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WAGES AND SALARY

ADMINISTRATIONHOSPITAL

HELLO
!
I am Dr. Anamika Gupta

Learning Objectives
All forms of
financial
return,
tangible
services and
benefits that
employees
receive as
part of their
employment
relationship

Nature and importance of compensation in HR department

Various components of compensation

Difference between Wage and Salary

How Compensation is determined

Payment of Wages Act, 1936

Role of HRM in
compensation
Lets start with the first set of slides

Wage and Salary administration is a pivotal function of


HRM

Majority of union-management problems And disputes


relate to the question of wage payment

Fair and equitable compensation should be the


objective of wage and salary program

Payment made to compensate labour for the work


done is wages.

Money paid periodically to persons whose output


cannot be easily measured, such as clerical,
supervisory and managerial staff is termed as salaries
(generally paid on monthly basis)

Compensation Program Objectives:


Organisation

Attract and keep the desired quality and mix of


employees

Motivate employees to continually improve their


performance and to strive to achieve the
organisations strategic business objectives

Reinforce the key values and the desired


organisational culture

Drive and reinforce desired employee behaviour

Ensure compensation is maintained at the desired


competitive level

Ensure optimum value for each salary rupee spent

Comply with legal requirements

Compensation Program Objectives: :

Employee

Give the employee equitable treatment

Accurately measure and appropriately reward the


employees performance and contribution

Provide appropriate compensation changes


comparable to that prevailing in the community for
similar work

Provide regular compensation and performance


reviews

Employers

Employees

Fair and equitable to al


Employees.

Basis for understanding


the hospitals policies
concerning wage levels,
structures and ranges

Basis for establishing,


developing and
maintaining good Inter
Relation
Guide for
administrative action
for wages an salaries
Basis for facilitating
control over
expenditure on wages
and salaries

Clarifying opportunities
for development channels for
promotion
Greater job satisfaction,
feeling of security, help
attain his objectives

Patients

Better service by hospital employees

Lower hospitalization cost from a higher


degree of employee efficiency

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Factors that
Influence
Determinatio
n of
compensatio
n

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Steps for
the process
of job
evaluation

Selection of a representative committee( HRM, nursing


director, HOD of paramedical dept., maintenance
engineer and one medical personnel)

Agreement on the objectives to be attained and jobs


to be covered

Job analysis

Comparison of one job with the others

Arrangement of jobs in their proper sequence

Salary survey in the industry and the region

Assignment of rates to each job

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Wage and
salary
administratio
n program

Developing fundamental policies

Building the wage and salary structure

Job assignments

Developing compensation procedures

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Developing fundamental policies


-HospitalFactors:

Existing labor legislation

Article 39 of constitution: equal pay for equal work for


both the men and women

Article 43-a: living wage and conditions of work to


ensure decent standard of life, leisure, social and
cultural opportunities for all workers

The Minimum Wages Act, 1948-state to regulate


minimum wages, review every 5 years

The Payment of Wages Act, 1936-regular and prompt


payment of wages, prevent exploitation by arbitrary

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Wages and salaries paid for similar work in the


community- to improve efficiency and better quality of
work

Regulations established by employees and their unions


/ associations through negotiations

The hospitals financial position

Availability of qualified hospital personnel

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Building the wage and salary structure

Establishing the jobs to be performed-

contents, duties, responsibilities: positions, contents of


each positions, positions having essentially the same
content grouped under same job title

Methods for collecting information; review of pay-role,


work questionnaire, interview, direct observation

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Analyze each job to determine standards of performance and


the qualities which the person should possess- list of items

Job title
The no. of positions commonly carried on the pay-role in
each job classification
Depts. In which positions in this job classification are found
Work performed, Supervision
Level of efficiency
Hours, shifts, standard of performance
Job combinations
Working conditions, mechanical requirements
Special performance demands

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Evaluate job to determine relative value in relation to all


other jobs performed in the hospital. Four common
methods of evaluation of jobs;

Ranking Method

Classification method

Factor comparison method

Point systems

Classify jobs into groups which possess similar


characteristics and establish wage level for each group

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Job Ranking

A job evaluation method that sizes jobs on the basis of


job titles and job content by placing them in rank
order from sweeper to chief executive officer
Quick, easy and well-established method

Subject to bias

Can be effective in a small hospital where a limited


number of jobs are being rated

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Job Grading or Classification

The first step is to use a number of job-related


factors such as education, experience and
responsibilities to determine classes or grades of jobclerical, technical, Nursing etc.

