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By:Priyanka Saluja.

Ranu Chidwal.Mayur Verma.

Nijita Khode.

By:Priyanka Saluja.

Ranu Chidwal.Mayur Verma.

Nijita Khode.

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Compensation is what employees receive in exchange for their contribution to the organization.

Generally, services are offered for three types of rewards(also known as COMPONENTS), that are-

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1. Pay or Guaranteed Pay.2. Incentives or Variable Pay.3. Benefits.

1. Pay or Guaranteed Pay.2. Incentives or Variable Pay.3. Benefits.

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The most important objective of any pay system is fairness or equity.

The term equity has three dimensions:

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Other objectives

1. Attract Talent

3.Ensure Equity

2. Retain Talent

6. Comply with legal

rules

7. Ease of operation

5. Control Costs

4. New & desired

behavior

Ultimate goal is to reward desired behavior and

encourage people to do well in their jobs

For EMPLOYER For EMPLOYEE

Brand image for attracting candidates.

Work life balance.

Motivating employees for

higher productivity and

performance.

Recognition.

Retaining talent. Self esteem.

Consistency in compensation. Planning for better quality of

life

Provoking healthy internal

competition.8

The PS of a company depends on several factors such as,

Labor market conditions, Company’s paying capacity, Legal provisions.

The two essential components of pay structure are:-

1.Basic Wage.2.Dearness Allowance.

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The basic wage in India corresponds with what has been recommended by the Fair Wages Committee (1948) and the 15th Indian Labor Conference (1957).

While deciding the basic wage, the following criteria may be considered:

i. Skills needs of the job;ii.Experience needed;iii.Difficulty of work: mental as well physical;iv.Training needed;v.Responsibilities involved;vi.Hazardous nature of job.

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It is the allowance paid to employees in order to enable them to face the increasing dearness of essential commodities.

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DA in India is linked to three factors:

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•Attendence•Books•Car•Card(credit card)•City compensatory•Club membership•Computer•Deputation •Driver•Education•ESIS•Family•Group insurance•Leave travel•Lunch•Medical

•Night shift•Overtime•Paternity•Pension•Provident fund•Relocation•Servant

•Tiffin•Transport•Telephone•uniform

Workmen’s Compensation Act,1923

Payment of Wages Act,1936Payment of Wages Act, 1948

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It is administration of Employee Compensation.

It is a systematic approach to providing monetary value to employees in exchange for work performed.

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Wages - It implies to the remuneration to workers doing manual work.

Salaries - It is compensation to office, managerial, technical and professional staff.

Wages - It implies to the remuneration to workers doing manual work.

Salaries - It is compensation to office, managerial, technical and professional staff.

It denotes the process of managing a company’s compensation programme.

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The goals of wage and salary administration are to design a cost-

effective pay structure that will:i.Attract ;

ii.Motivate and iii.Retain competent employees.

According to D.S.Beach-It refers to the establishment and implementation

of sound policies and practices of employee compensation.

According to Bewath and Reins-It is essentially the application of a systematic

approach to the problem of ensuring that employees are paid in a logical, equitable, and fair manner.

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The ultimate goal of wage determination process is to establish & maintain an equitable wage structure that enhances the employee commitment to the organization.

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•To establish a fair and equitable remuneration

•To retain present employees.

•To attract qualified and competent personnel.

•To improve motivation and morale of employees.

•To project a good image of the company.

•To control labor cost.

Wage and salary plans should be sufficiently flexible.

Job evaluation must be done scientifically. Wage and salary plans must be always

consistent with overall organizational plans. Wage and salary plans being responsive to

changing local and national conditions. Wage and salary plans should simplify and

expedite other administration processes.

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Wage and salary systems should have a relationship with:

of an INDIVIDUAL23

HENDERSON identified the following elements of a wage and salary system:

1. Identifying the available:

and communicating them to employees.

2. Relating salary to needs and goals.3. Developing quality, quantity and time

standards related to work and goals.24

Salary opportunities

Their costs

Estimating worth of its members

4. Determining the effort necessary to achieve standards.

5. Measuring the actual performance.6. Comparing the performance with the salary

received.7. Measuring the job satisfaction of the

employees.8. Evaluating the unsatisfied wants and

unrealized goals aspirations of the employees.9. Finding out the dissatisfaction arising from

unfulfilled needs and unattained goals.10. Adjusting salary levels.

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Job needs.

Ability to pay. Cost of living. Prevailing wage rates. Unions. Productivity. State regulation. Demand and supply of labor.

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SALARY

Paid to white collared

employees.

Paid monthly, or bimonthly.

Contribution of work can not be easily measured.

WAGE

Paid to blue collared

employees.

Daily, weekly or monthly work

paid.For jobs which

can be measured in terms of

money.

COMPENSATION

It is a comparative

term.It includes wage

and all other allowances and

benefits like allowances, leave facilities, housing,

travel, and non cost such as recognition,

privileges and symbols of status.

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Thank you