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Smart Ways to Compensate Employees

Smart Ways to Compensate Employees
Monetary benefits alone do not satisfy employees. You have to think about other ways to pay back your employees through non cash benefits to make them feel they belong. Motivation is a big factor for consideration when it comes to retaining your employees. The employees have to be compensated for what they do for an organization – hold on folks, besides the salary prerequisites, there are many other things which help in retaining them in the company and sustain their motivation. Direct Compensation: Employees expect fair wages commensurate with their skills, experience and job content. Wages should be ascertained keeping in mind the cost of living in the particular locality. These should be revised periodically to account for inflation so that the real wages do not go down over the time. Wages must have a system of yearly increments, which should be flexible enough to reward good performance. Legal Perspective: In India, the Minimum Wages Act, 1948 provides for fixation and enforcement of minimum wages in respect of scheduled employments. A tripartite Committee Viz., “The Committee on Fair Wage” was set up in 1948 to provide guidelines for wage structures in the country. Article 39 states that the State shall, in particular, direct its policy towards securing (a) that the citizen, men and women equally shall have the right to an adequate livelihood and (b) that there is equal pay for equal work for both men and women.  Fringe Benefits: These are also termed as indirect compensation that an organization provides to its employees which may include – insurance against accident, travel concessions, medical facilities, subsidized meals, uniforms, housing etc. The Finance Act, 2005 has introduced a new chapter VII-H, ‘Income-tax on Fringe Benefits’. The Chapter now brings to tax the fringe benefits collectively enjoyed by the employees and which cannot be attributed to individual employees. The Fringe Benefit Tax is to be borne by the Employer. Different methods of employee compensation Promotion: Employees expect to improve their position in the hierarchy over the time. This improvement in position is called promotion. It immensely helps an employee to feel important and useful to the firm. It enhances his/her status within and outside the organization. Through promotion, he/she looks forward to accomplishing more challenging tasks, including participation in the decision making process. Out of 440 million workers in India, 93% of the workers are in the unorganized sector. The contributions made by the unorganized sector to the national income, is very substantial as compared to that of the organized sector. It adds more than 60% to the national income while the contribution of the organized sector is almost half of that depending on the industry. In India, only about 8% of workers actually get the benefits available under various labor Acts. The rest 92% work in the unorganized sector, and either are not eligible for coverage. Types of Compensation Job Security: One main reason why people are reluctant to join small enterprises even at higher salaries is their ‘apprehension’ about ‘job security’. An enterprise that is able to dispel such apprehension benefits substantially in the long run. Working Conditions: One primary cause of dissatisfaction of workers is ‘the quality of their working life’ which includes Reasonable hours of workA work placeTea breaksProvisions for a room for recreation, lunch etc.Availability of safety equipment and first aid facilities, andWater cooler, lavatory etc. These things may not improve productivity, but will help in preventing job dissatisfaction among workers. The management must also ensure that cordiality and friendliness is maintained between the workers. An environment should be created in which the superiors and senior employees and workers develop mutual respect for each other. The...
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What is Learning Organization

What is Learning Organization
What are Learning Organizations? Need for Learning Organizations: The ever evolving, dynamic business environment and the complex relationship among various countries in the political and business arena necessitate the need for a learning organization. This becomes essential for organizations to be flexible and be able to respond to change which is the only enduring source of competitive strength. What is a learning organization? A learning organization is the term given to a company that facilitates the learning of its members and continuously transforms itself. Learning organizations develop as a result of the pressures facing modern organizations and enables them to remain competitive in the business environment. Learning is used to reach their goals and avoid repeating mistakes. Employees learn to link their personal goals to organizational goals and link rewards to key measures of performance. The managers learn to design systems and procedures to motivate learning process and to encourage employees to feel free to share information and take risks. Characteristics of a learning organization: It nurtures a climate of trust in the organization and people are encouraged to learn and develop their #knowledge and skill sets. It inspires human resources in the immediate external environment such as customers, suppliers, creditors etc., to learn as and when possible. The whole business policy revolves around #HRD strategy. The organization subjects itself to continuous transformation in which learning and working run hand-in-hand. Learning Based Techniques: Organizational learning concept is the latest OD (#Organizational Development) technique. #Ernst & Young, the largest #accounting firm has set the following procedures for learning purpose. Managers play a vital role in this transformational process of learning. They are responsible for choosing employees who are willing to and capable of learning, and must ensure that the participants in the program are trainable. They must get the support of #trainees and others. Trainees must be appraised about the benefits that will result from training and the managers also should enjoy the support of supervisors, #co-workers and their sub-ordinates. This is very essential to facilitate learning process, to ensure availing of honor and respect of peers and sub-ordinates. The opinion of trainees, supervisors, co-workers and sub-ordinates must be obtained on the content of training, the location and the time and duration of the training. Managers also play a key role in assisting others in goal-setting and meeting those goals. Goal setting is necessary to improve their performance and direct their attention to specific #behavior that needs to be changed. Managers may assist the sub-ordinates and peers to identify tools and resources for acquiring knowledge. Managers must also focus on providing performance feedback as it serves two objectives; it provides information on performance and serves as a motivating tool. Managers should urge their employees to analyze their performance, identify weaknesses and take action to overcome weaknesses. Managers may assist the employee to transfer the learned skills/knowledge to work. It will be a wiser move to design #training methods in such a way as to enable the trainees to practice skills on their jobs between training sessions. DOWNLOAD THE PDF VERSION...
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Market Assessment

