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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



Bettina Mühlböck

Chintana Siri Songkram

  • Compensation Objectives & Policies
  • Factors Affecting Wage Mix
  • Finnish Regulation
  • Salary & Incentives Structures
  • Benefits
  • Conclusion
compensation objectives
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
compensation objectives4
Compensation Objectives
  • Mesh employees’ future performance with organizational goals
  • Control the compensation budget
  • Attract new employees
  • Reduce unnecessary turnover
compensation policies
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
factors affecting the wage mix
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
factors affecting the wage mix7
Factors Affecting the Wage Mix
  • External Factors
  • Labor market condition
  • Area wage rates
  • Collective bargaining
  • cost of living
  • legal requirements
finnish regulations

Finnish Regulations

Equal rights law, child labor law, etc.

No legislated minimum wage

Paid vacation

Parents and family take-off


Over time salaries (138h/4 moth; 250/year)

Night- and shift work bonuses

base salaries
Base Salaries
  • (Assistant Facility Manager) : € 3,000
  • Facility Manager : € 4,500
  • Regional Manager : € 6,000
  • Functional Managers : € 7,500
  • CEO : € 10,000
profit sharing plan
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

weakness of profit sharing plan
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
profit sharing plan cont
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
stock option plan
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
stock option plan cont
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

  • 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.
benefits objectives
Benefits Objectives
  • Improve employee work satisfaction
  • Meet employee health and security requirements
  • Attract and motivate employees
  • Reduce turnover
  • Maintain a favorable competitive position
core benefits
Core Benefits
  • Health care
  • Day care
  • Cellular phone
  • Food services
  • Housing and moving expenses
additional benefits in finland
Additional Benefits in Finland
  • Company car
  • Free time activities
  • Discounts on goods and services purchased at the company’s store
additional benefits in russia and the baltics
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
  • 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