SBIT Summer Project Report Template

Role of
Incentive Scheme in
Siemens
Summer Training Project Report

Submitted in partial fulfillment of the requirements
For the Degree of
Bachelor of Business Administration (BBA)
Date of Submission: .
Submitted by: Shelja Sapra
Class: BBA (4th Semester)
Roll No: BBA/11/912
Email: sheljasapra@gmail.com
Role of Incentive Scheme in Siemens
Faculty Comments
Name of Faculty
: Ms. Vibha Sharma
Signature of Faculty
Date of Presentation
Date of Checking
Comments
:__________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________
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Acknowledgements
I wish to extend my profound gratitude to Mr. Vinod Dhar, Head of the Management Department, Shri
Balwant Institute of Technology for providing all the whole hearted co-operation and inspiration which
made me to complete my project.
I also extend my gratitude to my trainer Mrs. Sushmita Mishra Sahoo for her valuable suggestions time
to time.
I am indebted for providing this opportunity at Siemens Limited to undergo my project at their esteemed
organization.
I am grateful to the respondents for their kind support without whom, this study work would not have
been possible.
I would like to place my profound thanks to Ms. Vibha Sharma for their valuable suggestions and
counseling during the execution of the work.
Shelja Sapra
BBA/11/912
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TABLE OF CONTENTS
1
INTRODUCTION..................................................................................................................................
SIGNIFICANCE OF THE STUDY.......................................................................................................3
1.2
REVIEW OF EXISTING LITERATURE...............................................................................................4
1.3
CONCEPTUALIZATION....................................................................................................................6
1.4
FOCUS OF THE PROBLEM...............................................................................................................8
1.5
OBJECTIVES OF THE STUDY...........................................................................................................9
1.6
HYPOTHESES...............................................................................................................................10
1.1
RESEARCH METHODOLOGY........................................................................................................11
RESEARCH DESIGN......................................................................................................................11
2.2
UNIVERSE & SURVEY POPULATION.............................................................................................11
2.3
SAMPLE.......................................................................................................................................11
2.4
COLLECTION OF DATA.................................................................................................................11
2.5
ANALYSIS PATTERN.....................................................................................................................12
2.1
ORGANIZATIONAL PROFILE........................................................................................................14
3.1
BUSINESS OF THE ORGANIZATION...............................................................................................20
3.2
MANAGEMENT PROCEDURES......................................................................................................23
3.3
PRODUCT & SERVICES OFFERED BY THE ORGANIZATION...........................................................24
<ABOUT CONCEPT OF THE PROJECT>.....................................................................................30
DATA ANALYSIS & INTERPRETATION........................................................................................44

5.1
QUESTIONNAIRE ANALYSIS.........................................................................................................44
5.2
SWOT ANALYSIS........................................................................................................................56
LIMITATIONS OF THE STUDY.......................................................................................................57
CONCLUSION.....................................................................................................................................58
SUGGESTIONS & RECOMMENDATIONS....................................................................................59
BIBLIOGRAPHY.................................................................................................................................60
10
ANNEXURE.............................................................................................................................................
Introduction
Human Resource Management (HRM) is the function within an organization that focuses on recruitment
of management of and providing direction for the people who work in the organization. Human Resource
Management can also be performed by line managers.
Human Resource Management is the organizational function that deals with issues related to people such
as compensation, incentives, hiring, performance management, organization development, safety,
wellness, benefits, employee motivation, communication, administration, and training.
There are number of challenges in the Indian Industry which require the serious attention of HR
managers to find the right candidate and build a conducive work environment which will be beneficial
for the employees, as well as the organization. The industry is already under stress on account of
persistent problems such as attrition, confidentiality, and loyalty. Other problems are managing people,
motivation to adopt new technology changes, recruitment and training, performance management,
development, and compensation management. With these challenges, it is timely for organizations to
rethink the ways they manage their people.
Management is a key to achieve result and every company is having an H.R. DEPARTMENT to look
after the various functions relating to human resources of the company. Compensation of employees for
their services is an important responsibility of HRM. In Indian context, during the last two or three
decades, attention has been given by the Industries as well as Government towards adequate
compensation for employees. As a consequence, there is a growing awareness among the employees
about whether the compensation is effective or not.
Incentive on the other hand is an integral part of compensation which aims to improve the performance
of the employee on the current job as well as motivate them for the intended job.
Compensation is a process of paying financial and non-financial regards to employees for their services
rendered to the organization. It attempts to reward the employees for their contribution and to retain
them.
Compensation and incentive together focus on satisfying employee needs and boosting their
motivational levels so that, their performance become more productive.
No enterprise can be guaranteed a permanent place in this highly competitive society and no manager can
last long until he keeps his business competitive. To be competitive, the enterprise must produce huge
amount of highly qualitative goods and must provide excellent service for which a group of highly
motivated and committed workforce is essentially required. If the human resource of the organization
will be treated with much care and concern they will become productive assets where as a slighter
negligence will make them not only unproductive resources but also counterproductive liabilities by
inviting the industrial maladies like labour unrest, loss of production, high rate of labour turnover,
absenteeism, accident, indiscipline etc. Therefore the real solution for improving the productivity and
making the enterprise competitive lies in the proper motivation of the workers. As the average Indian
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worker is financially poor, financial incentives which link higher production can play an important role in
promoting such motivation. Moreover the managers must realize that the financial motive for the work is
extremely important more so than the non financial motives and the most effective way of harnessing
these motives is by the use of payment by result not simply by paying higher wages.
In India a survey conducted by National Productivity Council revealed that about 70% of the reporting
companies had wage incentive plans. On an average, the scheme seemed to have achieved increase in
output which ranged between 30% and 50% and increase in productivity was between 25% and 45%.
In a rapidly changing society, employee motivation is not an activity that is desirable but also an activity
that an organization must commit to, if it is to maintain a stable growth in productivity. Providing fringe
benefits and incentives are powerful tools in the hands of the management that can make the employee
more effective and productive.
Siemens Limited has grown over on the foundation of dedicated customer service, fair business
practices, and efficient, safe and trusted financial policies. And no big industrial organization like it
ignores the motivational needs of the employees without seriously hampering its performance. It is the
compensation, which makes the people work and keep on working.
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1.1
Significance of the Study
Now days, too much emphasis is often given to the formulation of different kinds of incentive scheme
and their disbursements, rather than assessing the outcome of such activities. Incentive schemes should
make an impact on the performance of the employee benefited. This study is an attempt to find out the
efficiency and effectiveness of the incentive schemes.
In this particular field of study, the personnel department is very active with its incentive schemes. But
this study is definitely going to bring about the various positive and negative aspects of personal
management activities so that if required the organization can modify their incentive schemes
accordingly.
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1.2
Review of Existing Literature
Foresee ability and Copyright Incentives

Copyright laws principal justification today is the economic theory of creator incentives. Central to this
theory is the recognition that while copyrights exclusive rights framework provides creators with an
economic incentive to create, it also entails large social costs, and that creators therefore need to be given
just enough incentive to create in order to balance the systems benefits against its costs. Yet, none of
copyrights current doctrines enable courts to circumscribe a creators entitlement by reference to
limitations inherent in the very idea of incentives. While the common law too relies on providing actors
with incentives to behave in certain ways, it recognizes that its incentive structure has outer limits and
that failing to calibrate an entitlement or liability with these limits in mind is likely to prove inefficient.
The principal mechanism that it employs to this end is the concept of foresee ability. Premised on the
idea that individuals do not ordinarily consider consequences that are temporally or causally far removed
from their actions, foresee ability allows courts to balance a regimes ex ante incentive effects against its
ex post costs when determining liability.
This Article argues that if copyright law is to remain true to its theory of incentives, and thereby the need
to balance monopoly control with the social costs that are central to the theory, it needs to internalize the
idea that creators, like actors elsewhere, are incapable of fully anticipating all future contingencies
associated with their actions, which in turn limits the effectiveness of incentives. To this end, this Article
proposes a test of foreseeable copying to limit copyrights grant of exclusivity to situations where a
copiers use was reasonably foreseeable at the time of creation the point when the incentive is meant
to operate. Adopting a test of foresee ability is thus likely to better align copyright law with its
underlying purpose and provide courts with a mechanism by which to give effect to copyrights theory of
incentives in individual cases thereby according the theory more than just rhetorical significance.
Source: http://www.harvardlawreview.org/issues/122/april09/Article_547.php
Improving Ethical Review of Research Involving Incentives for Health Promotion