Market Assessment
Market Assessment Framework Industries whether small or large function in an environment of controllable and uncontrollable variables. A small enterprise has to constantly interact with the market in which it has to operate and is also exposed to the risk of other environmental factors. Its marketing efforts must stay fine-tuned to suit the requirements of the market in general and the needs and wants of the customers in particular. They have to develop an exceptional market orientation in light of Intensified industrial activity Increased competition and Increased discerning capacity of customers. Need for Market Assessment: The marketing orientation outlook will drive an entrepreneur to seek answers to many questions relating to market segments, marketing inputs, product quality, price structure, technology of manufacture etc., before setting up the venture. This exercise will facilitate him/her to move ahead with greater degree of confidence and tackle the problems that may arise during the later stages, in a professional manner. Market Composition: Analysis of market demand, the competitive situation and trade practices are vital for a sound market assessment. The market is composed of a large variety of customers who differ in their likes and dislikes, options, preferences, education, employment, income and status. The location of customers also differ, some may be located nearer and others in distant places. Here are 30 Great Marketing Ideas to Increase Sales for Your Small Business: Factors that help a firm to decide the target segment which is of special interest: Resource availability Scale of operation and its Impact on profitability The identification of the customer groups aids in making an estimate of the market demand for the product chosen. Look for Competitive Situation: Once the market demand has been estimated, one has to look for the competitive situation prevailing in the market as a firm cannot just pursue its own policies without considering what the competitors are up to. The nature and extent of competition will place several constraints on the marketing policies of a firm and a thorough analysis of the same will help in pricing and also in identifying the gaps and opportunities that will be available for exploitation. Opportunity Evaluation: An intelligent and experienced entrepreneur would weigh an opportunity as follows: How large is the gap between demand and supply in the market and what is the nature of competition in the market for the product? Whether the product is covered under any of the promotional policies of the government, so that, either entry into business or competition in the market is facilitated. Whether there is any special product/service specific problem that he/she will face and can avail of any part of promotional policies, to soften the impact of these problems. Based on such product-market-policy, policy-product-market type of analysis, the entrepreneur will finally conclude if the opportunity is worth investing...
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Just in Time Manufacturing

Just in Time Manufacturing
Just in Time Manufacturing Concept JIT Philosophy: With the progression in product-process technologies and the hybrid manufacturing systems, the Japanese have been perfecting a manufacturing system called ‘Just in Time’ or ‘JIT’. This JIT operating system is nothing but a production strategy that strives to improve business return on investment by reducing in-process inventory and associated carrying costs. The JIT purchasing system has emphasis on timing to supply materials just in time for use on the factory floor. Equally important emphasis is given to close and long term relationship with a few suppliers. The suppliers in JIT manufacturing are geographically closely located. Specifications: Producing and delivering finished goods ‘just in time’ to be sold Partly finished goods ‘just in time’ to be assembled into finished goods Parts ‘just in time’ to go into partly finished goods Materials ‘just in time’ to be made into parts. Loose specifications instead of rigid product specifications are used which leads to best use of supplier specialization and expertise for low cost and better quality. Frequent deliveries (daily deliveries) of small lots of exact quantities required are supplied directly to the shop floor avoiding large inventories, paper work and double inspection. The JIT system underlines the mutual confidence between buyer and supplier and long term relationship. This leads to investment by the supplier for the benefit of the buyer in terms of plant and equipment for improvement of quality, reduction of cost and shortening manufacturing lead times. Where does the responsibility lie? ‘The responsibility for the quality rests with the manufacturer of the part’ is the principle behind this Japanese practice. The primary responsibility for quality is transferred from quality control department to the production department. The quality control is considered a line function rather than staff function. The processes are designed to have less specialization on the part of workers. The physical layout is arranged in such a way that workers can operate two or three machines effectively and thereby become multifunctional. Good Quality First Time Every Time: Workers are organized in small closely linked groups thereby building team work. The production for each stage is planned in small lot sizes just meeting the needs of the subsequent stage. The system is such that even if one item produced is substandard, it would affect subsequent processes causing shortages and exposing the process or worker who has produced substandard item. This acts as a great motivator to produce good quality first time, every time. This also heightens the awareness among the workers about the inter dependence of processes. Taiichi Ohno, Father of the Toyota Production System saw this as an attribute rather than a problem. He used an analogy of lowering the water level in a river to expose the rocks to explain how reducing inventory showed where production flow was disrupted. Once bottle necks were exposed, they could be rectified or removed. Since one of the main barriers was rework, lowering inventory shoved each shop to improve its own quality. Just-in-time is a means to improving performance of the system, not an end. The result of the Japanese manufacturing system is quite pervasive in the areas of: Reduction in inventory Reduction in scrap Reduction in work Reduction in indirect costs Reduction in spare Reduction in administrative costs Increase in motivation of workers Increase in quality Better response to customers Better system flexibility and quicker response. What is kanban? Kanban is Japanese for “visual signal” or “card.” Toyota line-workers used a Kanban (i.e., an actual card) to signal steps in their manufacturing process. The system’s highly visual nature allowed teams to communicate more easily on what work needed to be done and when. It...
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Sole Proprietorship

