1. WAGES AND SALARYADMINISTRATIONChapter 4 Wage and Salary Administration

2. Chapter 4 Job EvaluationJob evaluation is the cornerstone of a formal wageand salary administration. The key roles which jobevaluation process plays in wage and salaryadministration are:It is the most effective means of determininginternal pay relationshipsIt can be used as an instrument for effecting thecompanies basic pay policiesEquitable base-pay relationships set by jobevaluation serve as a foundation for incentive Cont 3. Chapter 4Job evaluation provides a reasonable basis forpersonal movesUseful controls over wage and salary costs can begreatly aided by job evaluationJob evaluation provides a foundation for gearingcompany pay scales to the wages paid bycompeting companiesJob evaluation assists managers in meeting day-to-day problemsIt measures job worth in an administrative senserather than an economic or social one Cont 4. Chapter 4Basic areas of information, which are pertinent inalmost all job analysis are: Fundamental purpose of the job Work assigned or performed General importance of each job element and its relation to objectives of the operation Approximate time spent on each duty or area of responsibility Scope of the job and its impact on the operation Inherent authority and formal or informal audits on work Working relationships including supervision Cont 5. Chapter 4Specific methods, equipment, or techniqueswhich must be usedClimate of the job, including objectives andworking environmentConditions under which work must beperformed 6. Chapter 4 Salary StructureDesign of a salary structure involves considerationof three different questions:At what level should the staff be paid by comparisonwith each other with reference to internal relatives?At what level should they be paid in comparisonwith other employees with reference to externalrelatives?How will the motivation and commitment of staff beaffected by the salary system and how can thatsystem be designed to influence staff behaviour? 7. Chapter 4Pay DeterminationThe Economists ApproachThe Sociologists ApproachThe Psychologists Approach 8. Chapter 4Pay Problems of the BusinessOne problem which exists in every enterprise is thequestion of pay relationships within the companyEmployees are also sensitive about the pay receivedfor comparable work in other companiesReward for outstanding work constitutes anotherimportant pay problem for employees and managersThere is a wide range of pay problems that areessentially administrative in nature 9. Chapter 4Need for Formal ProgrammeIn small organizations wages and salary matters areusually handled by a person in the office of the chiefor head executive or the accountant, though theowner or proprietor or a top official exercises closesupervisionThe very complexity of pay matters usually requires areasonable formalised wage and salary programme,except in the small operationFormal programme is characterized by theestablishment of standards which serve to guide orcontrol individual pay decisions 10. Chapter 4Managements Approach to Pay ProblemsA basic approach to pay problems involves:Identifying NeedsDetermining ObjectivesDeveloping ProgrammesPlanning and Executing the Programmes 11. Chapter 4Responsibility for Wage and Salary AdministrationResponsibilities should be fixed carefully so that each personassociated with the programme knows exactly what is expectedof himThe individual manager seldom has complete authority andresponsibility for wages and salary administrationLine managers have basic responsibility for making paydecisions within the frame work of policies, practices, andtechniques which have been established by the companyWage and salary staff specialist also have certain areas ofresponsibility in carrying out the programme 12. Chapter 4Salary Administration of Top ExecutivesThere are some special factors affecting paydecisions for executive management in addition tothe elements of formal salary administrationprogrammes One of the most important concerns the income tax consequences for the individual executive Another is the fact that the salaries of such executive managers set a ceiling on pay Cont 13. Chapter 4There are some factors which are considered inestablishing the compensation of executivemanagementOne is the size of the companyAnother is the nature of the industry itselfEmployee compensation represents a substantialpart of the total operating costs of any businessThe success of each manager depends in part onwage costs and employee productivity in hisdepartmentThus, the company wage and salary programme isimportant alike to employees, managers, and owners 14. LikeusonFacebook: p // /http://www.facebook.com/welearnindiaFollowusonTwitter:http://twitter.com/WeLearnIndiahttp://twitter com/WeLearnIndiaWatchinformativevideosonYoutube:http://www.youtube.com/WelingkarDLP