WAGES AND SALARY MANAGEMENT

CHAPTER: 1 INTRODUCTION
One of the most important factors in Human Resource is compensation management. The
soundness of compensation management depend upon the amount of wages or salary is paid
to an employee for a fair days work.

Wages and salary administration refers to the established and in implementation of sound
policies and practices employee compensation. Wages and salary administration one of the
vital areas of the personnel administration. For sound wages and salary policies and
programmers are essential. To procure, maintain, develop, promote, and to get effective
results from them

"Wage and salary" is a practical study performance of a company practically adopted.

Among the four most important Ms, Men playa dominant role. The only way by which men
can be gained, retained and satisfied is through wages and salaries. This study is made to
know how the employees are graded and how they are paid wage and salaries. Wages are
paid by hourly or daily, whereas salaries are paid by monthly basis. Wage and salaries for a
particular employee or employer depends upon the various factors like his grade, position,
qualifications, place (urban,n rural etc), inflation, type of organization, industry, etc. Per-capita
income of a country is calculated upon the wage or salaries of an individual.
The title of the project is "wages and salary management-A study with reference to Sarji
health care shivamogga" Wage is the compensation an employee receives in return for his or
her contribution to the orgvanization. Wage occupies an important place in the life of an
employee. His or her standard of living, status in the society, motivation, loyalty and
productivity depend upon the wage he or she receives. For the employer too, employee wage
is significant because of its contribution to the cost of production. Besides, many battles (in
the form of strikes and lockouts) are fought the employer and the employees on issues
relating to wages of bonus. For HRM too, employee wage is a major function.
The ct of human resource management. What is wage and salary administration? Wag
salary administration is essentially the application of a systematic approach to the problem of
ensuring that employees are paid in a logical, equitable and fair manner. The term salary is
defined as the remuneration paid to the clerical and managerial personnel employed on
monthly or annual basis.
This distinction between wage and salary does not seem to be valid in these days of
human resources approach where all employees are treated as human resources and are
viewed at par. Hence these two terms can be used interchangeably. As such, the term Wage
and or salary can be defined as the direct remuneration paid to an employee compensating
his services to an organization. Salary is also known as basic pay. One of the most important
function of human resources is the payment of the proper salaries and the wage to all
company employees. The pay that the employees receive from their employer is the very
reason for their being in the job the function of the payroll is a company is usually the wage
and salary administration and it is carried out by the human resources department. Wage and
salary administration affect levels of employee commitment to the organisation. However,
fascinating the individual's job assignment is, the employee must be paid. Pay affects the way
people work-how much and how well. A large part of the compensation that people receive
from work is monetary. Although managers are expected to conserve money and distribute it
wisely, many employees feel that they should get more of it for what they do. Wages, salaries
and many employee benefits and services are form of compensation.
importance to employee the importance of a pay system to an event of major and its
effects upon them cannot be ignored. It is a valid system if it results in a structure acceptable
to both employee an employer. In general, structure that are internally and externally
consistent have the greatest chance of affecting overall satisfaction. Under reward, over-
reward and inconsistency of reward not only tend to lead to lower satisfaction but encourage
behavior that often proves dysfunctional to organizational objectives. A sound, systematic,
consistent system of compensation determination will do much to promote equity and
satisfaction, provided that such a system is understand and accepted by most employees.

Definition and Concepts of Wage and Salary:

Wage and salaries are defined as the hourly, weekly and monthly pay that employees
receive for their work in and organization.
Someone's wages are the amount of money that is regularly paid to them for the work
that they do.
Indian Labour organization (lLO) defined the. term wage as "the remuneration paid by the
employer for the services of hourly. Weekly and fortnightly employees. It also means that
remuneration paid to production and maintenance or blue collar employees.
Wage and salary administration IS essentially the application of a systematic approach
to the problem of ensuring that employees are paid in a logical equitable and fair manner and
the terms used are wage. Salary. Earnings. Nominal wage. Real wage, take home salary,
minimum wage, statutory minimum wage, the need based minimum wage, the living wage
the fare wages, incentive wages, wage rate, standard wage rate
A wage is the cash payment made to the workers as per the contract made by the
employer. Precisely, a wage is the remuneration paid for the service of labour in production,
periodically to an employee/worker. Wages usually refer to the hourly rate paid to such group
as production and maintenance of employees. It is a general term referring to direct monetary
compensation. Wage Levels The wage levels represent the money an average \ orker makes in
a geographic area or in his organization. It is only an average a pecific markets tr firms and
individual wages can vary widely from the a rage. Wage Structure The term wage structure is
used to describe wage/salary relationship within a particular grouping. The grouping can be
according to occupation or organization, such as wage structure for craftsman. Wage and
Salary Administration It refers to the establishment and implementation of sound policies and
practices of employee compensation. They affect levels of employee commitment to the
organization. The basic purpose of Wage and Salary Administration is to establish and
maintain an equitable wage and salary structure. Its secondary objective is to establish and
maintain an equitable labour cost structure. According to D.S Beach, Wage and Salary
programs have four major purposes
1. To establish a fair and equitable compensation offering similar pay for similar work.
2. To attract competitive and qualified personnel.
3. To retain the present employees by keeping wage levels in tune with competitive
unites.
4. To improve motivation and morale of employees and to improve management
relations.
5. To keep labor administrative costs in line with the ability of the organization to pay.
6. To project a good image of the company and comply with legal needs relating to
wages and salaries.
7. To establish job sequences and lines of promotion wherever applicable.
8. Retain the employees in the organization.
9. Maintain equity and fairness in compensation for similar jobs.
10. Enable an organization to have the quality and quantity of staff it requires.
11. To reach help the organization reach its goals.
Background of Study:
We use a lot of word to describe the importance of the people to organizations. The
term "Human resources" implies that people have capabilities that drive organizational
performance (along with other resources such as money, materials, information and the like).
Other term such as "Human capital" and "Intellectual assets" all have in common the idea that
people make the difference in how an organization performs. Successful organizations are
p311icularly adept at bringing together different kinds of people to achieve a common
purpose. This is the essence of Human Resource Management. Wage and salaries. Wages are
paid by hourly or daily, whereas salaries are paid by monthly basis.
Wage and salaries for a particular employee or employer depends upon the various
factors like his grade, position, qualifications, place (urban, rural etc), (Inflation), type of
organization, industry, etc Per-capita income of a country is calculated upon the wage or
salaries of an individual. This study helps to know how to compensate the work done by
individual in an organization.
Statement of the Problem:
Study of wage and salaries of an organization is very important because it helps to know
whether the employees are rightly compensated for their work. It also helps to know whether
the employees are satisfied with their wages and salaries. It is also important to know
whether the company is following the right pay scale. To know vanous allowance, like washing
allowance, stitching allowance, city compensatory allowance, perks allowance etc.

