Wage and Salary Administration

``The minimum wage should be a livable wage”. This quote stresses the
importance of wage in our society.Wage and salary administration is defined as the
process by which wage and salary levels and structures are determined in
organizational settings. Wages are payments for labor services rendered frequency,
expressed in hourly rates, while a salary is a similar payment, expressed in weekly,
monthly or annual rates. Wages constitute the major factor in the economic and
social life of any community in an economic sense; wages represent payment of
compensation in return for work done.

The purpose of wage and salary administration is to establish fair and equal
compensation . It is to attract qualified personnel and to keep labor and
administrative costs in line with the company’s ability to pay their employees.
Employees and the employers should then meet halfway. In the sense that the
employer would not feel that his employees are being paid far more than they
deserve and the employee would not also feel underpaid. Employees should be
properly compensated for their work but this is subject to uncertain circumstances.
Because if these employees are properly compensated then they are more likely to
be more productive and motivated to work more efficiently if they feel they are
compensated fairly in terms of monetary value. But then again employees should
also be aware of the business’ financial capacity so that they could understand as to
why they are being paid in this way. Since businesses should be able to pay their
employees on their ability to pay them without risking the business as a whole.

To summarize this topic, employers should be fair and should warrant all the
benefits and compensation their employees deserve in accordance with their work.
And employees should be well informed on the criteria on how they are being paid.
This would then be a motivating factor for a lot of employees if they are
compensated properly in accordance with the amount of work and time they put
into their work. Proper wage and salary administration is a necessary part of
effective management. This is why wage and salary administration is a key object
in an effective organization.