Advances in behavioural economics are driving efforts to use material or financial incentives to promote
health-related behaviour in international development, public health, and clinical medicine.
Current ethical frameworks for human research assume that material or financial incentives are provided
to participants either as compensation for their time and expenses, or as an inducement to participate in
research.
Some common concerns about using incentives to increase participation in research, such as that
attractive incentives will undermine participant autonomy, are misplaced when incentives are used to
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overcome economic obstacles or a lack of effective motivation, and when recipients are incentivized to
engage in health-related behaviours or practices with which they are already familiar and which they
regard as beneficial or worthwhile.
Source: http://www.plosmedicine.org/article/info%3Adoi%2F10.1371%2Fjournal.pmed.1001193
Impact of Targeted Financial Incentives on Personal Health Behavior

Over the past decade, there has been a substantial increase in the use of financial incentives by private
employers and public programs to encourage healthy behaviors, wellness activities, and use of preventive
services. The research evidence regarding the effectiveness of this approach is reviewed, summarizing
relevant findings from literature reviews and from recent evaluations. The article concludes that financial
incentives, even relatively small incentives, can influence individuals' health-related behaviors. However,
the findings regarding health promotion and wellness are based primarily on analyses of a limited
number of private sector initiatives, whereas the evidence regarding preventive services is based on
evaluations of initiatives sponsored predominantly by public programs and directed at low-income
populations. In either case, there are several important limitations in the ability of the published findings
to provide clear guidance for public program administrators or private purchasers seeking to design and
implement effective incentive programs.
Source: http://mcr.sagepub.com/content/65/6_suppl/36S.short
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1.3
Conceptualization
The project Role of incentive schemes in Siemens, order to take knows what kind of incentives
schemes are there in the organization.
An incentive scheme is a plan or program to motivate individual or group performance. An incentive
program is most frequently built on momentary rewards, but may also include a variety of non-monetary
rewards or prizes.
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1.4
Focus of the Problem
In a competitive world where technology changes and market shifts are escalating the employees
aspirations, the key is to attract and retain talented employees by compensating them satisfactorily. But
this is one of the hardest things to get right as different employees have different wants and needs with
varied levels of satisfaction.
The Human Resources are considered to be the greatest asset for any organization. Without effective
compensation no efficient human resources can be available. Implementing effective incentive schemes
could be sharpen the effectiveness of human resources.
With the advent of HRD in a big way in the Indian Organization, great emphasis has been on proper
compensation and extra-wage benefits. Companies today spend lakhs of rupees in paying wage and
salaries along with other allowances and incentives to their employees. But it is required to be found out
whether the organization generates out of this expenditures.
It is interesting to note that today organizations are spending enormous amount on paying allowances.
Incentives, fringe benefits or perquisites over and above the wage or salary.
It is very pertinent to note that this statistics may be impressive, but the necessary point is that one
has to judge:
The actual needs or preferences of the employees.
The efficiency of the availed compensation package in meeting these needs.
The outcome of administering the compensation policy in terms of perceived value of the
employees.
This input-output relationships needs to be studied. But it is not done in most of the organization. Also it
is to be found out whether these benefits are helping the employees as an individual and as a part of the
organization. So, it is necessary to find out whether these benefits of the incentive system have reached
the employees in terms of the objectives of the incentive system.
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1.5
Objectives of the Study
The extensive role of compensation practices and incentive schemes which play an important role in
shaping an employees performance has encouraged me to take it as the objective of my study.
General objectives:
To study and evaluate the incentive schemes presently practiced in Siemens.
Specific objectives:
To find out the nature and impact of incentive systems on companys performance as well as
employees performance.
To find out the effect of incentive schemes on satisfying the individual needs and organizational
needs.
To find out the changes in the employees capability and attitude due to incentives.
To find out the limitations of incentive schemes of the company.
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1.6
Hypothesis
A hypothesis is an explanation for a phenomenon which can be tested in some way which ideally either
proves or disproves the hypothesis. For the duration of testing, the hypothesis is taken to be true, and the
goal of the researcher is to rigorously test the terms of the hypothesis. The concept of the hypothesis is a
very important part of the scientific method, and it also holds true in other disciplines as well. For
example, some historians have put forward the hypothesis that the Salem Witch Trials were brought
about by the consumption of grains contaminated with ergot, resulting in a mass hysteria
Hypothesis used are as followed:
H0: Incentive schemes helping the organization for achieving their long term goals.
H1: Incentive schemes are not helping the organization for achieving their long term goals.
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Research Methodology
Research Plan: Research Plan is no specific for all types of research; it is decided depending upon the
nature of the problem.
It can be
Exploratory
Descriptive
2.1
Research Design
Research design is a master plan specifying the method and procedure for collection and analyzing
needed information. The research design adopted for the study is descriptive research.
The descriptive research attempts to obtain complete and accurate description of a situation. It helps to
portray the characteristics of a group or individuals or situation.
2.2
Universe & Survey Population
The population or universe represents the entire group of universe which is the focus of study. Thus the
population could consist of the entire person in the country or those in a particular geographical location.
It may also consist of non human units.
Universe: Gurgaon
2.3
Sample
Since it is not possible to study whole universe, it becomes necessary to take sample from the universe to
know about its characteristics.
Sample Size: 100

Sampling Type: Random Stratified Sampling Method
Sampling Units: Employees of Siemens of Gurgaon.
Research Instrument: Structured Questionnaire.
2.4
Collection of Data
Data is the raw information that a researcher collects through surveys. It is the main basis for data
analysis and interpretation.
Primary Data is collected using the questionnaire.
Data under this project:

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1. Primary Data:
All the employees of the Siemens were the main source of Primary data. The method of collection of
primary data was direct personal interview through a structured questionnaire.
2. Secondary Data:
It was collected from internal sources. The secondary data was collected on the basis of organizational
file, official records, news papers, magazines, management books, preserved information in the
companys database and website of the company.
2.5
Analysis Pattern
Collect both primary and secondary data and followed in given methods:
Coding
Graphing
Pie Charts, Tables etc.
Interpretation
Conclusion
Organizational Profile
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Type
Gesellschaft mit beschrnkter Haftung
Traded as
FWB: SIE, NYSE: SI
Founded
1997 in Munich
Headquarters
Munich, Germany
Area served
Worldwide
Key people
Roland W. Chalons-Browne(CEO), Dr. Peter Moritz (CFO),
Products
Equipment financing & leasing, vendor finance, asset-based lending, private equity, project and
equity participations, project and export financing, industrial insurance solutions, private finance
solutions, asset management, treasury solutions, structured financing, banking
Services
Business services, financing
Employees
2,600
Siemens Vision Statement
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Siemens Global Vision

Siemens - the pioneer in:
Energy efficiency
Industrial productivity
Affordable and personalized healthcare
Intelligent infrastructure solutions
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Siemens Mission Statement

We are a strong and reliable partner in the electrical engineering and electronics business.
Our mission is to continuously optimize our customers' business through our world-class solutions,
services and products.
We ensure the success of our company by constantly and consistently satisfying our customers,
shareholders and employees.
Siemens Values
Our values are the core of our business philosophy which we have pursued for the last 160 years. More
than 400,000 employees in 190 countries are bounded by these values.
The values are not new, our employees live by them every day and, based on these values, they achieve
the business success in dealing with customers, suppliers or partners. The values are absolutely business
relevant - and we strongly believe that no customer would want to work with a company which is not
perceived as reliable, excellent and innovative!
Innovative
Being innovative to create sustainable results
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Excellent
Achieving high performance and excellent results
Responsible
Committed to ethical and responsible actions
Incentive system at Siemens Ltd: An Analysis