The next step is to create generic or benchmark job


descriptions for each grade or class

Individual jobs are classified in relation to the grade


descriptions

Degree to which following conditions are presentedimportance of job

Supervision/ leadership of subordinates

Initiative and resourcefulness

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Factor comparison method

Selection of certain factors common to all jobs

Selection of certain key jobs

Arrangements of key jobs on the basis of each of the


factors previously chosen. Rank assigned

Comparison of all other jobs with the key jobs and the
assignment of them under each factor used and the
consideration of these ranks in establishing an overall
evaluation of each job as compared to others

Five standard factors: mental effort, skill, physical


requirements, responsibility and working conditions

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The Point System

Widest application. For both clerical and manual skill


positions

This system involves quantifying a set of job factors


by allocating points to each factor education,
experience, responsibility, work conditions, etc.

Typically, each factor is divided into a number of


levels, each with a specific definition.

Can be time consuming, expensive and difficult


subjective considerations

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Considerations beyond job evaluation

The prevailing rates in the region where hospital is


situated

Custom within the hospital

Assignment of higher responsibility to a particular job


in the interest of the hospital

Raising the salary level in a given position to attract


potential candidates

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Compensatio
n
components

Dearness allowance

Provident fund

Overtime

Basic pay

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How are pay levels determined


Compensation Administration

The process of determining a cost-effective pay


structure that will attract and retain employees,
provide an incentive for them to work hard, and ensure
that pay levels will be perceived as fair

The primary pay determination is the kind of job.

The higher skills, knowledge, and abilities needed in


the job>> the greater responsibility and authority>>
the higher the pay

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Many organizations are using alternative approaches to


determine compensation including:
Skill-based Pay

A pay system that rewards employees for the job


skills and competencies they can demonstrate

Variable Pay

A pay system in which an individuals compensation is


contingent on performance

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Why do org. offer employee benefits

Nowadays, organization has to look further than just


designing a compensation system and annual salary

Employee Benefits

Nonfinancial rewards designed to enrich employees


lives

Many organizations legally required to provide social


security, life and disability insurance, retirement
programs, and health insurance.

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The Payment of Wages Act, 1936


Object of the Act

The object of the Act is to regulate the payment of wages to


certain classes of persons employed in industry in a particular
form and at regular intervals ; and to prevent unauthorized
deductions from the wages.

The Act is concerned merely with the fixation of wage periods and
not with fixation of wages.

Obligations of the management:

Fix a time to pay wages, not longer than a month


The management must pay within 7 days of the wage period if the
no. of employees are less than 1000. in case the number of
employees is more than 1000, wages must be paid within 10 days
Payment to be made on working day within working hours
By cheque if employee consents
the payment should be made in full without any deductions except
those authorized by law

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Deduction From Wages

(A) Concept of Deduction

The following should be deemed to be deduction from


wages:

Every payment made by the employed person to the


employer or his agent.

Any loss of wages resulting from the imposition, for


good and sufficient cause, upon a person employed.

(B) Deductions which may be made from Wages:


Fines
Deductions due to absence from duty

Deductions for damage to or less of goods expressly


entrusted to employed person for custody, or for loss
of money for which he is required to account, where
such damage or loss is directly attributable to his
neglect.

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Deduction for house-accommodation supplied by the


employer .

Deductions for such amenities and services supplied


by the employer as the State Govt. or any other officer
specified by it in this behalf may, by general or special
order.

Deductions for recovery of advances & loans.

Deductions of income-tax payable by the employed


person.

Deductions for the payment to co-operative societies


approved by the state govt. or any other officer
specified by it.

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Deductions made with the written authorization of the


person employed for the payment of any premium on
his life insurance policy to the LIC Act, 1956.

Deductions made, with the written authorization of


employed person, for the payment of his contribution
to any fund constituted by the employer or a trade
union registered under the Trade Union Act, 1926 for
the welfare of the employees and their families.

Deductions made with written authorization of the


employed person, for contribution to the Prime
Ministers National Relief Fund
By order of court.

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THANKS
!

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