WAGE AND SALARY

ADMINISTRATION:
 It is a systematic way to provide monetary
and other values to the employees for the
services provided

It is the administration of

compensation It aims to provide and

maintain a
right wage structure
 WAGES
Wages are paid to the blue
collar employees like daily
manual workers

Are paid daily or weekly

For work the value of which

can be measured in money
 SALARY
It is paid to white collar
Employees like clerks,
Executives and mangers

Paid monthly
Monetary value cannot
be measured easily
 COMPENSATION

Compensation includes
wages, benefits, leave
facility, travel, house
rent, privileges of rank
and non monetary
awards and recognition
 Difference in Wages, Salary &
Compensation Terms

WAGES SALARY
COMPENSATION
Paid to BLUE Collared Paid to WHITE collared
Employees
On Daily, weekly, Monthly Comparative Form
Paid at specified Intervals
Can be measured in terms All Basic , gross amount ,
of money allowances + Benefits
Paid to Employees whose
contribution cannot be
measured
OBJECTIVES OF SALARY ADMINISTRATION

•Ensure fair and right payment

• Attract efficient and good employees

• Retain present employees

• Balance payment and the work

• increase morale and motivation

• Project good image of the company

 Principles of wages administration
Interest of the employer and employees to be considered

Wage plan is to flexible to care of changes in society

Differences in wages should be logical

Should simplify administration

Should align with company policy

Should be according to prevailing

market
Concepts of Different Wages
MINIMUM WAGES:
Minimum amount of remuneration paid to workes.
Under Minimum Wages Act 1948.
FAIR WAGES:
Workers performing work of equal skills, difficulty or unpleasantness
should receive equal or fair wages
Match the prevailing wage rates
LIVING WAGES:
Living wages should enable the male earner to provide for himself and his
family, not only the bare essentials of food, clothing and shelter, 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
 Factors Affecting Wage / Salary Levels

• Remuneration in comparable industries

• Firm’s ability to pay
• Relating to price index
• Productivity
• Cost of Living
• Union Pressures & Strategies
• Government Legislations
Development of A Pay System
Review of Job Description

Conduct Job Evaluation Gather Wage Survey Information

Pay Structure

Administer Individual Pay

Adjustments

Monitor & Upgrade Pay System

 Total Compensation

Direct Compensation Indirect TOTAL

(Base Pay, Incentives) (Benefits) COMPENSATION
 Medical
Reimburse
m ent Special
Allowances

Basic Salary

DIRECT Bonus
COMPENSATIO
N

House Rent
Allowance

Leave Travel
Allowance
Conveyance
 Overtime
Allowance Hospitalizati
on

Leave Policy

Insurance

INDIRECT
COMPENSATIO
Flexible N

Timings

Leave Travel

Holiday
Homes Retiremen
t
Benefits