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



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

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