PAYMENT SYSTEM IN GERMANY

Group Members Nishi Shweta Shivani Kapoor Abhishek Anat Komal varanjani Deepak Snehi Tapas Kumar

What is Wage Payment System?

Wage payment system consists of the pay structures and methods used to motivate and reward work force for their contribution to the goals of the organisation.

Trade Union Structure

Federal Republic of Germany also known as Deutscher Gewerkschafts Bund(DGB),has a rational trade union structure. It is an umbrella organisation for 16 German trade union groups on an industrial basis. In total it represents about 8 million workers. The DGB fulfils its statutory task of ensuring the processing of domestic and international payments. Both DGB and BDA(an employer organization) issues guidelines for the co-ordination of wage movements

Collective Bargaining

The right of collective bargaining is legally guaranteed. Collective agreements do not need government approval but have to be reported to the Federal minister of labour. Negotiations can be conducted on an industry wide or national basis. Both sides, the employer and employee, are obliged to maintain Social Peace during the time of collective agreement. It usually lasts for 1-2 years and outlaws to industrial action or lockouts.

Payment System

Minimum wages except for construction workers, electric workers, painters and letter carriers are set by collective bargaining. There is no legal minimum wage as such but agreements usually lay down minimum wages and working conditions. It normally includes provision for conciliation undertaken by labour courts at local provincial or Federal level. Rates of pay vary widely. They are according to industry,area and degree of organisation.

Highest Paid Groups

Printing and Publishing Chemicals Petroleum Automobiles Iron and Steel Metallic Ore mining Coal Metal manufacture

Lowest Paid Groups

Food Manufacture Clothing Furniture Transport Recent agreements have tended to give priority to the lower paid sections. German unions are as much concerned with the raising of status of workers through co-determination system (MITBESTIMMUNG) as with the physical size of the pay packet.

Co-determination is a practice whereby the employees have a role in management of a company.

Fringe Benefits

Fringe benefits represent an important part of remunerations and adds more than 50 percent to wages. The gap between the pay of weekly and monthly paid workers has progressively been narrowed except for the category of senior salaried employees. Overtime rates are usually about 25 percent above the basic rate and are higher for those working on sundays or on public holidays. Companies provide canteen and transport facilities and in some case subsidised housing. Profit sharing schemes are widely operated. There is a growing tendency for group bonus schemes, which is done to replace systems of payment by results.

Equal payment system

At first there was a gap in payment done to men and women, owing to the nature of womens work pattern. In 1971, in FRG, the average of womens earnings in manufacturing represented only 70 percent of those of men.

Germany is bound by the Treaty of Rome and by its own constitution to provide equal pay for men and women