HUMAN RESOURCES
MANAGEMENT
SUBMITED BY:-
ROLL NO: - 8
SY BBA
SUBMITED TO:-
The first and the most important problem in wage and salary administration is
the establishment of base compensation for the job. This problem is enormously
complicated by such factors as Supply and Demand, Labor organization, the
firm’s ability to pay, Variations in productivity and Cost of living, Government
legislation, including CIVICS RIGHTS ACT.
The wage policies of different organization vary some what. Marginal units pay
the minimum necessary to attract the required number of kind of labour. Often,
these units pay minimum wage rates required by labour legislation, and recruit
marginal labour. At the other extreme, some units pay well about going rates in
the labour market. They do so to attract and retain the highest caliber of labour
force. Some managers believe in the economy of higher wages. They feel that, by
paying high wages, they would attract better workers who will produce more
than average worker in the industry. This greater production per employee
means greater output per man hour. Hence, labour costs may turn those existing
in firms using marginal labour. Some units pay high wages because of a
combination of a favorable product market demand, higher ability to pay and the
bargaining power of trade union. But a large number of them seek to be
competitive in their wage programme, i.e., they aim at paying somewhere near
the going rate in the labour they employ. Most units give greater weight to two
wage criteria, viz, job requirements and the prevailing rates of wages in the
labour market. Other factors, such as changes in the cost of living the supply
and demand of labour, and ability to pay are accorded a secondary importance.
(4) The cost of living: - The cost of living pay criterion is usually regarded as
an automatic minimum equity pay criterion. This criterion calls for pay
adjustments based on increases or decreases in an acceptable cost of living
index. In recognition of the influence of the cost of living.” escalator
clauses” are written into labour contracts. When the cost of living
increases, workers and trade unions demand adjusted wages to offset the
erosion of real wages. However, when living costs are stable or decline, the
management does not resort to this argument as a reason for wage
reductions.
(5) The living wage: -Criterion means that wages paid should be adequate to
enable an employee to maintain himself and his family at a reasonable
level of existence. However, employers do not generally favor using the
concepts of a living wage as a guide to wage determination because they
prefer to base the wages of an employee on his contribution rather than on
his need. Also, they feel that the level of living prescribed in a workers
budge is open to argument since it is based on subjective opinion.
(7) Skill Levels Available in the Market: - With the rapid growth of
industries business trade, there is shortage of skilled resources. The
technological development, automation has been affecting the skill levels
at faster rates. Thus the wage levels of skilled employees are constantly
changing and an organization has to keep its level up to suit the market
needs.
ADMINISTRATION OF WAGES AND SALARIES:-
Alternatively, the over all plan is first prepared by the Personnel Manager
in consultation and discussions with senior members of other departments. It is
then submitted for final approval of the top executive. Once he has given his
approval, for the wage and salary structure and the rules for administration, its
implementation becomes a joint effort of all heads of the departments. The
actual appraisal of the performance of subordinates is carried out by the various
managers, who in turn submit their recommendations to higher authority and
the latter, in turn, to the personnel department. The personnel department
ordinarily reviews recommendations to ensure compliance with established rules
of administration. In unusual cases of serious disagreement, the president
makes the final decision.
a) There should be definite plan to ensure that differences in pay for jobs are
based upon variations in job requirements, such as skill effort,
responsibility or job or working conditions and mental and physical
requirements.
b) The general level of wages and salaries should be reasonably in line with
that prevailing in the labour market. The labour market criterion is most
commonly used.
c) The plan should carefully distinguish between jobs and employees. A job
carries a certain wage rate, and a person is assigned to fill it that rate.
