MARIANO MARCOS STATE UNIVERSITY

COLLEGE OF ENGINEERING
DEPARTMENT OF CIVIL ENGINEERING

REPORT WRITE UP ON JOBS AND WAGES

IE 102

Prepared by:
John Lyndon Adriano
Joshua Ragonjan

Submitted to:
Engr. Percy Gascon
 A job, or occupation is a person’s role in society. More specifically, a job is an activity,
often regular and often performed in exchange for payment for living. If a person is trained for a
certain type of job, they have a profession. Jobs can be categorized, by the hours per week into
full time or part time. They can be categorized as temporary, odd jobs, seasonal, self-
employment, consulting or contract employments.
A wage is monetary compensation or remuneration, personnel expenses labor paid by an
employer to an employee in exchange for a work done. Can be a fixed amount for each task
completed at an hourly or daily rate, or based on an easily measured quantity of work done.

SOURCES OF JOBS AND WAGES

Okay example, we have a company who has accumulated capital or wealth, what is
created is divided. Portions paid as rent goes to the suppliers of land and buildings. The portion
paid as interest goes to those who lend money to the company/ investors. The major portion goes
to works as wages.
Employment leads to a job and when you work you get payment which is your wage.

WAGE ADMINISTRATION PROCEDURES

There are six logical steps toward a pay relationship that is mutually satisfactory to the
employee and employer. Regardless of job structure or union relationships, the company
intentions are expressed in wage policy, written or unwritten. The next step is job analysis, a
finding of the facts by research on the job. These facts may be recorded in terms of
qualifications, responsibilities, and job conditions, or they may simply be held in mind while the
next step is job rating. Which establishes the interrelationship among jobs and arranges those
jobs in a hierarchy of status and payment. The job pricing step, along with task setting, regulates
how much pay will be given the worker during a given period of time or for a given quantity of
satisfactory production. The final step of wage control is usually supervised by the accounting
head, as service to line managers.

Wage matters so much as it the basic to the employer- employee relationship. Enterprise
procedures such as job evaluation, rate setting, and merit rating are usually supervised by the
wage administrator.
The wage administrator is the one to determine an employees pay or wage. The wage
administrator considers productivity, profit margins, supply of labor, cost of living, living
standards, climate and cultural factors into the determination of the wage policy.
Personal incomes vary within individuals from the interplay of aptitude, education, trades
training, mental and physical health, as well in physical effort. And more importantly the
difference in duties.
The wage administrator uses:
Job analysis- Job Analysis is a process to identify and determine in detail the
particular job duties and requirements and the relative importance of these duties for a given job
Job evaluation-  is a systematic way of determining the value/worth of a job in relation to other
jobs in an organization. It tries to make a systematic comparison between jobs to assess their
relative worth for the purpose of establishing a rational pay structure.
Wage surveys- is a collection of hourly wage figures and annual salary numbers for a given
industry. ... This helps the business determine competitive wages and appropriate pay increases
for newly hired workers and existing employees.
To come up with one’s personal pay

METHODS IN CALCULATING EMPLOYEE PAY:

1. Based upon satisfactory performance of duties during a period of time
2. Based upon the successful completion of a unit of work
3. Time payment method- pay according to hour of working time
TIME WAGES OF EMPLOYEES
1. Clerical and sales employees- weekly costmary pay
2. High ranking and supervisory and governmental employees- monthly pay
3. Teachers or seasonal workers- every three or six months
4. Managers and technicians- by year or a longer contract period
But in any event, the actual earnings are customarily delivered weekly or biweekly.

