Wage- Wage basically is the price paid for the service of labour whether it is on

daily basis or weekly or monthly.

Salary- Salary is the compensation paid to an employee for the service
rendered on weekly, monthly or annual basis.
Fringe benefit- There refers to the compensation given to employees over and
above the wages that often is not directly related to output performance etc.
Wage and Salary administration- It refers to the establishment and
implementation of sound policy and practices of employee compensation.
Statutory Minimum Wages- It is the basic minimum wages paid to the workers
as per the provision of the Minimum Wages Act, 1948.
Basic Minimum Wages- It is the minimum wage which is fixed through judicial
pronouncement, awards, industrial tribunals and labours.
Minimum Wages- It is the minimum amount which an employer thinks
necessary for the sustenance of life and preservation of the efficiency of the
worker.
Fair Wages- It is the wages which the labourer gets for his work which is near
to minimum wages and living wages.
Living Wages- A worker has not only to be paid wages for bare essentials like
food, cloth and shelter but also facilities like education for his children,
protection against ill health, insurance etc.
Wage Fixation:-
 Wage fixation in India is according to the report of Royal Commission of
labour, 1931.
 Statutory wage board to be set up for fixing minimum wages.
 Labour investigation committee(Rage committee) appointed by govt of
India 1944, also made investigation
 ILO convention No 26,1928 provides wage fixing machinery for certain
trades. India ratified the convention in 1955.

Wage Theories:-
Subsistence Theory:-
 David Richardo
 Also known as "Iron Law of Wages"
  This theory suggests that if the wage fall below subsistence level then
many worker will die in hunger, disease, malnutrition.
 The theory is base on 2 assumption:-
 The Law of diminishing return applies to industry.
 There is a rapid increase in population.
Wage Fund Theory
 Adam smith and further J. S. Mill
 If the wealth is high then the wage will be more.
Residual Claimant Theory
 Francis A Walker
 labour is residual claimant. The wages are equal to the whole production
minus rent, interest and profits.
Surplus Value Theory of Money
 Karl Marx
 Labour has to be treated as an article of commerce
Marginal Productivity theory
 Wick steed and clark
 Wages depend upon the demand for and supply of labour
Bargaining Theory of Wages
 John Davidson
 Wages are determined by the relative bargaining power of workers or
trade unions and of employers
Compensation Theory
 When employees are dissatisfied with their jobs their desire for money
increases and attractiveness of the job decreases.
Expectancy Theory
 Vroom
 It focuses on the link between rewards and behaviour motivation.
Equity Theory
 This theory seek to relate employees behaviour to their perception of
equity and inequity in their compensation.
Agency Theory
 This theory focus on the divergent interest and goal of the organisation
stake holder
Wage Differentials
1) Occupational Differentials
 Different occupational skill, knowledge, demand supply situation
2) Inter-firm Differentials

3) Inter-area or Regional Differentials
4) Inter-industry Differentials
5) Inter-personal Wage Differentials