Professional Documents
Culture Documents
Meaning
• Dale S Beach:
Wage and salary administration refers to the establishment and
implementation of sound policies and practices of employee
compensation. It includes such areas as job evaluation, surveys
of wages and salary, analysis of relevant organisational
problems, development and maintenance of wage structure,
establishing rules for administrating wages, wage payment,
incentives, profit sharing, wage changes and adjustments,
supplementary payments, control of compensation costs and
other related items.
Objectives
• External • Internal
Demand and supply Ability to pay
Cost of living Job requirements
Trade union’s bargaining Managerial strategy
power The employee (performance,
Government legislation seniority, experience,
Social factors potential, luck)
Economy
Technological development
Prevailing market rates
Wage and salary determination process
1. Job evaluation
2. Conduct the salary survey
3. Group similar jobs into pay grades
4. Price each pay grade
5. Fine-tune pay rates
- developing rate ranges
- correcting out of line rates
6. Wage administration rules
Methods of wage payment
A. Time wage system
Wages are paid according to the time spent by the workers
irrespective of his output of work done.
Earnings = Time x rate
Suitability:
1. When productivity cannot be measured
2. When quality of products is important
3. When employees do not have control over production
4. When close supervision is possible
5. Where work delays are frequent
Time wage system
Merits:
1. Simple
2. Guaranteed minimum wages
3. Better quality of goods
4. Support of unions
5. Beneficial for beginners
6. Less wastages
Demerits:
1. No incentive for efficiency
2. Difficulty in determining labour cost
3. More supervision required
Methods of wage payment
Demerits:
1, No guaranteed minimum wages
2. Poor quality of goods
3. Deterioration of health
4. Opposition from unions
Piece wage system
3. Living wage
a dynamic concept which grows with the growth in national
income.
Factors:
- Basic amenities of life
- efficiency of worker
- satisfy social needs of workers
Wage differentials
• Types:
1. Occupational differentials
2. Inter firm differentials
3. Inter-area differentials
4. Inter-personal wage differentials