Wage and Salary Administration

COMPENSATION It refers to a wide range of financial and non financial rewards to the employees for the services rendered to the organisation . It is is paid in the form of Wages Salaries Employee benefits Paid vacations Free travel facility Insurance benefits Retirement benefits

Objectives of Wage &Salary Administration To establish a fair and equitable remuneration To attract competent personnel To retain the present employees To improve productivity To control Costs To improve union management relations To improve the public image of the company

Essentials of sound wage and Salary structure Internal Equity External Competitiveness Built in incentive Link with productivity Maintain Real Wages Increments

Wage and Salary Base compensation Wage : Remuneration to workers doing manual or physical work.Usually given to unskilled workers. It may be given on an hourly ,weekly ,monthly basis Salary:It refers to the compensation paid to the officeemployees,foremen,managers,professional and technical staff .

Fringe Benefits Supplementary compensation Compensation over and above the base compensation to retain the employees on a long term basis . The basic purpose behind this is to attract and retain the employees and motivate them Also known as Service programs Employee benefits Non wage payments

Examples Fringe benefits Perquisites or “perks” Payment for time not worked Housing Insurance Career counseling crèche Paid memberships in professional organizations Perquisites or “perks” take home vehicles /chauffeur driven vehicles Paid vacations Club membership Entertainment allowance Paternity leave free refreshments leisure activities on work time (golf, etc.),

Base compensation Vs Supplementary compensation Payment to the workers for their work Payment is in cash Wage & salaries are paid to compensate for their services Determined by job evaluation,demand & Supply of labour ,organizations capacity to pay ,bargaining power of trade unions ,productivity ,govt regulations . It denotes fringe benefits over &above their wages /salary Paid in the from of employee services (Housing,canteen) They are paid to increase their efficiency & retain them Determined by the history of the organisation,capacity of the organisation to pay ,need to retain the talented employees ,desire to enhance the public image ,philosophy of the management

General and Individual Factors affecting Wages Employee’s Age and work Experience Educational Qualification Promotion possibilities Hazards involved in the job Stability of Employment Demand for the product Industry’s role in the economy Potentials of an employee General Factors Demand for and Supply of labour Ability to pay of the Organization Labour Unions Cost of Living Prevailing wage rates Job Requirements Productivity State Regulation

Wage policy in India It refers to all systematic efforts of the government in relation to the wage and salary system. The major objectives are To obtain to the workers a just share of the fruits of economic development. Set minimum wages for the workers whose bargaining power is weak To bring about a more efficient allocation and utilization of human resources To abolish malpractices and abuses in wage and salary payments .

The enactment of Payment of wages Act 1936 The Industrial Disputes act 1947 The minimum Wages Act 1948 The Equal Remuneration Act 1976 Constituted Wage Boards that are tripartite in nature Pay Commissions at the central and state level