Exceptions sometimes occur in very high level jobs in which the job holder
may make the job large or small, depending upon his ability and
contributions.
d) Equal pay for equal work, i.e., if two jobs have equal difficulty
requirements, the pay should be the same, regardless of who fills them.
e) An equitable practice should be adopted for the recognition of individual
differences in ability and contribution. For some units, this may take the
from of rate ranges, with in grade increases; in others, it may be a wage
incentive plan; in still others, it may take the from of closely integrated
sequences of job promotion.
f) There should be a clearly established procedure for hearing and adjusting
wage complaints. This may be integrated with the regular grievance
procedure, if it exists.
g) The employees and the trade union, if there is one, should be informed
about the procedure used to establish wage rates. Every employee should
be informed of his own position, and of the wage and salary structure.
Secrecy in wage matters should not be used as a cover up for haphazard
and unreasonable wage programme.
h) The wage should be sufficient to ensure for the worker and his family
reasonable standard of living. Workers should receive a guaranteed
minimum wage to protect them against conditions beyond their control.
i) The wage and salary structure should be flexible so that changing
conditions can be easily met.
j) Prompt and correct payments of the dues of the employees must be
ensured and arrears of payment should not accumulate.
k) For revision of wages, a Wage Committee should always be preferred to
the individual judgment, however unbiased, or a manager.
l) The wage and salary payment must fulfill a wide variety of human needs,
including the need for self-actualization. It has been recognized that
“money is the only form of incentive which is wholly negotiable, appealing
to the widest possible range of seekers. Monetary payment often acts as
motivation and satisfies interdependently of other job factors.
(11) Skill Levels Available in the Market: - With the rapid growth of
industries business trade, there is shortage of skilled resources. The
technological development, automation has been affecting the skill levels
at a faster rate. Thus the wage levels of skilled employees are constantly
changing and an organization has to keep its level up to suit the market
needs.
CASE STUDY:-
a) Contractual
b) Permanent
The workers on contractual basis are paid a fixed wage of 120 rupees per
day, which is also the minimum wage applicable as per the MINIMUM
WAGES ACT:-
They are paid 60% for over-time. On the other hand the workers on
permanent basis are paid a piece rate basis (i.e. production basis).
However the salary of the engineers and all the other employees but the
labour is fixed.
The contractual workers are not entitled to festive bonuses, but there is a
drawback for the company in employing permanent labour against
contractual labour which is that the permanent labour force has to be paid
40% of their average wages even when they are not on work that is strike
or ideal. Also the permanent labours are entitled to wage increment every
6-8 months.
Talking about the skills of the labours special emphasis is laid. Whenever
a labour acquires the necessary skills and become competent enough he is
promoted.
Since the labours easily available in the surrounding areas of Nasik the
labours have doesn’t much say in their wages? Mostly due to the huge
supply of labours also the trade unions are hesitant to ask for a wage
implement for the above mentioned reason.
The wages to the labours are ample for them to sustain themselves. Also
the labours are fully content with their wage rates.
The medical expenses and educational expenses of the laborer’s children’s
are borne by the company. This acts as in incentives for the laborers.
The production technique in the company where labour intensive.
However recently (before 6 months) the entire manufacturing process in
the company has undergone a drastic change. They have automated most
of the manufacturing process which resulted in a major retrenchment of
the labour force. However it was off-set by the increasing salary of the
remaining labours as the production increased and since they were paid
on piece-rate bases. Their salaries proportionality increases.
Fair wage: - It is that wage which is above the minimum wage but below the
living wage. According to the committee on fair wages, 1948, fair wage
should be determined taking the following factors into account:
Wage Boards
The wage boards take the following factors into consideration for
fixing and revising the wages in various industries apart from the normal
ones:
a) job evaluation
b) wage rates for similar jobs in comparable industries
c) existing levels of wage differentials and their desirability
d) Government’s objective regarding social justice, social equality, economic
justice and economic equality.
e) Need for incentives, improvements in productivity, etc
The wage boards fix and revise the various components of wages like
Basic Pay, DA, incentive earning, overtime pay, house rent allowance, and all
other allowances.
Pay Commissions
Wage differentials