The incentive scheme of Siemens Ltd. is a performance-based scheme. Siemens Ltd. has a detailed
performance evaluation system and award of incentives is strongly linked to performance indicators.
The incentive scheme is intended to motivate the employees apart from retaining valuable manpower.
Siemens Ltd. has adopted a two-dimensional incentive system comprising of:
Financial incentives
Non- Financial incentives
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Incentives
Non- Financial incentives
The amount of financial incentives payable to any employee depends on his contribution towards
achievement of the targets.
It is given mainly to employees in the following three forms:
Performance incentive
Branch incentive
Attendance incentive
Performance incentive:
It is the individual incentive given to the employees on the basis of their performance.
Eligibility: It is applicable to all the employees at the HO as well as the branches.
Procedure: The performance of an employee is evaluated by either the Branch-in-charge or the
respective super-ordinate.
Performance appraisal is done through:
Performance review (By appraiser)
Self review (Self appraisal)
Performance is evaluated by the appraiser and is recorded as any one of the following categories:
Excellent
Very good
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Good
Satisfactory
Based on the result of his performance appraisal, the appraiser recommends the name of the appraise to
the Branch Manager or to the overall in-charge who in turn with due consideration forwards the
recommendation to the top management.
Amount: The amount of incentive to be disbursed is decided by the top management based on the level
and quality of performance exhibited by the employee.
Payment: The payment is done annually.
Branch Incentive:
Also termed as Collection Incentive it is the group incentive provided to all the employees of a branch
o the basis of their collection or recovery of finance disbursed.
Eligibility: Applicable only to those branches which have achieved the collection target fixed for that
financial year.
Procedure: At the beginning of each financial year an annual conference of all the Branch-in-charges, RO-in- charges and the top management is conducted. There the Annual Average Performance (AAP)
target is fixed regarding the amount to be financed and the percentage of recovery to be done. This target
is fixed in consultation with the Branch Managers and the Regional Heads depending upon:
Size of the branch
Previous business transactions
Subsequently, the branch manager fixes the target for the field officers in accordance with the target fixed
for the Branch.
Amount: It is decided by the top management. The figure of amount generated by the companies MIS is
then distributed among the employees of the branch in the following manner:
20% of the amount allotted is paid to the Branch Manager or in-charge.
Rest of the amount is distributed equally among all the branch members including the Branch
Manager.
Payment: Annually
Attendance Incentive:
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It has been introduced with a view to motivate the employees to attend office regularly without availing
any leave.
Eligibility: Applicable to all employees of only union grade (Gr.I - Gr.V).
Applicable to employees:
Who have not availed any leave such as CL/PL/SL.
Who have not availed permission for late attendance not exceeding one hour in a particular
month.
Payment: A sum of Rs. 15/- p.m. will be paid once in three months in a quarter based on their
attendance.
Non-financial incentives:
These are the encouragers or motivators unrelated to money, which enables the management of the
company to motivate its employees to work efficiently and contribute to maximum.
While analyzing the views of the respondents at Siemens Ltd. towards the prevalent incentives scheme
an equally considerate non-financial scheme is successfully practiced at Siemens Ltd.
The various non-monetary rewards provided by the company for the employees can be classified
as:
Treats: It includes
o
Festival bashes
Dinner for the entire family on special occasions.
Special birthday treats by gifts, chocolates etc.
Knick-Knacks: It includes following things

o
Desk accessories such as Pen Stands, Pens, File Covers, Staplers, Pins etc.
Providing Company watches to employees on their completion of 10 years of service.
Dialers and planners for managers.
Calendars, Special T-Shirts with companys logo.
Awards: The Company also facilitates with Trophies and Letters of appreciation to employees
who have completed 30 years and 20 years of service.
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Social Acknowledgement:
18
On successful completion of any assigned job or on achieving the fixed target, the
management encourages the employee by recognition of his talent and success at office
get-togethers.
The supervisor or super-ordinate also motivates his subordinates through friendly

greetings, encouraging smiles or solicitation of advise and suggestions.
Office environment: The physical environment and the office setting itself can act as a strong
motivation to work more effectively. Hence, the company has a very well-maintained office
with healthy working environment
Tokens: On certain occasion the management also gives to its employees memorable tokens
such as vacation trips and marriage gifts.
On-the-job rewards: Apart from the above, off-the-job rewards the super-ordinates or
managers of the company motivate their subordinates through on-the-job non-monetary rewards
such as:
o
More responsibility to make the employee feel competent.
Special challenging assignments to renew the employees confidence and job

satisfaction.
Training and development to acquire new skills and knowledge.
Representing the company at public foray to develop a sense of belongingness in the

employee and hence boost his performance.
3.1
Business of the Organization
Energy Sector:
o
The Energy Sector is one of the worlds leading suppliers of a wide range of products,
solutions, and services in the field of energy technology.
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We enable customers to generate, transmit and distribute electrical power at the highest
levels of efficiency. We also help them produce, convert and transport the primary fuels
oil and gas. Were the only manufacturer worldwide with know-how, products,
solutions and key components spanning the entire energy conversion chain.
Siemens Energy has about 86,000 employees worldwide. In fiscal 2012, the Sector
generated total revenue of 27.5 billion and profit of 2.2 billion.
Wind power solution from Siemens
Healthcare Sector:
o
The Healthcare Sector stands for innovative products and complete solutions as well as
service and consulting in the healthcare industry.
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As the worlds population grows and gets older, more and more people thrive to reach
their full potential and to lead a healthy, high-quality life far into old age.
At Siemens, we play a unique role; supporting healthcare professionals to do their job

by providing medical technologies that help deliver a better quality of healthcare and
enable ever-improving degrees of individual care through advanced imaging,
diagnostics, therapy, and healthcare IT solutions. We provide innovative technology to
customize medicine, enabling better differentiated diagnostic results and more distinct
therapy decisions.
With around 51,000 employees worldwide and our presence throughout the world,
revenue worth 13.6 billion Euros, and profits of approximately 1.8 billion Euros in
fiscal 2012, Siemens Healthcare helps ensure the next generation of breakthroughs
become a reality. Our commitment to advancing human health, however, goes beyond
delivering the latest diagnostic and treatment technology to our customers. We support
their success through close collaboration and mutual partnerships.
Together, we innovate to advance human health.
Siemens SPECT/CT scanner in operation
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Industry Sector:
o
The Industry Sector is one of the worlds leading suppliers of innovative,

environmentally friendly products and solutions for industry customers.
Integrated technologies, vertical market expertise and services for greater productivity,
energy efficiency and flexibility.
Solid market expertise, technology-based services and software for industrial processes
are the levers we use to increase our customers productivity, efficiency and flexibility.
We consistently rely on integrated technologies and, thanks to our bundled portfolio,

we can respond more quickly and flexibly to our customers' wishes. With our globally
unmatched offering of automation technology, industrial control and drive technology
as well as industrial software, we equip enterprises with what they need over their
entire value chain from product design and development to production, sales and
service. Our industry customers also profit from our comprehensive offering of
services tailored for their market and their needs.
Siemens Industry is able to cut the time needed for the market launch of many products
in half with software and automation technology while also significantly reducing
energy or wastewater costs for manufacturing companies. In this way we increase our
customers competitive strength and make an important contribution to environmental
protection at the same time with our energy-efficient products and solutions.
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Infrastructure & Cities Sector:

o
The infrastructure and cities sector provides sustainable technologies for metropolitan
centres and urban infrastructure worldwide.
Cities are a key growth market of the future.
More than half the worlds population now lives in urban areas and the number of
city dwellers is increasing every day. With a portfolio comprising integrated mobility
solutions, building and security systems, power distribution equipment, smart grid
applications and low- and medium-voltage products, our new Infrastructure & Cities
Sector offers sustainable technologies for metropolitan centres and urban
infrastructures worldwide. Combining the expertise of existing businesses in our
Industry and Energy Sectors, Infrastructure & Cities is well positioned to be a major
player in an addressable market of 300 billion.
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3.2
Management Procedures
Organization chart:
Chairman
MD
Zonal Manager
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Regional Manager
Retail Marketing
MMMarkeMMarke
Territory Manager
Branch Manager
Asst. B.M.
Alternative Channel
Territory Manager
Branch Manager
Operation Channel
Human Resource
Team Manager
HR Executive
Operation Manager
Channel Executive
Business Dev. Mgr.
Sales Dev. Mgr.
3.3
Product & Services offered by the Organization

