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A: Factors Affecting Wage and Salary / Employee Compensation (3 Marks)

Internal Factors External Factors
1. Ability to Pay 1. Labor Market
2. Business Strategy 2. Going Rate
3. Job Evaluation and Performance 3. Productivity
Appraisal 4. Cost of Living
4. Employee 5. Labor Unions
B: List out any four Common goals of compensation policy: (4 Marks)

1. To reward employees’ past performance

2. To remain competitive in the labor market
3. To maintain salary equity among employees
4. To motivate employees’ future performance
5. To maintain the budget
6. To attract new employees
7. To reduce unnecessary turnover

C: What are the three ways that “Employees” himself/herself influence compensation? (3 M)

1. Performance: 2. Experience 3. Potential

D. List out principles of Wage and Salary Administration (3M)

1. External Equity 2. Internal Equity 3. Individual Worth

E. “WAGE” means any economic compensation paid to the employer under some contract to his works
for the services rendered by them.” (1M)
F. under wage categorization “NOMINAL” wages: It consists of wages paid in cash only. It “does not”
include other benefits like medical allowance, residence, transport etc. (1M)

G. under wage categorization “REAL” wages: It consists of wages paid in cash along with other benefits
like medical allowance, residence, transport, children education etc. (1M)

H. “15th session of the Indian Labour Conference” (in 1957) propounded certain wage concepts such as
need-based minimum wage. (1M)

I. “the committee on Fair Wages “(in 1948) propounded certain wage concepts such as minimum wage,
fair wage, living wage (1M)

J. “FAIR” wage determined by considering the level of the national income and its distribution (1M)

K. According to Dr. Wallace Rudell Aykroyd, minimum food in calories should an adult intake 2700(1M)

L. What are the four institutions through which Wages and salary fixed in India?(4M)
1. Collective bargaining 2. Industrial wage boards

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3. Government appointed pay commission 4. Adjudication by courts and tribunals

M. Name the statutory act, which is most useful instrument for wage determination for unorganized sector

Ans: Minimum Wages Act 1948 (1M)

N. Wage boards in India are also called as Wage Commissions, Trade Boards (2M)
O. Explain the following with examples (3M)
Direct Compensation Indirect Compensation

Encompasses employee wages and salaries, Comprises the many benefits supplied by
incentives, bonuses, and commissions. employers, and nonfinancial compensation
includes employee recognition programs,
rewarding jobs, and flexible work hours to
accommodate personal need
P. Frame work for wage calculation (2M)
Organized Sector Unorganized Sector
 The `day', `week' and `month' are the
basic units for wages calculation -
used in combination.
 Normal working week is five days
(for government) five half days/ six `Day' is the common unit of calculation. In certain
days. cases piece rate wages is in vogue, as well as hourly
 `Hour' is generally not a unit for wages.
wage calculation. (In newer sectors
like IT, ITES hour is becoming a
standard).
 Wage payment is made monthly.

Q: Minimum Wage :(2M)

A minimum wage is a compensation to be paid by an employer to his workers irrespective of his ability to
pay. The Committee on Fair Wage’ has defined minimum wage, as “the wage must provide not only for the
bare sustenance of life, but for the preservation of the efficiency of the workers. For this purpose, minimum
wage must provide some measures of education, medical requirements and amenities”.
R: Living Wage: (2M)
A living wage is one which should enable the earner to provide for himself and his family not only the bare
essentials of food, clothing and shelter but a measure of frugal comfort including education for his children,
protection against ill-health, requirement of essential social’ needs and a measure of insurance against the
more important misfortunes, including old-age. Thus, a living wage represents a standard of living. A living
wage is fixed considering the general economic conditions of the country.
S: Fair wage: (2M)
Fair wage, according to the committee on Fair Wage, is the wage which is above the minimum wage
but below the living wage. The lower limit of the fair wage is obviously the minimum wage; the upper

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limit is set by the capacity of the industry to pay. The concept of fair wage is essentially linked with
the capacity of the industry to pay.

S: Collective Bargaining Steps (tick mark right order)(1M)

a. Charter of Demand- Negotiations – Agreements- Strikes- Conciliation officer

T. V V Giri National Labour Institute (VVGNLI) has proposed doubling the national-level minimum wage
for a worker in the country to Rs 9,750 a month (1M)

U. National Minimum Wage for India should be set at Rs 375 per day (1M)

V.  VVGNLI suggested House rent allowance of Rs 55 per day (1M)

X. VVGNLI Committee’s proposed formula, a family with a consumption unit of 3.6 requires 2,400 calories
of food, along with a minimum of 50 gm of protein and 30 gm of fat every day, according to the National
Sample Survey Office's. (4 Marks)

Y. Why a Member of Parliament should consist in a wage board (1Marks)

Ans: To safe guard consumers interests

Z. No.of Pay commissions so far implemented in India after independence 7(1M)

AA. In which year does Committee on Fair Wages established 1948(1M)

AB. Two workers performing the similar job in same or different industry get different wages. It is due to
the difference in their qualification, skill, responsibility and experience. This is known as “WAGE
DIFFERENTIALS (2M)

AC. Year of drafting Minimum Wages act 1948 (1M)

AD. List out any two Agreements at plant level for Collective Bargaining (2M)

Bata Shoes agreement 1955,58; Tata Iron & Steel 1962 ; Modi Weaving Mills 1956

AE. The Ministry of Labour & Employment; Shri Santosh Gangwar  (2M)

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AF. Identify this personality for his contribution in Nutrition Dr. Wallace Rudell Aykroyd (2M)

AG. Identify the personality who coined the term Collective Bargaining SYDNEY BEATRICE (2M)

Date: 29/7/2019

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Exam Moderator: Mr. B. Balamurali

Assistant Professor

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