Wages and salaries administration

By: Sheeba Rehman

Compensation management
 Compensation is what employees receive in exchange for their contribution to the organisation.
Total compensation = Direct + Indirect Compensation

Base Pay

Incentives

Benefits

Components of employee remuneration

Remuneration Financial Basic wages Incentives, Individual plans Group plans Non-financial

Job context Challenging job Responsibilities Fringe benefits Growth prospects P.F. Supervision Perquisites Medical care Working conditions Car Accident relief Job sharing etc Club membership Health and Paid holidays Group insurance Furnished house Stock option scheme

Concepts of Wages
 Minimum Wages  Fair Wages  Living wages

Objectives of compensation planning

 Internal equity  External equity  Individual equity  Attract talent  Retain talent  Ensure equity  New and desired behavior  Control costs  Ease of operation

Motivation and performance model

Feedback to employees Employees set Goals and expectations Rewards are given Employee considers Equity of Performance rewards

Performance Is rewarded

Employee sets new goals and Expectations based on prior experiences

Importance of an ideal remuneration system

Desire for more pay performance strikes grievances search for options

absenteeism turnover

Pay dissatisfaction lower attractiveness of jobs job dissatisfaction absenteeism psychological withdrawal visits to the Doctor poor mental health

Influencing factors of Remuneration

Remuneration External
Labour Market Cost of Living Labour Unions Govt. Legislations Society Economy

Internal
Business Strategy Job evaluation & PA The Employee

Devising a remuneration plan

Job Description Job Evaluation Job Hierarchy Pay Survey Pricing Jobs

The Development of a wage trendline

New key Job B 10 9 Wages 8 or salaries 7 6 5 4 100 200 300 400 500 600 700 800 900 1000 Point Values Key Job A

Wage-trend Line

Challenges of remuneration
Skills-based pay Salary reviews

Remuneration Employee participation Comparable worth

Pay secrecy

Wages Policy in India

 Payment of Wages Act, 1936  Industrial Dispute Act, 1947  Minimum Wages Act, 1948  Equal remuneration Act, 1976  Payment of Bonus Act, 1965  Wage Board

Fringe Benefits (golden handcuffs)

 Bonus  Social security  Medical  Canteen  Gratuity  Pension  Workmens Compensation  Retirement benefits

Objectives of fringe benefits

 To create and maintain sound Industrial relations  To boost up employee moral and motivate them by identifying and satisfying their unsatisfied needs  To create sense of belongingness and retain them  To improve the quality of work life  To provide security to employees against social risk like old age  To protect the health of employees and provide safety against accident

Types of fringe Benefits

 Payment for time not worked: Sick leave with pay,
paid rest, paid lunch time, vacation pay, travel time, grievance time

 Extra-pay for time worked: Bonus, old age insurance,

profit sharing, housing subsidy, festival bonus

 Health protection: Accident insurance, disability

insurance, health insurance, life insurance, sick leave, medical care

 Old age and retirement: Pension, gratuity, medical

benefit for retired employees, travelling concession, job to son or daughter

 Legal payment : unemployment/ lay-off compensation,

employees insurance, old age benefits under social security