3. 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
4.
5. 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
6. WAGES & SALARY ADMINISTRATION
DEFINITION WAGES & SALARY
• Base wages and salaries are defined as the
hourly, weekly and monthly pay that employees
receive for their work in an Organization.
• Can term it as compensation management.
• Thus, Wage & Salary Administration is the group
of activities involved in the
development, implementation& maintenance of
a pay system.
7. Difference in Wages, Salary &
Compensation Terms
WAGES SALARY
COMPENSATION
Paid to BLUE Collared Paid to WHITE collared
Employees
Comparative Form
On Daily, weekly, Monthly
Paid at specified Intervals
All Basic , gross amount ,
Can be measured in terms
allowances + Benefits
of money Paid to Employees whose
contribution cannot be
measured
8. Principles Governing Compensation
Administration
Maintaining Equity
Maintaining Competitiveness
Matching Employee Expectations
Reinforcing positive employee behavior
Eliminating any discrepancy
Optimization of management and employee
interests
Maintaining good IR and harmony
9. Purpose of Wage & Salary
Attracting talented resources
Retaining and motivating employees
Financial Management
Legal Requirements
10. Medical
Reimbursem
ent Special
Allowances
Basic Salary
DIRECT Bonus
COMPENSATION
House Rent
Allowance
Leave Travel
Allowance
Conveyance
11. Overtime
Allowance Hospitalizati
on
Leave Policy
Insurance
INDIRECT
COMPENSATION
Flexible
Timings
Leave Travel
Holiday
Homes Retirement
Benefits
12. Types of Incentive Plans
• SHORT TERM PLANS:
Halsey Plan, Rowan, Barth, Point Rating System,
Progressive Bonus
• LONG TERM PLANS:
Annual Bonus, Profit Sharing
Direct Compensation Indirect TOTAL
(Base Pay, Incentives) (Benefits) COMPENSATION
13. 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
14. Wage Boards / Pay Commissions
Wage Policies are formulated by following
Institutions in India
1. Collective Bargaining & Adjudication
2. Wage Boards
3. Pay Commissions
15. Reports & Documentation
• Payroll Journal Voucher
• Salary and Payroll
Payslips (print / PDF / email
Processing
/ online)
Statutory Payroll Reports
Salary Statements
Leave Management
Dynamic report writer tool
Employee Self Service
PF & ESI reports (monthly,
Payroll Reconciliation Tools
annual)
Reimbursements & Loans
Monthly Profession Tax
Payroll Processors &
reports
Outsourcers
Income tax statement
Arrears & final settlement
Form 16 PDFs
Head count summary
Quarterly eTDS filing (Form
24Q)
17. Evolution of Strategic Compensation
Traditional Modern
Change in Compensation
Compensation Compensation
System
System Systems
18. Trainings
• This program focuses on building a broad understanding of
compensation, and covers:
• HR’s role in compensation
• Components of total compensation
• Laws and regulations affecting compensation programs
• Independent contractors
• Indirect compensation (benefits) programs
• Legally required programs
• Who Should Attend?
This fundamental program is designed for HR practitioners
just entering the field, established HR employees with little
or no formal training, other employees who have
responsibilities that fall under the HR umbrella, and
business owners and managers without HR departments.
19. Conclusion
• Compensation is a hot potato for the Human Resource
Department. The motivation level of the employees to
great extent lies in monetary rewards. In the current state
of affairs it is indispensable to restructure the pay models.
Similar to changes bought about in the other departments
the HR should also emphasize on restructuring the costs so
as to bring the variable cost close to zilch.
• The major challenges what manager’s face today is
retention of the man power and the major cause of it is
that they are paid better in the other organizations.