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Wages and Salary Administration

refers to the establishment of implementation of sound policy and practices of employee compensation . It includes such areas as job evaluation, survey of wages and salaries analysis, development and maintenance of wage structure, establishing rules for administrating wage payments, incentives, profit sharing, wage changes and adjustments, supplementing payments, compensation costs and other related areas.

Purposes Eliminates inequalities Minimizes chances of favoritism Establishes sequences of jobs and lines of promotions Increases employees motivation and morale To plan and control labor costs To explain basis of wage payment To reduce frustration and grievances to attract qualified personnel

Components Of Employee Remuneration

Remuneration financial
Hourly and Monthly Rated Wages Salaries NF

Fringe Benefits Job Contents Incentives PF Perquisites Individual plans Gratuity Company car Job Group plans Medical care Club Responsibilities Accident relief Membership Health and Paid holidays growth Group Furnished house prospects Insurance etc etc.

Influencing factors of Remuneration


External Labor Market Cost of living Government Norms

Internal Business Policy Job evaluation and performance appraisal

Devising a Remuneration Plan

Job Description Job Evaluation Job Hierarchy Pay Survey Pricing Job

Concepts of Wages Primary Compensation

Supplementary Compensation
Minimum Wages

Fair Wages

Methods of Wage Payment

Time Wage System: Wages are paid on the bases on time spent on the job. The unit time may be a day week a fortnight or a month Advantages: Workers can easily compute their own remuneration Earnings of workers are regular & fixed Disadvantages: Doesnt provide incentives for the better performance No distinction between efficient & inefficient workers

Suitable where units of output is not measurable like mental work or office work.

Piece Wage Rate: Remuneration is based on the amount of work done or output of the workers. One unit of output is considered as one piece & specific wages are given as per one unit. Advantages: Ambitious workers get proper utilization of their talent Its a fair method Management can distinguish between efficient & inefficient employees Cost of labor per unit of output can be easily counted Drawbacks: Excessive speed of work leads to health problems

Wage Policy in India

Payment of Wages Act 1936 Minimum wages Act 1936 Industrial Dispute Act 1947 Equal Remuneration Act 1976

Payment of Bonus Act 1965