Professional Documents
Culture Documents
Wages and Salary Administration: Project Report On
Wages and Salary Administration: Project Report On
SUBMITTED BY
JUNE 2011
ACKNOWLEDGEMENT
A project can never attain its final destination without the support, encouragement and
motivation of the individuals who are related to the one who undertakes the project
work.
I take this opportunity to express my sincere thanks and gratitude to MR. UTTAM
DAITHANKAR, for giving me this opportunity to work in this project and guiding me
I would like also to thank the entire respondent for giving me there precious time and
relevant information and experience I required, without which this project would have
Ashleen Anand
i
INDEX
is The Study of Salary and Wage Administration. The objective of the study is to
The study was conducted to know the structure and salary provided by the Company
to its employees. In this project, I studied about the present salary compensation of
EPCOS along with the evaluation of the incentives, bonus, and allowances given to
the employees.
I also studied the execution of Provident Fund, Gratuity, and Encashment of leave for
the final payment of the employee when he/ she leave the company. During the course
of project, I got the clear idea about the salary structure and about the overall
Introduction:
1
The payment of wages and salary is an inbuilt system with human force for their
activity performed. To what extent the payment of wages & salary is reasonable and
adequate in consonance to the nature of the work performed, is a question mark. The
reason attributed, is the existence of very large labour force and availability of
abundant work force whether it is a farm sector of industrial sector. The supply of
labour is more then the demand and with the result there is exploitation of cheap
labour policy. Later the advent of trade unionism helped to improve the working
conditions of labour. Until the Second World War, event the Government adopted a
LAISSEZ FAIRE policy in this regard. It was as late as in 1947, that the
of (1) Central and State Govt. (2) Employers, and (3) Employees, which resulted in
the industrial trade resolution. It was realized that increase in production was not
possible without the fullest cooperation between management and labour. This led
to appointment of the fair wages committee and profit sharing bonus committee.
Wages Vs Salary:
to persons whose output cannot to be easily measured, such as clerical staff as well
as supervisory and managerial staff, is referred to as salaries. Salaries are thus paid
generally on a monthly basis and at the times the elements of incentive is introduced
in the form of commission, for e.g. paid to salesmen in addition to their salaries.
However, it is in area of labour that there are several types of methods of wage
2
In case of worker, the wages are depend generally on the rates of wages which may
be barely rate or time rate or leased on a piece rate, that is, dependent on workers
output. There are also various combinations of not only time & piece rate systems,
but also several premium plans adopted with a view to incorporate the incentive
element and motivate the worker. In addition, there are collective wage payments
also.
Under this system, the work is paid a certain sum for a fixed period of time that is
so much per hour or per day or month. The main advantages under this system are
the followings:
I. It is simple in calculation
II. The worker does not rush the job and spoil the quality through a temptation
of earning more
I. The worker being assured of a fixed payment for the time spend is not
extra effort.
II. The superior worker often tries to protect his slower colleagues by the
is paid the same amount. He therefore slackens off over a period time.
3
The piece wage system:
In this system, the worker is paid a fixed rate per unit produced or job completed.
The rate is normally developed on the basis of analysis of previous performance and
forth his best efforts. This results in increased productivity, which benefits
III. The superior worker is induced to work hard as at the end of the period he
IV. In his effort to produce more, the worker may disregard the spoiling of his
V. It is paid merely on the basis of the number of items produced without regard
VI. This system may result in excessive fatigue as the employee tries to work his
4
Premium Bonus Method:
As in the piece wage system, the employee is not guaranteed any minimum wage
in case the supply of labour is abundant, the piece-wage rate could be so lowered
as to lead to sweating and other evils. Because of this, trade unions began to object
the piece-wage system. They pressed for a guarantee of a fair minimum wage in
5
CHAPTER 2: COMPANY PROFILE
HISTORY:
uniquely broad product portfolio and truly global presence have made EPCOS a global
6
market leader in products that account for 60 percent of our sales. A further 30 percent
EPCOS was floated simultaneously on the Frankfurt and New York Stock Exchanges
on October 15, 1999. The listed company emerged from Siemens Matsushita
the low trading volume, EPCOS has decided to delist and to deregister from the New
York Stock Exchange in November 2007. Since March 2003, EPCOS has been one of
EPCOS
CORPORATE CHARTER
7
1. Vision: The aim of EPCOS India Pvt. Ltd is to make the name EPCOS
investors alike.
and modules. These products process electronic signals, control power supplies and
3. Goals: The Company wants to generate lasting profits and constantly increase
shareholder value. It wants to be a leader in every market that we serve. Their success is
strength.
customers more competitive is their top priority. The personal commitment of every
5. Cost and Process Competence: They are continuously improving their work
processes and working hard to keep cutting our cost while increasing their speed and
reliability.
