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By:
Priyanka Saluja.
Ranu Chidwal.
Mayur Verma.
Priyanka Saluja.
Ranu Chidwal.
Mayur Verma.
Nijita Khode.
Nijita Khode.

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3.  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
5. Control
Costs
7. Ease of
operation
4. New &
desired
behavior
Ultimate goal is to reward
desired behavior and
encourage people to do
well in their jobs

8. 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.
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9. 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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10.  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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11.  It is the allowance paid to employees in order to
enable them to face the increasing dearness of
essential commodities.
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12.  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

14. Workmen’s Compensation Act,1923
Payment of Wages Act,1936
Payment of Wages Act, 1948
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16. Wages - It implies to the remuneration to workers doing manual work.
Salaries - It is compensation to office, managerial, technical and
professional staff.
 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.

17.  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.

18.  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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19. 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 attract qualified and competent personnel.
•To retain present employees.
•To control labor cost.
•To improve motivation and morale of employees.
•To project a good image of the company.

22.  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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23.  Wage and salary systems should have a
relationship with:
of an INDIVIDUAL
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24. 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.
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Salary
opportunities
Their
costs
Estimating worth of its
members

25. 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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26. 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.
COMPENSATIO
N
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 