Siemens offers a wide range of electrical engineering and electronics-related products and
services.
Its products can be broadly divided into the following categories:
Buildings-related products
Drives, automation and industrial plant-related products
Energy-related products
Lighting products
Medical products
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Transportation and logistics-related products.
Siemens' buildings-related products:
Building automation equipment and systems
Building operations equipment and systems
Building safety equipment and systems
Building security equipment and systems
Low-voltage switchgear including circuit protection and distribution products.
Siemens' drives, automation and industrial plant-related products:
Motors and drives for conveyor belts
Pumps and compressors
Heavy duty motors and drives for rolling steel mills
Compressors for oil and gas pipelines
Mechanical components including gears for wind turbines and cement mills
Automation equipment and systems and controls for production machinery
Industrial plant for water processing and raw material processing.
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Siemens' energy-related products:
Gas and steam turbines
Generators
Compressors
On- and offshore wind turbines
High-voltage transmission products
Power transformers
High-voltage switching products and systems
Alternating and direct current transmission systems
Medium-voltage components and systems
Power automation products.
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Siemens' OSRAM subsidiary produces lighting products:
Incandescent, halogen, compact fluorescent, fluorescent, high-intensity discharge and

Xenon lamps.
Opt-electronic semiconductor light sources such as light emitting diodes (LEDs), organic
LEDs, high power laser diodes, LED systems and LED luminaries.
Electronic equipment including electronic ballasts.
Lighting control and management systems.
Siemens' medical products:
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Clinical information technology systems
Hearing instruments
In-vitro diagnostics equipment
Imaging equipment including angiography, computed tomography, fluoroscopy, magnetic

resonance, mammography, molecular imaging ultrasound, and x-ray equipment
Radiation oncology and particle therapy equipment
Siemens' transportation and logistics-related products:
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Equipment and systems for rail transportation including rail vehicles for mass transit,
regional and long-distance transportation, locomotives, equipment and systems for rail
electrification, central control systems, interlocking, and automated train controls
Equipment and systems for road traffic including traffic detection, information and
guidance; equipment and systems for airport logistics including cargo tracking and baggage
handling
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Equipment and systems for postal automation including letter parcel sorting
30
4 About the project

THE TOPIC: ROLE OF INCENTIVE SCHEME IN SIEMENS, GURGAON
Incentive system
Introduction
The term incentive or reward implies anythings that increases an employees willingness or
motivation to work.
-Burack & Smith
An incentive scheme is a plan or program to motivate individual or group performance. An incentive
program is most frequently built on momentary rewards, but may also include a variety of non-monetary
rewards or prizes.
Incentive plans are designed to stimulate human effort by rewarding the person over and above the time
related remuneration, for improvements. Basically, incentive implies a system of payment under which
the amount payable to a person is linked with his output. Such a payment may also be called Payment
by results.
Features of incentive plan:
It may consist of both monetary and non-monetary elements, a combination of which can
provide the diversity needed.
It should be based on correct timing, accuracy and correct frequency for being effective.
It should be properly communicated to the employees to encourage individual performance,

provide feedback and encourage redirection.
Factors influencing incentive plans:

The important factors, which influence an organizations incentive scheme, are as follows:
Organization financial ability to provide to benefits.
Employees deficiencies or needs.
The bargaining strength of trade unions.
Employees contribution to the organization.
Need for creating motivators and boosters for the employees.
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Determinant of incentives:
The efficiency of incentives is mainly affected by its suitability and design.
The effective use of incentives depends on three variables:
The individual: How to employee perceive react the incentive plan with respect to their
difference in age, marital status, economic need etc. Also what amount of value different
employees attach to the different components of the plan.
Work Situation: It includes

o
Technology
Satisfying job assignments
Equity
Feedback
The incentive plan: Effectiveness of incentives depends upon three factors:

o
Drives
Preference value
Satisfying value
In general:
Incentives whether monetary or non- monetary tend to increase the level of motivation.
Financial incentives effectively with higher motivation or becoming needs.
Non-financial incentives are linked more effectively with higher motivation or becoming needs.
The higher the position of an employee I an organization, the greater is his vulnerability to nonfinancial incentives.
Classification of incentives:
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32
Incentives
Monetary
Non-monetary
Monetary Incentives:
It refers to extra financial motivation by rewarding the employee over and above his regular
remuneration for performing more than the targeted work.
Some of them are:
Overtime wages
Higher basic wages
Incentive bonus
Merit increments
Suggestion rewards
Various allowances
Promotion
Fringe benefits etc.
Non- Monetary Incentives:

These incentives serve as attention-getters or encourages unrelated to money.
Some of them are:
Good human relations
Self respect
Recognition
Status
Sense of belonging
Appreciation
Higher responsibility etc.
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33
Incentives have also been classified into:
Individual Incentives
Group Incentives
Organization Incentives
Individual Incentives:
Here, the rewards are based solely on individual performance. It is the extra compensation paid to an
individual over a specified amount for his production effort. Such system is feasible only where an
individual can increase the quantity and quality of his output by his own individual efforts.
Group Incentives:
These schemes provide for the payment of a bonus either equally proportionality to individuals within a
group or area. The bonus is related to the output achieved over an agreed standard or to the time saved on
the job the difference between allowed time and actual time. These are usually applied to small teams
and the rewards are based on the performance of the entire group.
Organization Incentives:
It involves co-operation and collective effort of the employee and management in order to accomplish
broader organizational objectives.
Such as:
To reduce labour, material and supply costs.
To decrease turnover and absenteeism.
To strengthen employee loyalty to the company.
To promote harmonious labour management relation.
One of the aspects of this scheme is profit sharing under which an employee receives a share of profit
fixed in advance under an agreement freely entered into.
Non-monetary incentives:
The creation of such rewards is only limited by the managers ingenuity and ability to assess Pay offs
that individuals within the organization find desirable. The classification of such non-financial incentives
tends to smorgasbord desirable things that are potentially at the disposal of the organization.
Also, care must be taken to provide the best suitable reward for each person.
Following are some examples of non-financial incentives which especially appeal to the needmotives of the affiliation, power and recognition.
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34
Need-motive of employee
Non-monetary incentive required
Strong need for affiliation
Job assignments providing opportunities to

relate to socially attractive individuals.
Opportunity to relate and communicate

with others.
High status and esteem
Desire for power
Reputation
Well-furnished office room.
Impressive job title.
Independent telephone, secretary.
Reserved parking lot.
Opportunity for leadership
Administrative responsibilities
Participative/free rein management style
Participation in decision-making
Verbal praise or publicized awards.
Advantages:
Advantages of Non-monetary rewards include:
Non-monetary rewards motivate employees to perform better.
Non-monetary rewards build employee self- esteem.
Employees become more loyal to the company.
These benefits create an atmosphere where change is not resented.
These benefits can be provided without any extra cost.
Create close bondage between the company and employee family.
Disadvantages:
The non-monetary rewards, despite the advantage discussed above, suffer from the following
disadvantages.
These benefits de-motivate the employees, if the processes are not transparent.
These rewards may result in shortsighted and hasty decision-making.
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35
These rewards may result in unhealthy competition among employees.
Work intrudes on the home life of the employees.
Employees feel that management concentrates on the non-cost programs.
These rewards will not work, if the monetary rewards are not adequate.
Monetary or wage incentives:

Wage incentives are financial benefit paid to employees in recognition of their outstanding performance.
According to the National Commission on Labour The wage incentives are extra financial
motivation. They are designed to stimulate human effort by rewarding the person over and above the
time rated remuneration for improvement in the present or targeted results.
Thus, we may define wage incentives as, A system of payment under which the account payable to
a person is limited with his output.
The purpose of wage incentives is to impart motivation for higher efficiency and greater output.
Increase earning would enable the employees to improve their standard of living and help the
organization to improve their productivity.
They also help in reduced supervision, better utilization of work hours, reduced absenteeism and
turnover.
Incentive system divides into four categories;
Earning vary in proportion to output.
Earning vary proportionality less than output.
Earning vary proportionality more than output.
Earning differ at different levels of output.
Wage Incentive Scheme