8
6. Innovative Strength: They create innovative products that provide new solutions
for their customers and help to strengthen existing or establish new business
7. Investor Orientation: EPCOS shareholders provide the capital for and are the
owners of their company. They do their utmost to maintain and increase shareholder
value.
8. Employee: Their employees are their most precious assets. Their resourcefulness,
competence, motivation and drive are essential to their companys success. They are
employees.
QUALITY POLICY
It is their endeavour to make the name EPCOS synonymous with world leadership in
9
employees through customer orientation, innovation cost consciousness and continual
QUALITY OBJECTIVES
Innovation: Shaping constantly their innovations for the benefits of their customers by
Cost Consciousness: Opening to new approaches and constantly cutting their cost.
Above objectives are quantified by individual functions and measured and reviewed to
PRODUCT PORTFOLIO:
DC Capacitors
10
AC Capacitors
MARKET POSION
In the field of electronic components and modules EPCOS regard itself as number 2
ORGANIZATIONAL CHART
PERSONNEL
MANAGEMENT DIRECTOR
11
GENERAL MANAGER
MANAGEMENT
MANAGER SECRETARY
SENIOR
EXECUTIVE
12
CHAPTER 3: OBJECTIVES OF THE STUDY
2. To know the satisfaction level of the executives and the workers regarding the
3. To know the satisfaction level of the salary distribution process carried out in
EPCOS.
13
CHAPTER 4: INTRODUCTION TO THE TOPIC
DEFINITION OF COMPENSATION
tool because
and practices.
OBJECTIVES OF COMPENSATION:
The objectives of any payment systems are numerous and might include the
following:
acceptance;
8. To raise morale and increases efficiency of the staff and finally keeping
them contended.
14
TYPES OF COMPENSATION:
and/or indirect in the form of non-monetary benefits known as perks, time off, etc.
Compensation does not include only salary but it is the sum total of all rewards and
productivity.
1. Direct Compensation
2. Indirect Compensation
15
COMPENSATION MANAGEMENT
Medical Hospitalization
Reimbursement
Insurance
House Rent
Allowance
Flexible Timings
Conveyance
Leave Travel
Allowance
Bonus
Special
Allowance
Overtime Wage
Retirals Benefits
16
IMPORTANCE OF COMPENSATION:
Compensation and Reward system plays vital role in a business organization. Since,
among four Ms, i.e. Men, Material, Machine and Money, Men has been most
business process such as rent is the return expected by the landlord, capitalist
expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour
motion. The other factors being human, has expectations, emotions, ambitions and
egos.
Therefore a fair compensation system is a must for every business organization. The
An ideal compensation system will have positive impact on the efficiency and
It will enhance the process of job evaluation. It will also help in setting up an ideal
job evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the
The system should be simple and flexible so that every employee would be able to
17
It should be easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, being
Such system would help management in complying with the various labour acts.
Such system should also solve disputes between the employee union and
management.
It should motivate and encouragement those who perform better and should
and employees.
employees.
The perfect compensation system provides platform for happy and satisfied
workforce. This minimizes the labour turnover. The organization enjoys the
stability.
The organization is able to retain the best talent by providing them adequate
The business organization can think of expansion and growth if it has the support
18
INTRODUCTION TO SALARY ADMINISTRATION
What is Salary?
