Wage and Salary Administration
Wage and Salary Administration
Wage and Salary Administration
INTRODUCTION
Wage and Salary administration has an important bearing on workers,
organizations, government and society. The mechanics of wage determination
based on the element of adhocism has been the source of legitimate concern and
anxiety to the workers. This mechanism, apart from being adhocistic in nature is
also based on the principle of irrationality and other unscientific factors. Wage
differential also exist on the basis of sex, region and other such artificial
considerations. It is an administrative procedure of establishing and supervising
wage levels and operations in an organization. In most organizations, wage and
salary administration is performed in the personnel department, although larger
organizations often have a payroll or wage and salary administration department.
Meaning
Salary
Compensation
A comparative term- includes wage and all other allowances and benefits
like allowances, leave facilities, housing, travel and non-cost such as recognition,
privileges and symbols of status.
• 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.
Factors influencing Wages and Salary
• Wage policy of the company - The company may have a policy to fix the
wages externally competitive and internally compatible, i.e. they pay
according to the competition and maintain equity among various employees
in the company. Sometimes the company may have a wage policy that it
should be above the industry average or below it or comparable to it.
Minimum 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.
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: