CONCEPT OF WAGE & SALARY ADMINISTRATION By, Amit Wani Roll No.:- 58
Definition of Wages & Salary • Base wages and salaries are defined as the hourly, weekly and monthly pay that employees receive for their work in and Organization
Principles Governing Compensation Administration • • • • • • •
Maintaining Equity Maintaining Competitiveness Matching Employee Expectations Reinforcing positive employee behavior Eliminating any discrepancies Devising a system that is most efficient Optimization of management and employee interests • Maintaining good IR and harmony
Purpose of Wage & Salary • • • •
Attracting talented resources Retaining and motivating employees Financial Management Legal Requirements
Concepts of Different Wages MINIMUM WAGES • It is amount of remuneration, which is just sufficient to enable an average worker to fulfill all his obligations. • It is applicable to workers across the country and is governed by the Minimum Wages Act 1948 • The law states that an employer who cannot pay the minimum wage has no right to engage labour and no justification to run a firm • The current minimum wage in India is Rs. 66 per day to all the workers in scheduled employment • It is revised every 5 yrs
Concepts of Different Wages FAIR WAGES • Workers performing work of equal skills, difficulty or unpleasantness should receive equal or fair wages • The basis of fair wage is the minimum wage, within the capacity of the organization to pay • Fair wage should be related to the productivity of the labour • It should match the prevailing rates of wages in the same or neighboring localities • It should reflect the level of national income and its distribution
Concepts of Different Wages LIVING WAGES • Living wages should enable the male earner to provide for himself and his family, not only the bare essentials of food, clothing and shelter, but also a measure of frugal comfort including: ▫ ▫ ▫ ▫
Education for the children Protection against ill-health Requirements of essential social needs A Measure of insurance against the more important misfortunes including old age