Sole Proprietorship
Sole Proprietorship – Features and Advantages Sole Proprietorship is a business owned and controlled by only one person. The proprietor who sows, reaps and harvests the output of his labor owns all the assets in his firm. This form of business organization is one of the most popular forms in India and the reason being the advantages it offers. Here, business can be started simply after obtaining necessary manufacturing license and permit. Setting up Process: Setting up a sole proprietorship entity is trouble-free as compared to other form of companies. Unlike Limited Liability Partnership (LLP) or any other private or public companies; in sole proprietorship you do not need to file an application to ROC- Registrar of Companies. You need to choose a name for your business, open a bank account and take license for varied services including Service Tax, VAT, IEC, Shops & Establishment license, PAN, Importer Exporter Code, ESI, Professional Tax, Central Excise Duty, CST Registration, Employee Provident Fund Registration etc. After acquiring the respective licenses one can commence with his her sole proprietorship firm in India. Some important licenses you may need for starting a sole proprietorship firm in India: PAN CARD Permanent Account Number (PAN) is a ten-digit alphanumeric number, issued in the form of a laminated card, by the Income Tax Department. It is mandatory to quote PAN on return of income, all correspondence with any income tax authority. A typical PAN is AABPS1205E. A complete overview of pancard  can be seen at – http://www.incometaxindia.gov.in/pan/overview.asp New PAN CARD application – https://tin.tin.nsdl.com/pan/ TAN CARD Tax Deduction Account Number (TAN) is an alphanumeric number issued to individuals who are required to deduct tax on payments made by them under the Indian Income Tax Act, 1961. The Tax Deducted at Source on payments made by assessees has to be deposited under the following number to enable the assessees who have received the payments to claim the tax deducted in their income tax return. So TAN is the abbreviation for Tax deduction and collection Account Number. Application for tan card – https://tin.tin.nsdl.com/tan/ SERVICE TAX REGISTRATION Service tax has to be paid to the Government of India by the service provider who collects the same form his customers. As on 1st May, 2006,   95 services are identified as taxable services in India.  Section 64 of the Finance Act, 1994, extends the levy of service tax to the whole of India, except the State of Jammu & Kashmir. The current rate is 12.36 % on the gross value of the service. Service tax can be paid online – https://www.aces.gov.in/ VAT AND CST VAT (Value Added Tax) is a form of indirect tax imposed only on goods sold within a particular state, which essentially means that the buyer and the seller exist in the same state. Only when tangible goods and products are sold, VAT can be imposed. VAT (Value Added Tax) is governed by respective state Acts. Every state has a separate and distinct VAT act reserved for their state. CST (Central Sales Tax) is a form of indirect tax imposed only on goods sold from one state to another state, which particularly takes into account that the buyer and the seller exist in two different states. CST (Central Sales Tax) is governed by Central Sales Tax Act, 1956. This tax is governed by a single central act, though the chargeability is state specific. Registration for VAT AND CST IN Tamil Nadu – http://www.tnvat.gov.in/English/NewDealerRegist.aspx THE BUSINESS VIABILITY CHECKLIST FOR ENTREPRENEURS IMPORT EXPORT CODE: DGFT – Directorate General of Foreign Trade runs various schemes for trade promotion and facilitation. Using this facility you may file, prepare and track online application in...
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