Although day work/ time wages are the simplest method it is costly in the long run. With
different salaries many may think of unfairness and more workers won’t do their job properly
and this is where incentives come in
Incentive- a thing that motivates or encourages one to do something
Incentive system reports a 20 to 50 percent increase in productivity with higher employee
earnings and lower unit production cost. So, for example a printer company has low sales and
salesmen are just not selling enough so what they employ is a no limit commission on what they
sell so the more they keep selling the more their salary goes up and the company sells more
printers so win win.
JOB ANALYSIS
The key mission of job analysis is to determine how long it should take workers to
perform tasks for which they are being paid. It is particularly important to the success of
incentive wage plans that the unit of work be carefully evaluated and monitored.
CONDITIONS THAT ARE ESSENTIAL TO THE SUCCESS OF WAGE INCENTIVES
1. Standard conditions and procedures must be established for the performance of each
operation.
2. Management must establish a sound wage policy for the guidance of its members in wage
matters.
3. The company wage structure must be established by logical means such as job evaluation
and community wage surveys.
4. Careful time studies must be made by intelligent trained observers, devoting sufficient
time to each study for recording an accurate performance standard.
5. These time- study standards must be uniformly translated by simple understandable
methods into task rates permitting worker earnings in keeping with established wage
policies.
TIME STUDY
- Are commonly used by means to ‘put a price on a job’ which means more productivity
means more pay for the employee including bonus plans and other incentive systems.
- The specialist in this field is known variously as an industrial engineer, time-study
engineer, incentive engineer or standards person.
Example of time study record sheet front and back
STEPS IN DOING A TIME STUDY
1. A thorough study of possible ways of improving the operation and determining the
quickest and best methods.
2. A careful recording of observations made on a selected average worker.
3. Leveling the observations to correct for minor variations and bringing the results closer to
that expected from the average worker.
4. Appointing allowances for personal needs, delays, and overcoming fatigue.
5. Calculating the time to do the task from the observation.
PREDETERMINED ELEMENTAL TIME STANDARDS
STEPS IN ESTABLISHING PREDETERMINED ELEMENTAL TIME STANDARDS
1. To make accurate time studies in the usual fashion over a considerable period of time,
exercising care to select elements of like nature whenever timings are made of similar
operations.
2. To accumulate data form separate time studies on the same element into a statistical table
 3. To evaluate the several contributing parts and arrive at an average time value for the
element
4. To these this average time value statistically and to determine its usefulness.
5. Finally, if the average time values prove statistically sound, they may be used to make
elemental time studies.
Method Time Measurement (MTM)- one predetermined time systems, analyzes human work into
such fundamental actions such as foot motion, leg motions.
A basic time allowance is credited for each basic motion and adding these derived times gives an
estimate of probable time required to perform any work task. Naturally the accuracy of the
results depends on the accuracy of the original observations, proper statistical reduction of those
observations to standard data.
Example of basic motion data
WORK SAMPLING
- This method produces facts about machine operation or worker activity ny means of
random observations. Continuous observation is applied to save time for the observer and
to get a more accurate sample
- This method is used to evaluate executive performance.
WAGE INCENTIVE METHODS*
GENERAL PRINCLES OF WAGE INCENTIVES
1. Both employers and employees should feel that the incentive plan is fair. The plan should
be tailored to the jobs to which it is applied.
2. A plan must be thoroughly understood before it can be effective.
3. Plans with guaranteed minimum earnings are general preferred to those with no minimum
base.
4. The means by which standards are set should be open to inquiries. Procedures should be
incorporated for fair hearings of injustice claims and for modifying rates.
STRAIGHT PIECEWORK
- under this system, management establishes a price that it will pay for each unit of production.
example 6/10 cent for each hole drilled, 10 holes the worker gets 6 cents and for 1,000 holes 6
dollars.
- The highest type of incentive and certainly has many advantages to both the employee
and employer, ambitious workers are able to earn high wages and are equally repaid at all
steps of effort.
HALSEY CONSTANT SHARING PLAN
 - Its chief value is the sense of partnership which it sponsors, since increased profits are
supposed to be split.
- The foreman or rate setter judges the time necessary to complete a given task and offers
the worker a premium over his or her day wage for completing the task on time, or ahead
of time.
- The portion of the gain goes to the foremen and supervisors.
TASK AND BONUS SYSTEM
- It pays the employee a high relative hourly rate which he gets whether he makes his time
on the job or not.
- It pays him a higher rate if he does complete the job in the time allowed and continues
this higher rate just like straight piecework for all work produced beyond the standard.
- The plan provides for showing the employee graphically and daily.
MEASURED DAYWORK
- This is a system of paying production workers job rates based on job evaluation plus an
added inducement determined by merit rating.
- Can get high pay if production level is high but if low the pay is significantly reduced.
PLANT- WIDE INCENTIVE PLANS
- This is where everyone benefits from total output instead of from individual effort.
- There is an emphasis on manager- worker cooperation and teamwork.
INCENTIVE COMPENSATION OF EXECUTIVES
- A world- wide shortage of effective administrative executives persists.
- High personal tax rates and the growing shortage of qualified executives in recent years
have led to renewed emphasis on incentive plans for executives.
- This give lots of benefits to hired executives. However, many of these privileges are
under close scrutiny by the Internal Revenue Service.
METHEMATICAL CONTROL OF INCENTIVES
- The basis of much of the mathematical and statistical control which is growing in
importance and in need considering all these incentives. There needs to be control to
foresee the best plans and incentives to implement.
 JOB EVALUATION
 It is a systematic way of determining the value or worth of a job in relation to other jobs
in an organization
 It tries to make a systematic comparison between jobs to assess their relative worth for
the purpose of establishing a rational pay structure.
 An assessment of the relative worth of various jobs on the basis of a consistent set of job
and personal factors, such as qualifications and skills required.
 The objective of job evaluation is to determine which jobs should get more pay than
others. Several methods such as job ranking, job grading, and factor comparison are
employed in job evaluation.
Job evaluation methods
Job evaluation can be classified as analytical and non-analytical.

