WAGE AND SALARY

ADMINISTRATION
BY: PEARL ANGELICA S. CAGUNOT
Salary
PAYMENT, USUALLY PAID MONTHLY AND USUALLY
EXPRESSED AS AN ANNUAL AMOUNT, MADE BY
EMPLOYERS TO EMPLOYEES IN RETURN FOR WORK
DONE.
Wage
PAYMENT FOR LABOR OR SERVICES USUALLY
ACCORDING TO CONTRACT. AN EQUIVALENT OR A
RETURN FOR SOMETHING DONE, SUFFERED OR
GIVEN.
 Theories in Wages
Classical Wage Theory
This theory is based upon the
fundamental concept that the labor is a
commodity and we have to pay the price
according to supply and demand.
 Theories in Wages
The Just Wage Theory
The worker’s is the cost of living should
be considered first in the cost of the
production.
 Theories in Wages
Bargaining Theory of John Davidson
It proposes that the labor is a commodity
like anything that could be bought at the
price by the user.
 Theories in Wages
Marginal Productivity Theory
It implies the supply of labor in any given
economy on the whole depends upon the
total number of individuals who want to
work and are available for work.
 Theories in Wages
Purchasing Power Theory
It tries to establish the relationship between
wages and level of economic activity.
 Theories in Wages
Labor Theory of Values
It emphasizes that the labor is the source of
all products and that without this important
component, there could be no goods to
human consumption
 Theories in Wages
Standard in Living Theory of Wages
That the cost of living is dependent upon the
economic needs of the family for the basic
necessities of life for food clothing and
shelter.
Wage and Salary Survey
INFORMAL
SURVEY
• May be conducted through telephones and informal interviews

FORMAL SALARY AND WAGE

SURVEY
• It uses questionnaires based on benchmark jobs that are also present
in other companies and industries.
Example of
Salary
Survey
Steps in Conducting Wage and
Salary Survey
 DEFINING THE LABOR
MARKET
LIST OF KEY JOB POSITION

DETAILED DESCRIPTION OF JOBS

COLLECTION OF SALARY
DATA
COMPILATION OF SALARY
DATA
RESULTS SURVEY
Example of
Salary Data
 The Delevopment of Wage and Salary
Structure
Wage structure is the hierarchy within a company that sets the amount
each level of employment is paid and what benefits each level is due.
Lower-level employees are paid less than other people at the business,
and these employees may get an hourly wage as opposed to a set
salary.
The following are the advantages of the wage
and salary structure
• It affect the workers’ earning and standard of living.
• It eases the recruitment and maintenance of an effective
labor force.
• It develops employee morale and increases work efficiency.
• It represents cost and competitive advantage in the industry.
The following are the advantages of the wage
and salary structure
• It helps in preparing budgetary allocations and eases
computation of salary adjustments and as an aid in short
term and a long range plans.
• It eliminates pay distortions and inequalities in employee
compensation.
• It establishes an equitable salary range for various jobs.
 Method of Wage Payment
THE MAIN PURPOSE OF A FORMAL WAGE AND
SALARY MANAGEMENT PLAN IS TO HAVE A
SYSTEMATIC METHOD OF PAYMENT TO
ENSURE THAT EMPLOYEES RECEIVE FAIR
WAGE AND SALARY FOR THE WORK THEY
PERFORM.
THERE ARE 2 METHODS OF PAYING
SALARIES:
• By the Time Worked
• By the Amount of Worked Produced
Method of Wage Payment

BY THE TIME
EARNINGS
WORKED DO NOT FLUCTUATE WITH THE
AMOUNT OF WORK PERFORMED OR WITH THE
QUALITY OF OUTPUT.

HXR=W
Method of Wage Payment

BY THE AMOUNT OF WORK

PRODUCED
EARNINGS DEPENDS ON HOW MUCH WORK
THE EMPLOYEE COMPLETED.

NXU=
Labor and Wages
The type of job one does and the financial compensation
he or she receives are very important in our society.
Classification of Workers
• Blue Collar - Manual Laborers
• White Collar - Office Workers
• Pink Collar – Jobs associated with women like
secretarial , nursing.
Categories of Labor Grades
• Skilled Labor – These are workers who have received
specialized training to do their jobs. Exp. carpenters,
electricians, mechanics etc.
Categories of Labor Grades
• Unskilled Labor – These are workers who have
received no special training and have few specific
skills. Exp const. workers, painters, factory assembly
line etc.
Categories of Labor Grades
• Professionals – elite of the labor grades, there are
those workers who need an advanced degree to do
their jobs. Exp. Doctors, lawyers etc.