Employee remuneration Employee Remuneration refers to the reward or compensation given to the employees for their work performances. provides basic attraction to an employee to perform job efficiently and effectively

Why is it important? Leads to employee motivation Affects employee productivity Affects work performance

FACTORS INFLUENCING EMPLOYEE REMUNERATION A number of factors influence the remuneration payable to employees. They can be categorized into: External Factors Internal

Components of remuneration Wages and Salary Wages refer to the hourly rates of pay, salary refers to the monthly rate of pay, wages and salaries are subject to annual increments.

Components of remuneration Incentives: also called ‘payment by result’ paid in addition to wages and salaries. depends upon productivity, sales profit 1. individual incentives scheme 2. group incentives scheme

Components of remuneration Fringe benefits : - These include such employee benefits as provident fund, gratuity, medical care, hospitalization, accident relief, health insurance, canteen, uniform and like Perquisites - These are allowed to executives and include company car, club membership, paid holidays, furnished house and like

Non monetary benefits Challenging job responsibilities Recognition of merit Growth prospects Comfortable working conditions Competent supervision

Factors External factors Labour market Cost of living Labour union Going rate Productivity Cost of living Labour union Government legislations The society The economy

External factors Labour Market Demand for and supply of labour influence wage and salary fixation. A low wage may be fixed when the supply of labour exceeds the demand for it. A higher wage will have to be paid when demand exceeds supply, as in the case of skilled labour.

Labour market High remuneration to skilled labour is necessary to attract and retain them. But exploitation of unskilled labour, like, for instance, paying niggardly wages because it is available in plenty, in unjustified. The Minimum Wages Act, 1948, is precisely meant to prevent this kind of exploitation.

Labour market The Going rate system involves fixing wage/salary rates in tune with what is paid by different units of an industry in a locality. Going rates are generally paid in the initial stages of plant operators. Productivity of labour also influences wage fixation

Labour market Productivity can arise due to increased effort of the worker, or as a results of the factors beyond the control of the management, and the like. From advance technology and more efficient method of production

Labour market Productivity has only a subordinate role in wage fixation. The argument that productivity would increase if it is linked to remuneration is hardly acceptable