 Analytical job evaluation method

 Factor-Comparison Method: Under this method, the job is

evaluated, and the ranks are given on the basis of a series of factors
Viz. Mental effort, physical effort, skills required supervisory
responsibilities, working conditions, and other relevant factors. These
factors are assumed to be constant for each set of jobs. Thus, each job
is compared against each other on this basis and is ranked accordingly.
The advantage of this method is that it is consistent and less
 subjective, thus appreciable by all. But however it is the most complex
and an expensive method.

 Point-Ranking Method: Under this method, each job’s key factor is

identified and then the sub factors are determined. These sub-factors
are then assigned the points by its importance.
The point ranking method is less subjective and is an error free as the
rater sees the job from all the perspectives. But however it is a
complex method and is time-consuming since the points and wage
scale has to be decided for each factor and the sub factors.

 Non-analytical method

 Ranking Method: This is the simplest and an inexpensive job

evaluation method, wherein the jobs are ranked from the highest to
the lowest on the basis of their importance in the organization. In
this method, the overall job is compared with the other set of jobs
and then is given a rank on the basis of its content and complexity
in performing it.
Here, the job is not broken into the factors, an overall analysis of
the job is done. The main advantage of the ranking method is, it is
very easy to understand and is least expensive. But however it is
not free from the limitations, it is subjective in nature due to which
employees may feel offended, and also, it may not be fruitful in the
case of big organizations.

 Job Grading Method: Also known as Job-Classification

Method. Under this method the job grades or classes are
predetermined and then each job is assigned to these and is
evaluated accordingly.
The advantage of this method is that it is less subjective as
compared to the raking method and is acceptable to the employees.
And also, the entire job is compared against the other jobs and is
not broken into factors. The major limitation of this method is that
the jobs may differ with respect to their content and the complexity
and by placing all under one category the results may be
overestimated or underestimated.
 Merit Rating
Merit Rating is also known as performance appraisal or performance evaluation.

