term and condition.


This compensation only provide for top level of employee. But lower level employee get some amount of money.

Medical savings accounts

As they providing some medical allowances every month, for that any employee can save their money in hotel saving accounts.

Payment for Time Worked

Non-exempt employees are eligible to receive overtime pay if they work more than 40 hours in a given week. Holiday, vacation, and sick time are not included in hours used to determine overtime eligibility. Overtime pay equals 1.5 times and employee‘s regular hourly rate. All overtime must be approved the manager in advance.

Shift differentials Employees required working shifts outside the standard Saturday through Thursday daytime work hours.

* Excluding holidays, shift differentials will run at 10 percent of base pay for both hourly and salaried employees. * Shift durations at 8-hour increments regardless of start time. * Additional compensation for working night shift - 10 p.m. – 6 a.m., Employees receive an extra 15% of their base pay for all hours worked during that time. * Eligibility for shift differentials varies between hourly and salaried employees, with hourly employees far more likely to receive a shift differential. * The calculation of paid time-off for employees working 2nd and/or 3rd shifts will be done at the same rate as employees on regular work hours.

Non-Financial compensation

The job
As a five star hotel it always attractive for a person who screeching for job. They offer a good level of job.

Job Environment
As a new hotel, every employee is new in this hotel but not in this business. Because most of the employees are experience and well trained. So they have good environment in job. There is other factor of job environment given below –

Dress Code Policy
Long Beach Ltd properly uses the dress code or uniform policy. For every department there will be fixed dress code system, which will help to identify the individual departmental workers. It is one kind of non-financial compensation.

Dress code (Uniform) policy is necessary in order to:
• Convey a professional image
• Have health and safely
• Give the identity

1. Sound Policies
From top level to lower level have to follow the sound policies. That means every employee cannot make shout to other junior level employee.

2. Competent Employees
Employee Competent may be good or sometime bad for the company.

3. Congenial coworkers
Congenial co-workers are very important in a company. For that they are very careful about stuffing of employee.

Workplace Flexibility

Long Beach Ltd maintains flextime workplace, like Peak-Hour Flextime, Adjusted Lunch Period, and Core Hours.

Job sharing
Long Beach Ltd has the policy of job haring but it should be within the same department.

Workplace Security
Workplace security policies generally address the employer‘s procedures for safeguarding its employees and property against harm such as theft, sabotage, vandalism and workplace violence. To implement an effective security plan, employers should begin by evaluating their security needs.
Long Beach Ltd is committed to maintain a safe and secure workplace.

Long Beach Ltd properly provides the car parking policy for both their employees. Employees will wish to use their own transport to travel to work, because of mobility difficulties or for convenience. However Long Beach Ltd provide car parking system for employees’ cars to fulfill their work duties.

Compensation Strategy:

1) Willingness to spend 2) quality of leadership 3) employee job analysis and job description

Job duties strategy
Long Beach Ltd pays its workers and employees according to their job duties. Basically it pays its labors according to their service capacity as well as based on difficulties.

Management basis strategy
This company believes in team work. Its managerial board always influence in the compensation strategy. Their employees have to work as a team and support co-operative efforts.
Labor market strategy
This company designs its compensation plan with successfully compete within the established labor market. They pay good salary to its labors which are equivalent to other companies.

Incentives strategy

To enhance employees Lifestyle Company provides festival bonus, special bonus, and medical allowance and so on.

Grade Structure of Long beach hotel Ltd and the number of employees in each grade

Grade ‘A’ Position | Number of Employees | Managing Director | 01 |

Grade ‘B’ Positions | Number of Employees | Accounts Manager | 01 | Store & Purchase Manager | 01 | General Manager | 01 | Finance Manager | 01 | Food & Beverage manager | 01 | Executive House Keeper | 01 | Head Chef | 01 | Restaurant & banquet Manager | 01 | Total | 08 |

Grade ‘C’ Positions | Department | Number of Employees | Asst. Front office Manager | Management | 01 | Asst. Restaurant & banquet Manager | Management | 01 | Asst. Finance Officer | Accounting & Finance | 01 | IT in Charge | Management | 01 | Maintenance officer | Management | 01 | Asst. Chef | Production | 01 | Account officer | Accounting & Finance | 02 | Asst. Manager( Sales & Marketing) | Sales & Marketing | 01 | Total | | 09 |

Grade ‘D’

Positions | Department | Number of Employees | Front Office Supervisor | Management | 01 | Restaurant Captain | Production | 04 | House Keeping Supervisor | Maintenance | 05 | Security in Charge | Security | 01 | Sales & Marketing Executive | Sales & Marketing | 02 | Chef D’ Party(Supervisor) | Production | 02 | Laundry in Charge | Maintenance | 01 | Total | | 16 |