The Roman word salarium linked employment, salt and soldiers, accepting
salt from a person was synonymous with drawing sustenance, taking pay, or being
in that person's service. Soldiers were known to have been paid, and maintain
instead that the salarium was an allowance for the purchase of salt, at that time salt
19
production was strictly controlled by the monarchy or ruling elite. Today, the idea of
a salary continues to evolve as part of a system of all the combined rewards that
employers offer to employees. Salary (also now known as fixed pay) is coming to
be seen as part of a "total rewards" system which includes variable pay (such as
bonuses? incentive pay, and commissions), benefits and perquisites (or perks), and
various other tools which help employers link rewards to an employee's measured
From the point of view of running a business, salary can also be viewed as the cost
of acquiring human resources for running operations, and is then termed personnel
managers and professional and technical staff. In any organization, salaries and
Wages are the remuneration paid by the employer for the service of a worker who is
engaged by the hour, days, week or fortnight. Wages are payments to hourly-rated
Compensation refers to all forms of financial returns, tangible services and benefits
20
employees receive as a part of an employment relationship. Compensation may be
received directly in the form of cash (wage, bonus, incentives) or indirectly through
portion of the total costs in most of the organizations and so it requires sound
the amount of control which can be exerted may vary among organizations and
within an organization.
21
Pay can influence employees work behaviours and attitudes. It becomes crucial for
managers to ensure that pay systems are designed and administered in fair and
equitable manner. The salary administration is thus concerned with the monetary or
responsibility for salary administration usually lies with the top management.
1. Control of cost
productivity
22
4. Maintenance of a satisfactory public image
8. To recommend changes in the salary policy and specific raises for executives
at various levels
10. To attract and encourage staff to make full use of their abilities and develop their
potential.
2.1 Introduction: -
2.2 Objective:-
23
To define the procedure for Gross Pay and deduction calculation
2.3 PROCESS:-
Documents are Appointment Letter and PER/01 form which the employee fills
when he joins the organisation. The Relevant Fields for PAMS entry are as follows:
Personal Details
Booking Details
Job Details
Salary Details
Accommodation Details
Family Details
Qualification Details
Other Details
Personnel Executive passes initial appointment Activity for new entrants. This activity
is essential to regularise the employees details in the system. This will ensure to give
salary effect from the date of joining of the new employee. The Path to enter this
activity is:-
24
PAMS Master Maintenance EmployeeActivity Input Other Activity
The reference document for above activity is appointment letter and PER/01. This
Overtime Details
Basic)
25
Attendance Bonus Details
2.3.4 Verification:
calculates standard and non standard salary of active employees based on payment
deduction Tables in system support facility and variable inputs entered. After
After salary processing is over for all the employees, Personnel Executive checks
the processed data thru salary query screen as per inputs given. In case of
correction, Personnel Executive restores the specific employee details and does
26
2.3.7 Creation of General Ledger and Salary Summary: -
Personnel Executive processes GL and then after prepares the salary summary and
General Ledger Report. Personnel Executive verifies the General Ledger. Previous
months and current months salary is compared to ensure correctness. The debit and
credit amounts shown at the end of GL report is checked and ensured that the debit
and credit amounts are same and there is no variance in General report.
In salary summary, Payment and deduction details with Net Salary must be checked.
Also ensure that the Bank Salary, Cash Salary and cheque Payments are considered
Personnel Executive prepares Bank Advise. He then sends this Bank advise to
checks and verifies the bank advise and salary summary before sending it to the
Accounts Department.
27
2.3.10 Generation of Cash Note: -
Personnel Officer prepares Cash Salary Statement. Cash salary details are then sent
Forwarding Letter and deposits cheques, bank List to respective bank to credit the
salary of every employee as per the list provided by the Personnel Officer.
28
Personnel Officer generates the SAP compatible General Ledger Report and sends
Accounts Department verifies and sends the cheques to the respective Bank of the
distribution through Bank. If the employee does not hold any bank account, then his
Salary and wages administration structure of the EPCOS India Pvt. Ltd. mainly
depends upon,
1. Category
2. Grades
29
1. CATEGORY:
Management
Staff
Workmen
Trainees
I. Management:
Management people are the professionals engaged for supervisory work and
This Management Category is classified on the basis of Grades, starting from MC1
to MC9.
II. Staff:
The Staff people are the clerical personnel working in commercial functions, stores.
These include Assistance, senior assistant etc. this category is classified into two
Grades:-
OE1
OE2
30
III. Workmen:
Average age of the workmen is 32 years. These are the operating hands on working
on shop floor for manufacturing activities of the company. Workmen are covered
under labour laws. There are254 workers, the qualifications of these workers are ITI
Vocational Training). All the engaged workmen are recruited after completing one
Workers are members of Nashik Workers Union, registered under the Trade Union
Act 1926 and is representing the permanent monthly rated workmen in Grade S, S0
and S1, in the factory of the company. A settlement dated 26 th October 2007 was in
existence between the parties, i.e. Nashik Workers Union and EPCOS India Pvt.
