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    MOD.4-India-Wage and Salary Structure

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    Aman Dhawan
    The document discusses components of pay structure in India such as wages, basic wage, and dearness allowance. It defines wages and lists some examples. Basic wage is decided based on factors like skill, experience, job difficulty, training needed, responsibilities, and hazards. Dearness allowance is provided to help employees deal with increasing costs of living and is linked to consumer price indexes. The document also discusses objectives, principles, and elements of wage and salary administration such as establishing fair pay, attracting and retaining employees, controlling costs, improving motivation, and relating compensation to performance. Finally, it covers reasons for wage differentials between jobs, areas, firms, and other factors.

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    Download as PPT, PDF, TXT or read online from Scribd

    MOD.4-India-Wage and Salary Structure

    Uploaded by

    Aman Dhawan
    102 views20 pages
    The document discusses components of pay structure in India such as wages, basic wage, and dearness allowance. It defines wages and lists some examples. Basic wage is decided based on factors like skill, experience, job difficulty, training needed, responsibilities, and hazards. Dearness allowance is provided to help employees deal with increasing costs of living and is linked to consumer price indexes. The document also discusses objectives, principles, and elements of wage and salary administration such as establishing fair pay, attracting and retaining employees, controlling costs, improving motivation, and relating compensation to performance. Finally, it covers reasons for wage differentials between jobs, areas, firms, and other factors.

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    © Attribution Non-Commercial (BY-NC)

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    The document discusses components of pay structure in India such as wages, basic wage, and dearness allowance. It defines wages and lists some examples. Basic wage is decided based on factors like skill, experience, job difficulty, training needed, responsibilities, and hazards. Dearness allowance is provided to help employees deal with increasing costs of living and is linked to consumer price indexes. The document also discusses objectives, principles, and elements of wage and salary administration such as establishing fair pay, attracting and retaining employees, controlling costs, improving motivation, and relating compensation to performance. Finally, it covers reasons for wage differentials between jobs, areas, firms, and other factors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    102 views20 pages

    MOD.4-India-Wage and Salary Structure

    Uploaded by

    Aman Dhawan
    The document discusses components of pay structure in India such as wages, basic wage, and dearness allowance. It defines wages and lists some examples. Basic wage is decided based on factors like skill, experience, job difficulty, training needed, responsibilities, and hazards. Dearness allowance is provided to help employees deal with increasing costs of living and is linked to consumer price indexes. The document also discusses objectives, principles, and elements of wage and salary administration such as establishing fair pay, attracting and retaining employees, controlling costs, improving motivation, and relating compensation to performance. Finally, it covers reasons for wage differentials between jobs, areas, firms, and other factors.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    of 20

    Amity Global Business School, Noida

    AMITY GLOBAL BUSINESS

    SCHOOL
    MBA, Semester 1

    Human Resource Management


    Ms. Mamta Chawla
    1

    Amity Global Business School, Noida

    Designing and Administration of Wage and Salary Structure


    1. Components of Pay Structure in India 2. WAGE DIFFERENTIALS

    Amity Global Business School, Noida

    Components of Pay Structure in India


    1. Wages 2. Basic Wage 3. Dearness Allowance (DA)

    Amity Global Business School, Noida

    Payment of Wages Act, 1936 Section 2 (vi) any reward of settlement and production bonus, if paid, constitutes wages. Minimum Wages Act, 1948, retrenchment compensation, payment in lieu of notice and gratuity payable on discharge constitute wages. Wages- The amount paid by the employer for the services of hourly, daily, weekly, fortnightly to employees

    1. Wages

    Amity Global Business School, Noida

    WAGES Contd
    Remuneration of following kind do not constitute wages under any of the acts: (i) Bonus or other payments under a profitsharing scheme which do not form a part of contract of employment of a workman. (ii) Value of any house accommodation, supply of light, water, medical attendance, travelling allowance, or payment in lieu thereof or any other concession.

    WAGES Contd
    III.

    Amity Global Business School, Noida

    IV.

    V.