 According to EDWIN B. FILIPPO

“It is a systematic, periodic and so far as humanly possible, an impartial rating of

an employee’s excellence in matters pertaining to his present job and to his potentialities for a
better job”
 According to JOHN A. SHUBIN
“It is a systematic appraisal of the employee’s personality and performance on the
job and is design to determine his contribution and relative worth to the firm”

From these definitions, it is clear that merit rating is concerned with the evaluation of the
performance of the employees on particular jobs.
The performance factors usually considered are personal factors like quality of work, capacity to
learn, co-operation and initiative. The number and type of factors to be considered are generally
selected by a committee consisting of experts.

Objective of merit rating

People differ in abilities and aptitudes. Management should know these differences so

that employees are assigned jobs according to their capability.

Main objectives of merit rating are as follows:

1. To assess the work of employees in relation to their job requirements.

2. To consider employees/workers for promotions, transfer, layoffs etc.

3. To assess the good and bad points in working of employees and then making suggestions for

improvement.

4. To help in wage and salary administrations and taking decisions about incentives and

increments to be given to the workers.

5. To evaluate skill and training capabilities of employees and helping in planning suitable

training and development programs for workers.

6. To know the problems faced by workers while doing various jobs.

7. To provide a basis for comparison to segregate efficient and inefficient workers.

8. To help management in placement/transfer to workers according to their capacity, interest,

aptitude and qualifications.

9. To help supervisors to know their subordinates more closely for increasing their efficiency and

improving productivity.

Methods of Merit Rating

The two methods of techniques of merit rating are Traditional Methods and Modern Methods.

A. Traditional Methods:

1. Ranking Methods:

It is the simplest, oldest and most conventional method of merit rating. Every employee is judged

as a whole without distinguishing the rates from his performance. In this method a list is then

prepared for ranking the workers in order of their performance on the job so that an excellent

employee is at the top and the worst at the bottom. It permits comparison of all employees in any

single rating group regardless of the type of work.

The difficulty of this method is that it is very difficult to compare persons on the whole when

they differ in qualities, attitudes, etc. This method only gives the idea about the standing of

various people and not the actual difference among them. This method however does not indicate
specific strengths and weaknesses between two or more workers. This technique is used in those

enterprises where there are few workers

2. Paired Comparison Method:

In this method every person is compared trait wise, with other persons one at a time, the number

of times one person is compared with others is recorded on a piece of paper. These numbers help

in yielding rank of employees. For example, if there are five persons to be compared.

As performance is first compared with that B to determine who has better performance, then A’s
compared with C, D and E in turn and performance is recorded. Later B is compared to C, D and

E since he has already been compared with A. Afterwards C is compared with D and E and so

on. The results of these comparisons are tabled and a rank is assigned to each employee. The

number of comparisons can be worked out with the formula.

Number of Comparisons = N (N- 1) / 2

Where N is total number of employees to be evaluated. This method gives more reliable rating

than straight raking. But it will be suitable only when the number of persons is small.

3. Grading system:

Under this system certain features like analytical ability, cooperativeness, dependability, job

knowledge, etc. are selected for evaluation. The employees are given grades according to the

judgment of the rater.

The grades may be such as:

A-outstanding, B-very good: C-satisfactory, D- average, etc. The actual performance of every

employee is rated with various grades in the mind of the rater.

4. Forced distribution method:

Some evaluators suffer from a constant error i.e. either they rate all workers as good, average or

poor. They do not evaluate the employees properly. This system minimizes rater’s bias so that all

employees are not equally rated. This system is based on the presumption that all employees can

be divided into five categories.

Outstanding, above average, average below average and poor. The main aim in this system is to

spread ratings in a number of grades. This method will be useful only when the group of

employees is large, it is also easy to understand and simple to apply.

5. Check list method:

In this technique the supervisors are provided with printed forms containing descriptive

questions about the performance of workers. The supervisor has to answer in yes or no. After

putting answers to these questions the forms are sent to Personnel Department where final rating

is done. Various questions in the form may be weighted equally or certain questions may be

given more weight age than others.