Ltd.
It is agreed that the total amount of Rs. 3100/- (Rupees Three Thousand One
31
It is agreed between the parties that the quantum of benefits to be distributed over
various heads for a period of three years commencing from 1 st April 2007 and
IV. Trainee:
Trainee is the fresher student coming with the technical stroke commercial
background. These people are engaged to gain hands of working experience. The
company has full fledged training scheme for all these people. The company
offers systematic training plan for all these trainees. The Company recruits
etc. The company offers training to these fresh graduates for the duration of one
year. The company offers stipend and learning allowances to all engaged trainees.
To meet with the needs of educational material and facilities, the company also
offers statutory benefits like Provident Fund and ESIC to the trainees. After all
3. GRADES:
Management
Staff
Worker
32
Trainees
I. MANAGEMENT:
Grade MC1, MC2 and MC3 - Officers and Executive, Senior Executives.
Grade MC4, MC5 and MC6 - Deputy Manager, Manager to Senior Manager
II. STAFF:
III. WORKER:
IV. TRAINEES:
33
Technical Trainees ITI
A. PER MONTH:
Basic
Medical Reimbursement
Supplementary allowance
B. ANNUAL:
Bonus Only for eligible employees, those having basic + DA less than Rs.
10,000
II. WORKMEN:
34
A. PER MONTH:
Basic
Conveyance Allowance
Washing Allowance
Education Allowance
Adhoc Basic
B. ANNUAL:
Bonus
Exgratia
III. TRAINEES:
A) ANNUAL:
Stipend
Learning Allowance
35
1. Mediclaim facility for spouse and parents (For Staff, Management, Workmen)
3. Shoes, Aprons
36
STATUTARY REQUIREMENT
No employer is allowed to pay any employee the compensation, which is less than the
prevailing rate prescribed under the Minimum Wages Act 1948. Compensation to the
Directors of Public Ltd. Companies should be paid according to the provisions of the
Companies Act 1956. Apart from the legislations, following important legal enactments
The Factories Act, 1948 stipulates the amount of compensation to be paid in respect of
overtime work.
37
CHAPTER 5: RESEARCH METHODOLOGY
Introduction:
Research is an art of scientific investigation through search of new facts in any branch
methodology gives the student the necessary training in gathering materials required,
and also training in technique for the collection of data appropriate to particular
and in recording evidences, sorting it out and interpreting it. Knowledge of research
project work. It consists of series of actions or steps necessary to effectively carry out
method.
38
Methods of Data Collection
Data collection is an elaborate process in which the researcher makes a planned search
for all relevant data and is the foundation of all researches. It is the raw material with
which a researcher functions. The task of data collection begins after a research
problem has been defined and research plan is chalked out. While deciding about the
method of data collection to be used for the study the researcher should keep in mind
Sources of Data
A. Secondary data:
Secondary data is the data already collected by others for purposes other than solution
of the problem at hand. In case of Secondary data the nature of data collection work is
1. Internal sources:
Company Records.
Service Reports.
Annual Report.
Company Brochure.
Company Library.
39
2. External sources
Reference Books.
Magazines.
Newspapers.
B. Primary data:
The data that is being collected for the first time or to particularly fulfil the objectives
of the project are known as primary data. In my study work, stratified simple random
Data Evaluation
All the data and information collected from the secondary sources and company
officials was filtered & only relevant data is introduced in the report which helped in
achieving objective of the project. This relevant data is finally evaluated to make the
40
CHAPTER 6: DATA ANALYSIS
The data used for analysis is secondary data through internal sources.
A survey was carried out within the executives and workers of the company itself to
Sample sizes of 30 for each were taken to carry out the survey and following
41
FOR EXECUTIVES
Sr. Questions Not Not Much To Some Quite Fully
No. asked Satisfied Satisfied Extent Satisfied Satisfied
Satisfied
1 Whether the executives
were satisfied with the -
salary distribution process
- -
-
adopted by EPCOS?
2 Whether the executives
were satisfied with the -
allowances given by
-
- -
EPCOS?
