CONCEPT OF WAGE & SALARY ADMINISTRATIONBy,Amit WaniRoll No.:- 58

Definition of Wages & Salary

•Base wages and salaries are defined as the hourly, weekly and monthly pay that employees receive for their work in and Organization

Principles Governing Compensation Administration•Maintaining Equity•Maintaining Competitiveness•Matching Employee Expectations•Reinforcing positive employee behavior•Eliminating any discrepancies•Devising a system that is most efficient•Optimization of management and

employee interests•Maintaining good IR and harmony

Purpose of Wage & Salary

•Attracting talented resources•Retaining and motivating employees•Financial Management•Legal Requirements

Concepts of Different WagesMINIMUM WAGES• It is amount of remuneration, which is just

sufficient to enable an average worker to fulfill all his obligations.

• It is applicable to workers across the country and is governed by the Minimum Wages Act 1948

• 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

• The current minimum wage in India is Rs. 66 per day to all the workers in scheduled employment

• It is revised every 5 yrs

Concepts of Different WagesFAIR WAGES• Workers performing work of equal skills,

difficulty or unpleasantness should receive equal or fair wages

• The basis of fair wage is the minimum wage, within the capacity of the organization to pay

• Fair wage should be related to the productivity of the labour

• It should match the prevailing rates of wages in the same or neighboring localities

• It should reflect the level of national income and its distribution

Concepts of Different WagesLIVING 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