According to Hummel and Nickerson, It refers to all the plans that provide extra pay for extra
performance in addition to regular wages for a job.
Incentive schemes are regarded as beneficial to both employers and employees.
They are accepted as sound technique for the achievement of greater productivity and good performance.
Objectives of Wage Incentive Scheme:
To improve the profit of a firm through a reduction in the unit costs of labour and materials or
both.
SBIT
To avoid or minimize additional capital investment for the expansion of production capacity.
36
To increase a workers earnings without dragging the firm into a higher wage rate structure
regardless of productivity.
To use wage incentives as a useful tool for securing a better utilization of manpower, better
production scheduling and performance control and a more effective personnel policy.
Merits of Wage Incentive Scheme:
Wage incentive schemes offer to workers the prospect of earning more thereby raising their standard
of living.
Wage incentive schemes help in improving the industrial relations and discipline in the organization.
Wage incentive schemes act as rewards for good performance. This encourages workers to come
forward with new ideas and suggestions to improve productivity.
Wage incentive schemes are based on a standard of performance for the job. The standard is usually
set after making a scientific work study. This brings about improvements in methods.
Wage incentive schemes are beneficial as they reduce the need for supervision and thereby reduce
the cost of production.
Wage incentive schemes bring commonality of goals and targets between the management and
workers.
This helps in developing a feeling of mutual co-operation between the management and the workers.
Demerits of Wage Incentive Scheme:
Some workers are more productive than the others. This helps them to earn more. When the earning
capacity among workers differs, it results in jealousy among them.
Workers tend to sacrifice quality for the sake of quantity. This results in the production of substandard goods.
In order to produce more, workers will disregard safety regulations. This may result in injury to
workers and breakdown of machinery.
Workers tend to overwork and these results in undermining their health.
Workers very often ask for compensation whenever production flow is disrupted due to fault of
management.
Even where an incentive scheme yields an increased output, it may generate tensions among the
different parts of an organization.
Such tensions often create difficult managerial problems which may eventually affect output.
Essential Requirements of a Sound Wage Incentive Plan

Most incentive plans involve:
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37
Measurement of the amount of work done (management measures it).
Establishment of quota of standard output or the norm on the basis of which the incentive has to
be worked out.
Utilization of a formula for relating pay to production or performance, i.e. setting up of a

suitable rate of, incentive, which may be subject to modification in the light of actual
experience.
The quota or the norms of production fixed as a basis of wage incentive should neither be too high nor
too low. If it is too high, it will be pre judicial to labour and acceptance by trade union would be difficult.
If it is too low, it would not be worthwhile for management to introduce the incentive scheme as the
wage bill will be large, while productivity will be low.
The characteristics of sound incentive wage plan are stated below:
Approval of Management, Workers and Trade Union: All the interested parties must accept,
support and co-operate in the incentive plan. In the absence of employee support, the
programme of incentive will rest on a shaky foundation. The plan should be formulated through
discussion and participation between management (lower level supervisors) and labour (union
officials). Workers should get full explanations and they should be trained by the management
for ensuring smooth working of the plan.
O. & M. Studies: Before a work standard is established, a standardised procedure or method

should be evolved on the basis of organization and methods analysis of each operation
Employees must be taught how to perform the work according to the optimum or standard
methods and procedure.
Work Standard: The norm or standard upon which wage incentive is based should be fixed
through careful work measurement devices, e.g., time and motion studies, work sampling of
work standard is usually measured in time.
Guaranteed Base Wage: Normally the base rate is determined by job evaluation. There may be
differential base rates reflecting properly differences in skill effort, responsibility and job
condition. The employee should be dropped due to the circumstances beyond his control. Base
rate of compensation incorporates the desirable advantage of time wage in incentive plan, viz.,
security of income.
No Unwarranted Rate Cutting: The work standard or quota, in time or money per unit, most
be guaranteed by management against unilateral and unwarranted rate cutting. The practice of
rate cutting by the employers at their will during the early days of scientific management killed
the every purpose of incentive plane, viz, higher productivity and lower unit cost of labour. A
change in the work standard is justifiable only when there is a change in the method, tooling,
equipment our design of the product.
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38
Easy Calculation of Earnings: An incentive plan should facilitate ready and easy calculation of
the employees earnings. This will build up the confidence and trust in the programme.
Complexity is one of the basic drawbacks of many incentive plans. Management should try to
simplify it as for as possible.
Grievance procedure: An incentive plan of wage payment should have effective grievance
procedure to deal with complaints and dissatisfaction ventilated by employees. The work
standard or the incentive rate may be too tight-rates difficult to meet can be adjusted through
grievance procedure.
Unless mutual confidence and good relationship exist between management and labour in a business unit,
the chances of full success of a new incentive system are very poor.
Wage Differentials
Several grievances and dissatisfactions with wages are the result of pay rate differences between jobs and
individuals. Explicitly, the individual despite his/her concern for the total pay is also interested in the
comparative pay. Wage differentials are of several kinds including supervisory differentials, skill
differentials, occupational differentials between wage and salaried individuals, and differentials based
upon job variations.
First, it is recognized that increased responsibility in supervisory positions should accompany

higher earnings. Several companies attempt to maintain as high as 25 per cent differential
between supervisors and their subordinates as a measure to provide status and prestige to the
former. This type of differential is a source of satisfaction with pay for the supervisors.
Second, attempts are made to maintain differentials between skilled and unskilled jobs. Despite
increases in the minimum wage, union pressures for uniform wages and allied factors, there
prevail wage differentials among jobs involving varied skill levels.
Third, there may arise wage differentials in view of varying occupational proficiencies. Thus,
individuals from divergent occupational groups are paid different amounts of remuneration.
These differentials induce individuals to accept more exciting work assignments as well as
motivate time and effort to jobs.
Fourth, there are differentials between wage and salaried personnel insofar as the former
receives a general wage increase and the latter does not.
Last, wage differentials steam from job variations. Frequently, job rating is used to determine
wage rates as a measure to remove unfairness and inequalities. Attempts are made to establish
rates which link the factors of productivity of human resources with their compensation in a
tangible form. Thus, there exist two types of compensation differentials relating to the worth of
different jobs as well as differential qualities of personnel leading to divergent productivity.
Wages Policy in India
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Wage policy forms a highly sensitive and complex dimension of labor policy in view of a widespread
impact of wages on the relative status of workers, their commitment to industry and their level of
motivation, morale and productivity and standard of living. It is not merely an economic phenomenon but
also a multidimensional social issue which is of interest to the consumers, the state and the society as a
whole. It is a determinant of the shares of the rival claimants of the product of industry and the national
dividend. Thus, it has to resolve conflicts over its short-and long term objectives and public and private
interests. Despite several theoretical guidelines for the formulation of a wage policy, there are varied
concrete social facts which must be taken into account in designing a wage policy. Accordingly in view
of the realities of the situation, there are several hurdles in the formulation of a wage policy in a
developing economy like Indias which adheres to a democratic system. It is in this context that the
National Commission on Labour examines various issues of wage policy.
Although there has been a laissez faire policy towards wage problems for quite a long time, settlement of
wages through third party intervention can be traced to 1918 when at the initiative of Gandhi, there took
place a wage settlement in Ahmadabad, Governments intervention for regulation of wage came with the
enactment of the Indian Trade Disputes Act, 1929. The Whitley Commission dealt with issues such as
minimum wages, standardization and intersect oral wages, and incentives, suggested survey for
collection of data and recommended a minimum wage fixing machinery of a wage board type.
Specifically the commission stressed the need for preventing unfair deductions which holds true even
today was that the problem of the industrial workers cannot be considered in isolation and that in
adopting measures for the betterment of industry or industrial workers, interests of the community at
large cannot be ignored. Although there were no immediate developments in the wage policy in response
to this report attempts were made in the late thirties to appoint ad hoc committees to settle the wage
structure in certain provinces. The government initiated its active intervention on all India basis only
during the World War II by allowing additional payment of dearness allowance for rise in prices and
share in war-time increased productivity through bonuses to the works. However as the Rage Committee
felt this short time strategy without a scientific attitude can be damaging both to the workers and the
industry. Lastly a major development was the 1946 programme which stressed the following three
elements of wage policy:
The statutory prescription of minimum wages in sweated industries and occupations in