3 Whether the executives
were satisfied with the -
facilities given by EPCOS?
- -
-
FOR WORKERS
adopted by EPCOS?
5 Whether the workers were
satisfied
allowances
with
given
the -
by
-
- -
EPCOS?
6 Whether the workers were
satisfied with the facilities -
given by EPCOS?
-
- -
42
I. Whether the executives were satisfied with the salary distribution process
adopted in EPCOS?
Options a b c d e Total
Response 0 3 6 15 6 30
Percentage 0 10 20 50 20 100
Interpretation: - Most of the executives were quite satisfied with the salary
II. Whether the workers were satisfied with the salary distribution process
adopted in EPCOS?
43
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
Options a b c d e Total
Response 0 3 15 6 6 30
Percentage 0 10 50 20 20 100
Interpretation: - Most of the workers were satisfied to some extent with the
III. Whether the executives were satisfied with the allowances given by
EPCOS?
44
Options a b c d e Total
Response 0 3 12 9 6 30
Percentage 0 10 40 30 20 100
IV. Whether the workers were satisfied with the allowances given by EPCOS?
Options a b c d e Total
Response 0 3 18 9 0 30
45
Percentage 0 10 40 30 0 100
Interpretation: - Most of the workers were satisfied to some extent with the
V. Whether the executives were satisfied with the facilities given by EPCOS?
Options a b c d e Total
Response 0 3 9 18 0 30
Percentage 0 10 30 60 0 100
46
Interpretation: - Most of the executives were quite satisfied with the facilities
given by EPCOS.
VI. Whether the workers were satisfied with the facilities given by EPCOS?
Options a b c d e Total
Response 0 3 18 9 0 30
Percentage 0 10 60 30 0 100
47
Interpretation: - To the some extent workers are satisfied with facilities given by
EPCOS.
1. Compensation has major impact coming out of age and experience i.e. more age,
more experience, more CTC. Therefore, more the length if the service, higher the
wages.
48
2. As the industry goes number of settlements, it reaches to saturation point, then the
3. As it matures to saturation point, more benefits come out of facilities and benefits
4. Any entrepreneur business organization is run to earn profits and ultimately to make
money. In a typical manufacturing set up the buyer i.e. customer decides the product
Labour cost
Overheads
In the above cost, the end customer has always expectation of lowering it or to
maintain at same level. However, out of above item, raw material cost and labour
cast will have always incremental effect. So to have better profit out of
manufacturing, you need to have control over overheads as well as labour cost.
49
CHAPTER 8: SUGGESTIONS & CONCLUSION
SUGGESTIONS: -
50
According to survey, to maintain the morale of the employees, management should keep
Transport Facility:-
The company may provide transport facility rather than giving Conveyance allowance.
On giving an informal talk with employee of the company, it was found that the
Festival Advance:-
Company may provide a festival advance facility which will prove more beneficial for
the employees and which will help them in fulfilling their needs arising during the course
Salary Survey:-
Company should conduct salary survey to find out and study recent patterns in similar
industry. Based on the finding of such surveys they should restructure the compensation.
51
As employees grow in the organization, simultaneously his family liabilities also grow.
package.
In the competitive era, to keep feet one need to continuously upgrade him by way of
knowledge base and develop things which may utilize for organizational development.
CONCLUSION: -
From this project report, I could conclude that compensation management plays integral
1. Any compensation program must have the strong linkage to the profitability at the
52
2. The program should ensure that it establishes accountability, ownership and
3. The key to motive employees is compensation package i.e. direct wages are low
but other benefits are more which are based on productivity. They vary according
to productivity.
company.
CHAPTER 9: LIMITATIONS
1. The study was restricted to main branch of EPCOS India Pvt. Ltd.
53
2. Due to companys norms and regulations some of the official and financial data
3. Many times the officials were so busy that they could not answer the queries
BOOKS:
54
P. Subba Rao (2007); Essentials of Human Resource Management & Industrial
INTERNET SITES:
<http://payroll.naukarihub.com/compensation/direct-compensation.html> assessed on
<http://payroll.naukarihub.com/compensation/indirect-compensation.html> assessed on
<http://payroll.naukarihub.com/compensation/importance-of-compensation.html>
<http://www.epcos.com/web/generator/web/sections/components/page,locale=en.html>
55