Group ‘E’

Positions | Department | Number of Employees | Receptionist | Management | 07 | Senior Waiter | Service | 06 | Asst. Cook | Production | 04 | Party n’ Bakery man | Production | 02 | Store Keeper | Maintenance | 02 | Asst. Supervisor | Maintenance | 01 | Total | | 22 |

Grade ‘F’ Positions | Department | Number of Employees | Waiter | Service | 15 | Driver | Service | 03 | Electrician | Service | 04 | Room Attendance | Service | 15 | Public area Attendance | Service | 12 | Laundry Operator | Service | 02 | Store Helper | Service | 02 | Security Guard | Security | 11 | Plumber | Service | 02 | Gardener | Service | 01 | Total | | 67 |

Job analysis

Sample of job analysis Long beach hotel Ltd

(Accounts Manager)

Position: Manager of Finance and Accounts
Reports to: Managing director
Number of Employees: 1
Job Grade: B
Job duration: 9 am to 5 pm
Job Location: Long beach hotel

Job Summary

The person who are holding the position have to be very much careful about checking and tracking financial data, sales, revenue, profit, loss, and other financial information. He or she will reports to the deputy managing director, and financial officer. They are responsible for the entire accounts and finance department. Any kind of discrepancies in the financial statements will affect the company because at the heart of any company is profit.

Job Description * Prepare budget and submit to the managing director for approval * The person will periodically check the financial statements of the company and based on that a report will be presented to the managing director * The manager will look for discrepancies in the accounting reports and will resolve those. * He/ she has to be reliable for evaluating the company data as it relates to the financial performance * Have to take corporate initiatives related to financial and also check for the discrepancies in the accounts reports * Have to make an analysis of current and previous openings and closings, and viability of new distribution channels * Have to support the production via performance review, tracking and financial analysis. * Have to communicate directly with other Heads of the company so that everyone will know about their standings in terms of financial reports. * Must develop business strategies via statistical modeling, including financial models of Paint industry and generate analysis to support targeted sales efforts * Have to create and compile concise financial or accounting reports worksheets/ presentations that communicate findings effectively * Have to manage collection and formulation of sales data and prepare presentations for senior management. * Must conduct in the budgetary process and monitory of sales activity * Have to coordinate with other inside and outside resources for the accumulation of data needed to populate the sales oriented data base * Must perform historical, current and competitive production tracking

Job Specification


* Must have an MBA Degree or above in the area of Finance and Accounting

* Higher degree in financing manufacturing company will be very preferential


* Have to have an earlier experience of at least 4 years of functioning in this relative discipline


* Have to have widespread knowledge with MS Office applications obligatory, together with Excel, Word, Access and PowerPoint

* They should update their knowledge with the most contemporary skills

* Have to have well-built organizational and administrative skillfulness in this area

* Have to have capability to manage numerous assignments concurrently with attention to precedence and goal

* Must have the ability to communicate effectively and delicately with personnel on all rank so that they can get the respective department’s record easily

Job Environment

The person will be working at the Long beach hotel. Here they will be providing the standard office environment.

Other Incentives

* Two times bonus for festival (100% of the basic salary) * Festival leave (14 days) * General leave (1 day per week) * Sick leave (14 days per year) * Casual leave (10 days) * Earned leave * Other benefits.

We are doing our project on the compensation system of Long Beach Hotel ltd. In our paper we tried to find efficient information of Long Beach Hotel. By doing this project our concept of compensation which we got from class has been used widely and which became much clearer than before. This paper has helped us to understand issues related to employee compensation, better and help us to implement in an efficient way. This paper has also helped us to expand our vision. After finishing our paper, we as business students can now relate our works in HRM.



1) Could you please tell us about your company Background? 2) Could you tell us about your organization structure? 3) How you make Compensation Strategy for your organization? 4) What type of compensation component you provide? 5) What is your organizations compensation dimension? 6) What is your organizations non-compensation dimension? 7) Could you please tell us about the job analysis process of Mauna Jute Mill? 8) Could you please tell us about your job design? 9) Does your organization have any Base pay structure? 10) Who is responsible for developing, administering and distributing compensation of your the organization? 11) What short term and long term incentives are provided by your organization? 12) Do you have any Executive compensation plan? 13) Do they have any benefit and service plan? What are those 14) Does your organization satisfied with current compensation system or you need some improvement in future? 15) How you motivate your employee? 16) What type of facilities you provide for your employee?

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