    Any sum paid to defray special expenses entailed by the nature of the employment of a workman Any contribution to pension, provident fund, or a scheme of social security and social insurance benefits Any other amenity or service excluded from the computation of wages by general or special order of an appropriate governmental authority

    Amity Global Business School, Noida

    2. Basic Wage
    Recommended by the Fair Wages Committee (1948) and the 15th Indian labour Conference (1957) Awards by wage tribunals, wage boards, pay commission report and job evaluations serve as guiding principles in determining basic wage.

    Amity Global Business School, Noida

    (i) (ii) (iii) (iv) (v) (vi)

    Basic wage is decided on the basis of following criteria: Skill needs of the job; Experience needed; Difficulty of work: mental as well as physical; Training needed; Responsibilities involved; Hazardous nature of job.

    Amity Global Business School, Noida

    3. Dearness Allowance (DA)


    Allowances paid to employees in order to enable them to face the increasing dearness of essential commodities. Serves as cushion, a sort of insurance against increase in price levels of commodities In India DA is linked to three factors: (i) All India consumer price index (AICPI) (ii) Time factor (iii) Point factor

    Amity Global Business School, Noida

    WAGE AND SALARY ADMINISTRATION


    The term compensation administration or wage and salary administration denotes the process of managing a companys compensation program. The goals of compensation administration are to design a cost-effective pay structure that will attract, motivate and retain competent employees.

    Amity Global Business School, Noida

    Objectives
    To establish a fair and equitable remuneration offering similar pay for similar work To attract qualified and competent personnel

    Amity Global Business School, Noida

    Contd

    To retain the present employees by keeping wage levels in tune with competing units To control labour and administrative costs in line with the ability of the organization to pay To improve motivation and morale of employees and to improve union-management relations To project a good image of the company and to comply with legal needs relating to wages and salaries

    Amity Global Business School, Noida

    Principles

    1. Should be sufficiently flexible 2. Job evaluation must be done scientifically 3. It must be always consistent with overall organizational plans and programs

    Amity Global Business School, Noida

    Principles Contd

    4. It should be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflationary trend 5. It should be responsive to the changing local and national conditions 6. These plans should simplify and expedite other administrative process

    Amity Global Business School, Noida

    Elements
    Wage and salary systems should have a relationship with the performance, satisfaction and attainment of goals of individual. Wage and salary system has following elements (Henderson): 1. Identifying the available salary opportunities, their costs, estimating the worth of its members, of their opportunities and communicating them to employees. 2. Relating salary to needs and goals 3. Developing quality, quantity and time standards related to work and goals 4. Determining the effort necessary to achieve standards 5. Measuring the actual performance

    Amity Global Business School, Noida

    WAGE AND SALARY ADMINISTRATION Contd


    6. Comparing the performance with the salary received 7. Measuring the job satisfaction of the employees 8. Evaluating the unsatisfied wants and unrealized goals aspirations of the employees 9. Finding out the dissatisfaction arising from unfulfilled needs and unattained goals 10. Adjusting the salary levels to help employees reach unleashed goals and fulfill the unfulfilled needs and aspirations

    Amity Global Business School, Noida

    WAGE DIFFERENTIALS
    Differentials in wages are inevitable in any industry. Wage differentials perform important economic functions like labour productivity, attracting the people to different jobs. Since workers are mobile with a view to maximizing their earnings, wage differentials reflect the variations in productivity, efficiency of management, maximum utilisation of human force

    Reasons for Wage Differentials


    Amity Global Business School, Noida

    Wage Differentials Interpersonal differentials Inter occupational differentials Inter area differentials Inter firm differentials

    Reasons Differentials in sex, skills, age, knowledge, experience Varying requirements of skill, knowledge, demand supply situation Cost of living, ability of employers to pay, demand and supply situation, extent of unionisation Ability of employer to pay, employees bargaining power, degree of unionisation, skill needs, etc

    Amity Global Business School, Noida

    The term 19500-600-23700 known as pay scale or pay grade. It shows the salary as well as the increment.

    21

    Amity Global Business School, Noida

    current salary is Rs. 18000 with an Annual increment of Rs. 500/-. When the salary Reached Rs. 19500/- than its annual increment will be Rs. 600/- as shown in payscale i.e. 19500-600-23700 and here the next level is Rs. 23700/when the salary reached Rs. 23700/- than what ever the next increment stated will be applied.
    22

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