agriculture,
Promotion of fair wage agreements,
Steps to secure for workers in plantation a living wage. Of course, the living wage amounted to
a minimum wage in this context.
Wage policy after Independence
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In response to an aftermath of the industrial unrest, the Industrial True Resolution, 1947 was adopted. As
the resolution asserts, the system of remuneration to capital and labour should be advised in a way which
promotes the interest of the consumers and the primary producers by preventing excessive profits
through suitable measures of taxation and otherwise to labour and a fair return on capital employed in the
industry and reasonable reserves for the maintenance and expansion of the undertaking. Then Industrial
Policy Resolution, 1948 was evolved. It stressed (a) fixation of statutory minimum wages in sweated
industries and (2) promotion of fair wages agreements in the more organized industries. While the former
was facilitated by the Minimum Wages Act, 1948 which had already been passed the latter took place
through the appointment of a committee on fair wages (CFW) which aimed at the determination of
principles to evolve fair wages and suggest measures to implement these principles.
Working of wage incentive scheme in India:
In a country like India, the role of financial incentives as a primary tool for motivating workers can be
note worthy.
Besides, the necessity of raising the productivity of Indian labour is also getting due attention.
In this context, the first plan recommended:
Introducing incentive schemes to promote a more efficient working.
Safeguarding workers interest by guaranteeing a minimum wage.
Protecting workers against fatigue and undue speed up.
The second plan recommended:
The earning beyond minimum wage should be related to results.
The workers should be consulted before a system of payment by results was introduced.
The third plan recommended:
Higher productivity and
Reduction in costs
The need for introducing wage incentive scheme in India has been felt on the following grounds:
The efficiency of the Indian workers is very low.
The average Indian worker is financially poor.
India is at a low level of technology.
A proper application of a well-designed wage incentive scheme can so affect the prices that the
community would e benefitted.
The profit- sharing system:
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Profit-sharing is regarded as a stepping stone to industral democracy. Prof. Seager observes: profitsharing is an arrangement by which employees receive a share, fixed in advance of the profits. The
International Co-operative Congress held in Paris in 1889 considered the issue and defined profit-sharing
as an agreement (formal or informal) freely entered into, by which an employee receives a share fixed in
advance of the profits.
Profit-sharing usually involves the determination of an organisations profits at the end of the fiscal year
and the distribution of a percentage of the profits to workers qualified to share in the earnings. The
percentage to be shared by the workers is often predetermined at the beginning of the work period and is
communicated to the workers so that they have some knowledge of their potential gains. To enable the
workers to participate in profit-sharing, they are required to work a certain number of years and develop
some seniority. The theory behind profit-sharing is, that management feels its workers will fulfill their
responsibilities more diligently if they realise that their efforts may result in higher profits, which will be
returned to the workers through profit-sharing.
Features of Profit-sharing:
The agreement is voluntary and based on joint consultation made freely between the employers
and employees.
The payment may be in the form of cash, stock of future credits of some amount over and above
the normal remuneration that would otherwise be paid to employees in a given situation.
The employees should have some minimum qualifications, such as tenure or satisfy some other
condition of service which may be determined by the management.
The agreement on profit-sharing having been mutually accepted, is binding and there is no room
on the part of the employer to exercise discretion in a matter which is vital to the employees.
The amount to be distributed among the participants is computed on the basis of some agreed
formula, which is to be applied in all circumstances.
The amount to be distributed depends on the profits earned by an enterprise.
The proportion of the profits to be distributed among the employees is determined in advance.
It should be noted that profit-sharing is not a system of wage payment as such; it is something else.
Profit-sharing and bonus (also profit-sharing bonus) are two different things, for the former sharing
implies sharing on an equal footing rather than yielding on the part of a management to a persistent
demand. Profit-sharing bonus on the other hand refers to the distribution of profit on the basis of a certain
percentage of ones monthly wages. Moreover, it is not voluntary and is not based on agreement.
Profit-sharing is a distinctly progressive measure towards industrial harmony. It may be considered as a
step short of joint consultation or co-partnership schemes. Wage-business affairs are managed and shared
on a footing of equality. Essentially the means the creation of a mental climate in which a strong sense
has to grow that the business is the business of all, since it is the joint effort of the workers and the
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42

management and since the one cannot carry on a business without the help of the other. This is the inner
essence of profit-sharing which has often been overlooked.
There are three main characteristics of labour remuneration in the form of profit-sharing, which
distinguish it from gain-sharing and form an ordinary system of wage payment.
These features are:
A share in profits is payable at long intervals when the final accounts of a firm are prepared and
its profit or loss ascertained.
The payment is of an uncertain nature because of the uncertainty of profits. Sometimes there
may be no profits or very high profits; in other cases there may actually be some losses.
The payment is not based on individual work, efficiency or merit, but is a remuneration for
collective effort, the total remuneration due to workers being equally divided among them or in
some agreed proportion.
The payment is sometimes regarded as windfall gain or as something to which a worker is

entitled and not as something in recognition of his efficiency.
Objectives of Profit-Sharing:
Profit-sharing is more than just another employee benefit. It may be the most important part of
progressive personnel policy. It may incorporate incentive features and produce results not
possible by the implementation of other programmes. Companies which offer this incentive
have realised higher profits and increase efficiency and have created a climate for better
employee relations.
The critical ingredient in profit-sharing is the desire of the employees and the management to
ensure the success of a programme. The programme is formulated at the top because profitsharing is first and foremost, a principle and technique of leadership.
The real objective of profit-sharing is to foster the unity of interest and the spirit of cooperation. From the point of view the employees, profit-sharing may serve a multiple of
objectives, depending upon the type of plan which is adopted. A cash plan contributes directly to
an employees immediate economic gain. Deferred plans and combination plans contain features
very similar to benefit plans which provide for retirement benefits and against loss of income
following disability, for benefits to dependants in the event of the death of an employee, and for
other related benefits. From the view point of the organisation, employee productivity is the
overriding objective of profit-sharing. At the same time, it may contribute to employee
satisfaction because profit-sharing provides for rewards which are related to employee needs.
A profit-sharing scheme is generally introduced to achieve the following objectives:
To promote industrial harmony and stabilisation of the work force.
To eliminate waste in the use of materials and equipments.
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43
To instill a sense of partnership among employees and employers and to increase employee
interest in the company in which he works.
To attract desirable employees and retain them, thereby reducing the rate of turnover.
To encourage employee thrift.
To provide a group incentive for a large output.
To insure employee security.
To demonstrate some measure of social justice to employees.
The purpose of profit-sharing is the achievement of industrial harmony.

Forms of Profit-Sharing: Profit-sharing may be on
Industry Basis: Here the profit of a number of industrial units in the same industry may be
pooled together to determine the share of labourers. Such a scheme has the advantage of putting
the whole labour force in a particular industry on a uniform basis. Moreover, if a certain
industrial unit somehow shows a loss in a particular year, its workers are not deprived of their
remuneration because other units have made a good profit.
Locality Basis: Industrial units in a particular locality may pool their profits to determine
labours remuneration by way of profit-sharing. However, if there are heterogeneous industrial
unit in a locality, where labours work is for a widely divergent natures, there may be great
difficulties in bringing about an adjustment in their share.
Unit Basis: This is the simplest way of giving a labourer a share in the profits of the individual
undertaking in which he is employed. This mode of profit-sharing establishes a close
relationship between the efforts of labour and rewards it receives. In the first two schemes, the
reward of workers depends on the combined efforts of all in a number of units.
Department Basis: Sometimes the various departments of industrial unit may have their
separate profit-sharing schemes. The workers in a particular department share in the profits
made by that department. This aims at bringing about an even closer relationship between a
workers efforts and the reward he receives.
According to David De Cenzo and Stephen Robbins:Human Resource Management is concerned with the people dimension in management. Since every
organization is made up of people, acquiring their services, developing their skills, motivating them to
higher levels of performance and ensuring that they continue to maintain their commitment to the
organization are essential to achieving organizational objectives.
According to Edwin Flippo:HRM is the planning, organizing, directing and controlling of the procurement, development,
compensation, integration and maintenance and separation of human resources to the end that individual,
organizational and societal objectives are accomplished.
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44

In the present scenario, HR managers perform a variety of responsibilities. Now it is more strategic
as per the demands of the industry. A role of HR manager is as under:
Managing people
Motivating the workforce
Competency Development
Recruitment and Training
The Trust Factor
Work life Balance Factor
Attrition/Retention of the Talent Tool
Bridging the Demand Supply Gap
Concerns in Human Resource Management

1.
Determining the numbers to be employed at any location
If organizations overdo the size of their workforce it will carry surplus or underutilized staff.
Alternatively, if the opposite misjudgment is made, staff may be overstretched, making it hard or
impossible to meet production or service deadlines at the quality level expected.
2. Retaining your highly skilled staff
Issues about retention may not have been to the fore in recent years, but all it needs is for organizations to
lose key staff to realize that an understanding of the pattern of resignation is needed. Thus organizations
should monitor the extent of resignation, discover the reasons for it, establish what it is costing the
organization, compare losses with other similar organizations.
3. Where will the next generation of managers come from?
Many senior managers are troubled by this issue. They have seen traditional career paths disappear. They
have had to bring in senior staff from elsewhere. But they recognise that while this may have dealt with a
short-term skills shortage, it has not solved the longer term question of managerial supply: what sort,
how many, and where will they come from? To address these questions you need to understand
This then can be compared with future requirements, in number and type. These will of course be
affected by internal structural changes and external business or political changes. Comparing your
current supply to this revised demand will show surpluses and shortages which will allow you to
take corrective action such as:
Recruiting to meet a shortage of those with senior management potential.
Allowing faster promotion to fill immediate gaps.
Developing cross functional transfers for high fliers.
Hiring on fixed-term contracts to meet short-term skills/experience deficits.
Reducing staff numbers to remove blockages or forthcoming surpluses.
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45

Thus appropriate recruitment, deployment and severance policies can be pursued to meet business needs.
Otherwise processes are likely to be haphazard and inconsistent. The wrong sort of staff is engaged at the
wrong time on the wrong contract.
Data Analysis & Interpretation
5.1
Questionnaire Analysis
1.
Whether the remuneration paid by the company is at par with the level of responsibility on
the employees or not?
On the basis of level of management
Response
Top
Middle
Low
Total
Score
E
VG
G
S
NS
Total
Score
Mean score
management
1
2
8
0
2
13
39
3.0
Management
2
6
5
8
8
29
73
2.51
Management
3
4
19
19
13
58
139
2.39
6
12
32
27
23
100
251
2.51
30
48
96
54
23
251
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46
% Score= (2.51-1)*25=37.75
Interpretation
It is observed from the above table that the respondents are not satisfied ( total mean score=2.5)
with the remuneration package paid in commensurate with the level of responsibility given by
the company.
In relation to this aspect the Top management opinion (50%) is much better than the Middle
management (37.75%) and Lower management (34.75%)
2. Whether the pay package is enhanced at regular intervals or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
5
16
12
6
1
13
40
3.07
SBIT
Middle
Low
Management
Management
5
10
24
32
12
36
24
24
6
12
29
58
71
138
2.44
2.37
% Score= (2.49-1)*25=37.25
47
Total
Score
4
18
20
39
19
100
249
2.49
20
72
60
78
19
249
Interpretation
From the above table it is observed that, the overall employees do not give strong support (total
mean score=2.49) to the statement that pay package is regularly enhanced.
In the same, context, it is seen that there is difference in degrees of compliance as Top
Management Opinion (Mean Score =3.07) is more supportive than the Middle management
(Mean Score=2.44) and the Lower management (mean Score=2.37)
3. Whether the accommodation or HRA provided by the company is satisfactory or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
5
12
18
4
1
13
40
3.07
SBIT
Middle
Low
management
Management
10
20
20
40
12
45
22
28
7
15
29
58
71
148
2.44
2.55
% Score= (2.59-1)*25=39.25
48
Total
Score
7
18
25
27
23
100
259
2.59
35
72
75
54
23
259
Interpretation
From the statistical data in the above table, it can be inferred that the employees are not
completely satisfied (total Mean Score=2.59) with the accommodation facilities extended by the
company.
In relation to this aspect, the opinion of the Top management is somewhat more optimistic
(Mean Score=2.44) and Lower Management (Mean Score=2.55).
4. Whether the medical facilities availed to the employees is satisfactory or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
10
16
8
2
0
13
36
2.76
SBIT
Middle
Low
Management
Management
35
40
12
36
18
48
20
38
3
6
29
58
88
168
3.03
2.89
% Score= (3.02-1)*25=50.5
49
Total
Score
17
16
28
30
9
100
302
3.02
85
64
84
60
9
302
Interpretation
From the data gathered during the survey and analyzed in the above table, it is clear that most of
the employees are quite satisfied (Total Mean Score = 3.02) with the various medical facilities
provided to them.
Unlike the earlier discussed compensation practices, in this particular aspect the Middle
management seem to be more satisfied (Mean Score = 3.03) than the Lower management
( Mean Score = 2.98) and the Top management ( Mean Score = 2.76).
5. Whether the LTA facilities extended are attractive in comparison to other industries or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
10
8
21
2
1
13
42
3.23
SBIT
Middle
Low
management
Management
15
5
16
36
16
48
20
38
6
13
29
58
75
140
2.58
2.41
% Score= (2.57-1)*25=39.25
50
Total
Score
6
15
29
30
20
100
257
2.57
30
60
87
60
20
257
Interpretation
The data collected through questionnaire and analyzed in the above table reveals that in total the
employees have a satisfactory view (Total Mean Score=2.57) towards the LTA facilities availed
by the company.
This is reflected in the opinion of the Top management (Mean score=3.23) which is much better
than the opinion of the Middle management (Mean score=2.58) and that of the Lower
management (Mean score=2.41)
6. Whether the employees are happy with the various incentives provided by the company or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
5
16
18
2
1
13
42
3.23
SBIT
Middle
Low
Management
Management
25
25
16
16
18
69
20
32
4
10
29
58
83
152
2.86
2.62
% Score= (2.77-1)*25=44.25
51
Total
Score
11
12
35
27
15
100
277
2.77
55
48
105
54
15
277
Interpretation
The above statistical table reveals that most of the employees are of the opinion that the various
incentives given to them are somewhat satisfactory (Total Mean Score=2.77).
It seems that in this context, the Top management have a higher opinion (Mean score=3.23)
which is much better than the opinion of the Middle management (Mean score=2.86) and that of
the Lower management (Mean score=2.62)
7. Whether the various allowances are satisfactory or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
Management
5
4
24
6
0
13
39
3.0
SBIT
Middle
Low
Management
Management
15
10
4
24
24
36
26
62
4
7
29
58
73
139
2.51
2.39
% Score= (2.51-1)*25=37.75
52
Total
Score
6
8
28
47
11
100
251
2.51
30
32
84
94
11
251
Interpretation
The above statistical table reveals that the employees are not satisfied (Total Mean Score=2.51)
with the allowances attached to their basic pay.
It seems in this context, that the Top management is much more satisfactory (Mean score=3.00)
compared to the Middle management (Mean score=2.51) and the Lower management (Mean
score=2.39).
8. Whether the retirement benefits much as gratuity are satisfactory or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
15
20
9
4
0
13
42
3.69
SBIT
Middle
Low
Management
Management
10
30
36
40
15
57
22
40
1
3
29
58
83
152
2.89
2.93
% Score= (3.01-1)*25=50.25
53
Total
Score
11
24
26
33
6
100
301
3.01
55
96
78
66
6
301
Interpretation
The above statistical table reveals that majority of the employees are quite satisfied (Total Mean
Score=2.77) with the various benefits provided to them at the time of completion of job.
It seems that in this context, the Top management have a higher opinion (Mean score=3.69)
which is much better than the opinion of the Middle management (Mean score=2.89) and that of
the Lower management (Mean score=2.93)
9. Whether the employees are satisfied with the performance appraisal system adopted by the
company or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
management
10
4
15
6
2
13
37
2.84
SBIT
Middle
Low
management
Management
10
10
16
24
18
39
16
23
9
14
29
58
69
133
2.37
2.29
% Score= (2.39-1)*25=34.75
54
Total
Score
6
11
24
34
25
100
239
2.39
30
44
72
68
25
239
Interpretation
with the performance appraisal technique implemented by the company.
It seems in this context, that the discontentment in less in case of Top management (Mean
score=2.84) in comparison to the Middle management (Mean score=2.37) and the Lower
10. Whether the annual increment and salary hike is justified or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
Management
0
16
18
4
1
13
39
30
SBIT
Middle
Low
Management
Management
10
10
20
12
9
36
20
28
9
27
29
58
68
113
2.34
1.94
% Score= (2.2-1)*25=30.0
55
Total
Score
4
12
21
26
37
100
220
2.2
30
48
63
52
37
220
Interpretation
with the pattern of annual increment and raise in salary.
It seems in this context, that the Top management are more satisfied (Mean score=3.0) whereas
the Lower management seem to be more satisfied (Mean score=1.94) than the Middle
11. Whether the company ensures satisfactory employee welfare or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
Management
15
4
21
2
1
13
43
303
SBIT
Middle
Low
Management
Management
15
15
16
48
27
39
16
46
5
7
29
58
79
155
2.72
2.67
% Score= (2.77-1)*25=44.25
56
Total
Score
9
17
29
32
13
100
277
2.77
45
68
87
64
13
277
Interpretation
The above statistical table reveals that the employees are quite satisfied (Total Mean
Score=2.77) with the various employee welfare extended by the company.
It seems in this context, that the Top management (Mean score=3.0) which is much better than
the opinion of the Middle management (Mean score=2.72) and the Lower management (Mean
score=2.67).
12. Whether the compensation package given by Siemens Ltd. is satisfactory or not?
Response
Top
E
VG
G
S
NS
Total
Score
Mean score
Management
10
4
21
4
1
13
40
3.07
SBIT
Middle
Low
management
Management
10
15
12
24
15
36
28
26
5
11
29
58
70
112
2.4
1.93
% Score= (2.48-1)*25=37.0
57
Total
Score
7
10
24
42
17
100
248
2.48
35
40
72
84
17
248
Interpretation
The above statistical table reveals that the employees are quite satisfied (Total Mean
Score=2.77) with the various employee welfare extended by the company.It seems in this
context, that the Top management is much more satisfactory (Mean score=3.07) compared to the
discontentment reflected in the opinion of the Middle management (Mean score=2.4) and the
Lower management (Mean score=1.93).
5.2
SWOT Analysis
Strengths
Superior quality of product produced.
Creative mind - the mindset of HR employees
Corporate Culture - the corporate culture can support many job candidates to apply for the
position with the organization as it can fit their personal preferences and needs
Weakness
High Price and Poor Reliability
Insecure Workforce
Weak Relationships
Poor Communication
Limited flexibility
SBIT
58
Opportunities
Growing Products
Expand business
More tie up with other world-class organizations
New and advance technology
Threats
More skilled competitors.
Aging Product
Low Quality Commitment
Limitations of the Study
The study on incentive schemes provided to employees in Siemens Limited suffers from the
following limitations:
The study was restricted to the branch located at Gurgaon.
The number of employees surveyed was small.
The present study depends on the response of staff, which may be blazed.
Time limit is restricted.
Some respondents might have been reluctant in revealing information.
SBIT
59
Conclusion
Without human effort the organization cannot accomplish its objectives. It is through the combined effort
of all the employees that monetary and material resources are utilized for organization objectives. This
has lead to a perception of employees as an organizational asset. Thus, it is the role of the organization to
better organize its compensation and incentives so as to retain its employees and enable them to work
more efficiently and productively.
Available evidence suggests that incentive is becoming increasingly important in the face of high
turnover rate and absenteeism due to ever more intensive competition.
This study reveals that the incentive package given by the company needs to be further developed to
motivate and uplift its employees performance to their maximum potentials.
This study is an attempt in finding out the relationship of companys performance with the incentive paid
by it and further tries to provide suggestions to gain better performance.
SBIT
60
8 Suggestions & Recommendations

