Wage and Salary administration has an important bearing on workers, organizations, government and society. The mechanics of wage determination based on the element of adhocism has been the source of legitimate concern and anxiety to the workers. This mechanism, apart from being adhocistic in nature is also based on the principle of irrationality and other unscientific factors. Wage differential also exist on the basis of sex, region and other such artificial considerations. It is an administrative procedure of establishing and supervising wage levels and operations in an organization. In most organizations, wage and salary administration is performed in the personnel department, although larger organizations often have a payroll or wage and salary administration department.

Definition Wage and Salary Administration is the group of activities involved in the development, implementation and maintenance of a pay system. It can also be called the ongoing process of managing a wage and salary structure. Meaning ‡ The main objective of wage and salary administration is to have a scientific, rational, and balanced wage & salary structure. ‡ In salary administration, the employer should not feel that the employees are paid more than they deserve and the employees should not feel that they are underpaid. ‡ Unless there is a scientific approach /method we cannot solve this conflict. ‡ Here wage and salary administration includes allowances, leave facilities, housing, travel, etc and non-cost rewards such as recognition, privileges and symbols of status.

‡ Matching Employee Expectations.In India the question of wages assumes paramount importance because of acute poverty. No fixed norms and means are followed in fixing wages and salaries.includes wage and all other allowances and benefits like allowances. Salary and Compensation Wage Paid to blue-collar workers-paid daily. Difference between Wage. privileges and symbols of status. to some extent. large scale unemployment and a high population. Compensation A comparative term. ‡ Eliminating any discrepancies. weekly or monthly-paid for the jobs this can. ‡ Devising a system that is most efficient. legal and growth points of view. . travel and non-cost such as recognition. be measured in terms of money¶s worth. ‡ Maintaining good IR and harmony. ‡ Reinforcing positive employee behavior. ‡ Optimization of management and employee interests. psychological. housing. Salary Paid to white collar workers-paid monthly-paid to employees whose contribution cannot be easily measured. ‡ Maintaining Competitiveness. The compensation has to be viewed from economic. leave facilities. so a lot of adhocism and expediencies are found in fixing wages. Principles Governing Compensation Administration ‡ Maintaining Equity.

they pay according to the competition and maintain equity among various employees in the company. Concepts of Different Wages Minimum Wages ‡ It is amount of remuneration. ‡ Trade Unions¶ pressure on the Management.The company may have a policy to fix the wages externally competitive and internally compatible. ‡ Relative worth of job done. . ‡ The current minimum wage in India is Rs. 66 per day to all the workers in scheduled employment.e. ‡ Economic conditions of the nation. i. ‡ It is applicable to workers across the country and is governed by the Minimum Wages Act 1948. Sometimes the company may have a wage policy that it should be above the industry average or below it or comparable to it. difficulty or unpleasantness should receive equal or fair wages. ‡ Government policy on wages and salaries. ‡ Demand and supply of labour. ‡ It is revised every 5 yrs. ‡ The law states that an employer who cannot pay the minimum wage has no right to engage labour and no Justification to run a firm. which is just sufficient to enable an average worker to fulfill all his obligations.Factors influencing Wages and Salary ‡ Wage policy of the company . ‡ Prevailing wages in the region. Fair Wages ‡ Workers performing work of equal skills. ‡ Financial position of the company.

‡ Fair wage should be related to the productivity of the labour. In time-rate. the quality may be compromised but the workers may get extra income that will motivate them. A person who takes only 60% of the standard time to complete a job can be paid incentive for the 40% time saved. ‡ Whether piece-rate or time-rate. ‡ If an employee¶s production exceeds the standard production. the management should provide all facilities and keep the working conditions conducive for better production. . E. otherwise the system will be a failure. ‡ It should match the prevailing rates of wages in the same or neighboring localities. since he spends that 40% time for doing another job. quality can be maintained. not only the bare essentials of food. Living Wages Living wages should enable the male earner to provide for himself and his family. ‡ It should reflect the level of national income and its distribution. clothing and shelter. ‡ When production is not amenable to measure the time taken to complete the job can be considered to fix the wage on time-rate basis. ‡ Both have their own merits. In piece-rate. within the capacity of the organization to pay. but also a measure of frugal comfort including: ‡ ‡ ‡ ‡ Education for the children Protection against ill-health Requirements of essential social needs A Measure of insurance against the more important misfortunes including old age.‡ The basis of fair wage is the minimum wage.g. he should be given incentives for the extra production. Time-Rate and Piece-Rate Wages ‡ Employees prefer time-rate while employers prefer piece-rate. but the expected level of production may not be delivered by the employees.