1. By Nishant Singh(8360) Ameya Joshi(8156)

2. News in the views…. Corporate Affairs Minister Salman Khurshid, who yesterday favoured trimming pay packets of India Inc CEOs,earnestly advised them to lead a simple life saying. Mukesh Ambani, Asia’s richest man, took a 66 percent pay cut to “set a personal example of moderation” after India’s government called for austerity in salaries of executives. Unhappy with pay hike, IIT-M faculty begin strike today

4. Concept of Wage and Salary Administration

5. Refers to the establishment & implementation of sound policies and practices of employee compensation Includes areas as Job Evaluation, Surveys of Wages & Salaries, Establishing rules for administering wages, Profit Sharing, Wage changes & adjustments, Supplementary payments, Control of compensation costs

6. Purpose To establish & maintain an equitable wage & salary structure and an equitable labour-cost structure. Other objectives include: To recruit persons for a firm To control payroll costs To satisfy people, to reduce the incidence of quitting grievances, & fractions over pay, & To motivate people to perform better

7. Important Definitions Compensation: Money received in the performance of work, plus the many kinds of benefits and services that organisations provide their employees. Wages (or PAY) The remuneration paid, for the service of labour in production, periodically to an employee Difference between Wages and Salary Wages: Hourly/daily rate, blue collar workers Salary: weekly/Monthly rates, white Collar workers

8. The Wage determination Process

9. The Wage Determination Process Diagram 1) The Process of Job Analysis 2) Wage Surveys 3) Relevant Organisational Problems 4) Preparation of Wage Structure 5) Wage Administration Rules: (advancement will be based on Merit or length of service? Frequency of pay increases? Information to be given to employees? Employee appraisal, fixing of wages)

10. The Wage Line/ Wage Curve The wage line The 6 th Pay commission Report The 6 th Pay commission Report

11. Factors Influencing Wage & Salary Structure & Administration The Organization's ability to pay Supply & demand of labour The prevailing market rate The cost of living Living wage Productivity Trade Union’s Bargaining power Job requirements

12. Continued…. Managerial attitudes Psychological & Sociological factors Levels of Skills available in the market

13. Administration of Wages & Salaries

14. The administration should be controlled by the Personnel manager or a Committee composed of high ranking executives. Major functions of such a Committee are: 1. Approval and/or recommendation to management on job evaluation methods & findings 2. Review & recommendation of basic wage & salary structure 3. Help in formulation of wage policies from time to time 4. Co-ordination & review of relative departmental rates to ensure conformity, and 5. Review of Budget estimates for wage & salary adjustments & increases The Committee should be supported by information from other, technical staff.

15. Principles of Wage & Salary Administration Differences in pay should be based upon variations in JOB REQUIREMENTS Wages should be in line with that prevailing in the labour market Equal pay for equal work There should be recognition of individual differences in ability and contribution There should be established structure for redressal of wage complaints Wages should ensure a reasonable standard of living for the worker and his family The wage structure should be flexible WAGE COMMITTEE should be appointed for revision of wages

16. Theory of Wages Subsistence Theory The Surplus Value Theory of Wages Residual Claimant Theory Marginal Productivity Theory The Bargaining Theory of Wages Behavioural Theories: The Employee’s Acceptance of a Wage Level,The Internal Wage Structure,Wage & Salaries & Motivators

17. Minimum, Fair & Living Wage

18. Statutory Minimum Wage Bare or Basic Minimum Wage A Minimum Wage Living Wage Fair Wage The Need-Based Minimum Wage

19. Types of Wages Time Rate Piece Rate Balance or Debt Method

20. Wage Differentials

21. Why the salaries offered in Bangalore and Pune are different in spite of the same job profile? Occupational Differentials Inter-firm Differentials Inter-area or Regional Differentials Inter-Industry Differentials Personal Wage Differentials

22. Wage Differentials in India In the unorganized labour market, personal differences tend to exist The tendency appears to be towards the elimination of wage differentials Wage differentials by sex are quite common There has been a tendency towards the elimination of inter-firm differentials

23. Executive Remuneration

24. EXECUTIVE RENUMERATION UNIQUE FEATURES OF EXECUTIVE RENUMERATION 1) Cannot be compared towage schemes of other employees 2) Cannot form unions 3) Secrecy 4) Not based on individual performance but on organizational performance 5) Subject to statutory ceilings

25. Components of executive remuneration: 1) Salary: determined through evaluation and serves as the basis for other benefits 2) Bonus: Related to performance, at a certain percentage of profits 3) Incentives 4) Perquisites: medical care, free well furnished accommodation, conveyance, servants, company recreational area; mostly to make up for the taxation

26. Some generalizations related to executive compensation: Satisfaction with pay is a function of comparison with another’s pay A manager’s satisfaction with his current income and its motivational effect appear to be directly related to Anticipated pay raises The choice of merit, as opposed to seniority, as the basis for determining salary rates tends to increase with education and position The actual determinants of pay differentials seem to be job level supervisory experience and professional experience Managerial incentive compensation has tended to become flexible

27. THANK YOU!!