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By REGITH.R
2010-2012 MES College marampally
Dearness Allowance
It is an additional payment over & above the basic Salary for meeting the high cost of living. OR It is a payment towards the rise in cost of living, which is calulated based on cost of living index
The dearness allowance is a part of the total compensation a person receives for having performed his or her job. D.A. is a percentage of the original salary. The percentage is reviewed and may be changed on a sixmonth cycle
DA FIXATION PROCESS
Appoint committee or commission Committee analyzes CPI increase Neutralize old DA with Basic Consider 1 DA for every change of 4 points
System of payment of DA
Two system of he payment of DA are mostly used.. 1)LINKED WITH PRICE INDEX a)Flat rate. b)Graduated rate. 2)NOT LINKED WITH PRICE INDEX
a) FLAT RATE
In this system management analyzes the impact of the price increase on the real value calculations and after discussing with union, decides a flat rate or a fixed rate(Rs 20,40.) to be paid to the workers and staff, irrespective of their pay scale. ADVANTAGE-It is very simple and gives greater relief to the workers and staff with an assurance of an additional amount they will get if there is a price increase
IMPACT OF DA
DA, as an essential component of compensation, is linked with CPI and is highly injurious to the financial stability of the organisation. ADVANTAGE- It will increase the morale of the employees. It will some times provide much productivity to the company. Employers can make a good terms with trade unions and employees.
IMPACT OF DA
DISADVANTAGE It will affect the financial stability of the organization seriously. Chance of strikes, lay off etc
Cntn.
175.91-115.76*100/115.76 Ans -51.966