The check list may contain such questions:

1. Is the employee hard working? (Yes/No)

2. Is he regular on the work? (Yes/No)

3. Does he co-operate with his superiors? (Yes/No)

4. Does he maintain his equipment/machines well? (Yes/No)

5. Does he obey instructions well? (Yes/No)

The supervisor’s bias is the main characteristic of this method because he can distinguish

between positive and negative question. It is also difficult to put all possible questions in the

check list because it will make the check list lengthily.

6. Critical incident method:

This method measures worker’s performance in terms of certain events or incidents that occur in

the course of work. The assumption in this method is that the performance of an employee/

worker on the happening of critical incidents determines his failure or success. The supervisor

keeps a record of critical incidents occurring at different times and then rates him on this basis.

Examples of critical incidents are:

(i) Refused to follow instructions without a detailed discussion with superiors.

(ii) Refused to follow instructions even when these were made clear.

(iii) Increased his efficiency despite resentment from other worker/ employees.

(iv) Showed presence of mind in saving a worker when sudden fire broke out.

(v) Performed a difficult task even though it was outside having regular duties.

(vi) Displayed a courteous behavior to a supplier.

(vii) He helped fellow employees in solving their problems.

The only difficulty in this method is that outstanding incidents may not regularly occur.

Moreover, negative incidents may be more noticeable than the positive ones. The supervisor may

not record an incident immediately and forget it later on. It may be difficult for the supervisors to

decide whether an incident is critical or not.

7. Free essay method:

In the free essay method, the supervisor writes a report about the worker which is based on his

assessment about performance of workers. The supervisor continuously watches the workers or

subordinates and writes his assessment in the report. The covered factors are the behaviour with

employees, job knowledge, employee traits, development requirements for future, etc.
In this method the supervisor will be able to provide a detailed account of the employee’s

performance. The system may suffer from human bias because of likings or disliking of the

supervisor for specific workers. The other limitation of this technique is that an appraiser may

not be able to express his judgement in appropriate words and it will limit the utility of appraisal

reports.

B. Modern Methods:

1. Management by objectives:

The management by objective or management by results was developed by Peter Drucker who

emphasized that performance of each job should be directed towards the achievement of whole

business objectives. According to Georg S. Ordisure, “The system of management by objectives

can be described as a process whereby the superior and subordinate managers of an organization

jointly identify its common goals, define each individual’s major areas of responsibility in terms

of results expected of him and use these measures as guides for members”. Petrer Drucker

pointed out that objectives are required in every area where performance and results directly and

vitally affect the survival and chances of success of the business.

In the MBO system of merit rating the superior and subordinate sit together and set the goals to

be achieved by the later in a particular period of time. The work to be performed becomes a goal

for performance evaluation. The employees periodically meet their supervisor to evaluate the

progress of important features of this system.

MBO, as a technique of evaluation, may not provide good results if the goal setting is hasty and

over ambitious. Lack of proper feedback between the superior and subordinate may also

adversely affect the application of this technique.

2. Assessment center method:

The assessment center method was first used in German army and later in British Army. The

purpose was to assess people in particular situations. The evaluators record their assessment

regarding various people when they perform in an actual situation. This method is utilized,

generally, to determine the suitability of persons for first supervisory levels. It also helps in

determining training and development requirements or employees.

The distinguishing characteristics training and development requirements of employees. The

distinguishing characteristics normally assessed are organizing and planning ability, getting

along with other, quality thinking, resistance to stress, orientation to work etc. The assessment

center ratings are said to be influenced by the participant’s interpersonal skills.

The employees who generally perform well in a normal situation may become conscious under

stimulated situations. The supervisors who nominate employees to assessment centres normally

do not favor people who are aggressive, intelligent, and independent even though these qualities

are essential for higher level positions.