Through this study, it is found that the response of the employees is not satisfactory as the employees
seem to be not so happy with the companys prevailing incentive schemesand incentive system.
To achieve the objective of higher performance level in employees, the recommended action is
summarized below:
Organizing the incentive system:
The employees of the organization deserve a more dynamic system of incentive to realize their
potential. To do so the recommended actions are:
o
Developing new incentive schemes, focusing on non-financial incentives. This low cost
attempt is needed, more so, to boost the morale of the Middle and Top level
management employees.
SBIT
The incentive system needs to be more adaptive to the needs of the employees.
61
Segregated incentive systems are required for the different levels of the employees
such as financial incentives for lower management and non-financial rewards for
Middle and Top level management employees.
In view of the employees highest preference for career advancement it is essential to

incorporate carrier management into HR practices to provide carrier planning and
carrier counseling to its employees.
To gain higher productivity, incentive system is required to be supported by,

performance management of the employees including performance appraisal as well as
potential appraisal.
Bibliography
A.M.Sharma, Understanding wage system
C.B.Mamoria, Personnel Management
C.R.Kothari, Research Methodology
N.G.Nair & Latha Nair, Personnel Management & Industrial Relations
P.Subha Rao, Essentials of HRM & industrial Relations
Abhigyan, A Journal of Foundation For Organizational Research & Education
Redefining HR for the 21st Century, A Journal of NIPM.
Re-engineering HRM Compendium, A Journal of NIPM.
www.hr.com
SBIT
62
www.synergy.com
www.siemens.com
SBIT
63

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Role of

Summer Training Project Report

Role of Incentive Scheme in Siemens

: Ms. Vibha Sharma

Role of Incentive Scheme in Siemens

REVIEW OF EXISTING LITERATURE...............................................................................................4

FOCUS OF THE PROBLEM...............................................................................................................8

OBJECTIVES OF THE STUDY...........................................................................................................9

UNIVERSE & SURVEY POPULATION.............................................................................................11

BUSINESS OF THE ORGANIZATION...............................................................................................20

PRODUCT & SERVICES OFFERED BY THE ORGANIZATION...........................................................24

<ABOUT CONCEPT OF THE PROJECT>.....................................................................................30

DATA ANALYSIS & INTERPRETATION........................................................................................44

LIMITATIONS OF THE STUDY.......................................................................................................57

SUGGESTIONS & RECOMMENDATIONS....................................................................................59

Role of Incentive Scheme in Siemens

Role of Incentive Scheme in Siemens

Role of Incentive Scheme in Siemens

Significance of the Study

Role of Incentive Scheme in Siemens

Review of Existing Literature

Foresee ability and Copyright Incentives

Improving Ethical Review of Research Involving Incentives for Health Promotion

Role of Incentive Scheme in Siemens

Impact of Targeted Financial Incentives on Personal Health Behavior

Role of Incentive Scheme in Siemens

Role of Incentive Scheme in Siemens

Focus of the Problem

The actual needs or preferences of the employees.

The efficiency of the availed compensation package in meeting these needs.

Role of Incentive Scheme in Siemens

Objectives of the Study

To study and evaluate the incentive schemes presently practiced in Siemens.

To find out the limitations of incentive schemes of the company.

Role of Incentive Scheme in Siemens

Role of Incentive Scheme in Siemens

Universe & Survey Population

Sample Size: 100

Data under this project:

Role of Incentive Scheme in Siemens

Role of Incentive Scheme in Siemens

Gesellschaft mit beschrnkter Haftung

FWB: SIE, NYSE: SI

Roland W. Chalons-Browne(CEO), Dr. Peter Moritz (CFO),

Business services, financing

Siemens Vision Statement

Role of Incentive Scheme in Siemens

Siemens Global Vision

Affordable and personalized healthcare

Intelligent infrastructure solutions

Role of Incentive Scheme in Siemens

Siemens Mission Statement

Role of Incentive Scheme in Siemens

Incentive system at Siemens Ltd: An Analysis

Non- Financial incentives

Role of Incentive Scheme in Siemens

Non- Financial incentives

Performance review (By appraiser)

Self review (Self appraisal)

Role of Incentive Scheme in Siemens

Size of the branch

Previous business transactions

20% of the amount allotted is paid to the Branch Manager or in-charge.

Role of Incentive Scheme in Siemens