Research Design:
"Wage and salary" is a practical study of performance of a company practically adopted.
Among the four most important Ms, Men playa dominant role. The only way by which men
can be gained, retained and satisfied is through wages and salaries. This study is made to
know how the employees are graded and how they are paid
Objectives of the Study:
The specific objectives of the study are as Follows
 To study the fluctuations in wages and salary policies of management and employee
satisfaction.
 To bring out the findings of wage structure.
 To know the different allowances.
 To know the level satisfaction of the employees regarding the wage and salary
administration.

Salary:
Fixed periodical payment to a person doing other then manual or mechanical work. It
refers to monthly rate of May. Irrespective of the number of hours put by an employee.
Wages:
Payment paid for manual and mechanical work is wages. Represent hourly rates of pay
‘’wages mean all remuneration capable of being expressed in terms of money which would if
the terms of the contract employment express or implied, were fulfilled, be payable to a
person employed in respect of his employment or of work done in such employment.’’

What is Salary and Wage Administration?

Salary and wage administration is the process of compensating an organization's
employees in accordance with accepted policy and procedures. An important component of a
successful organization's policy for administering salaries and wages is monitoring and
evaluating all employees' compensation to ensure that they're being paid appropriately, both
with respect to others in the same organization and to the marketplace as a whole. This
process is often an integral function of the organization's human resources department, but in
general, the larger the organization, the more likely is that it will be handled by a separate
department.
Factors affecting wage and salary levels
Remuneration in comparable industry:
ity, efforts and mental and physical requirements.
'Wage and salary administration plans must always be consistent with overall
organizational plans and programmes.
Minimum wages act 1948:
Minimum wages act is based on skill, unskilled, semi-skill, super¬skill. State government
will issue the notification of wages what a company should pay for the employees. Even for
contract basis employees are also comes under unskilled labour.
According to this act, employees whose wages average IS more than Rs 16000/- in a
month are covered under the act.
The payment of bonus Act 1965:
In the earlier days bonus may be called asb "Bhakshish". This act shall apply to every
factory and every establishment in which 20 or more persons are employed on any day during
an accounting year. A person or employee who is getting less than Rs.3500 is eligible to take
the bonus. A temporary workmen also a eligible person to take the bonus.
Even a probationary employee is also eligible to take bonus or a piece rate worker is
paying 8.330/0 minimum bonus every year, weather the company is under loss or profit.
Equal Remuneration Act
 According to this act there is no discrimination of male and female. For both men and
women en employees are paid equal remuneration. In this Act there will be no sex
differentiation.
Purpose of wages and salary:
 Attracting talented resources
 Retaining and motivating employees
 Financial management
 Legal requirements
 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.
 Wage boards pay commissions
 Wage policies are formulated by following instructions in India

Evolution of Strategic Compensation

Figure
Traditional Compensation System
Modern
Compensation
Systems
Collective bargaining and adjudication
 Wage boards
 Pay commissions
Payroll Processing:
Accountant
Payroll Outsourcing
CHAPTER: 2
REVIEW OF LITRECTURE
This chapter will describe the knowledge acquired from literature reviews to the scope of
research.
1) Book: Human Resource Management (Including Skill Development)
Authour Prof. H. R. Appannaiah, Dr. P. N. Reddy, K. Aparna Rao
Publication Himalaya Publishing House
Year 2010
Page No. 13-15
In the later part of 1980s very many innovative practices emerged on the corporate
scene. Human Resource Development is one discipline which was assume as a vital activity to
envelopment the business in an organization. Since then all most all business houses
considered HRD as a big factor for success and established HRD wings in their organisations,
formulate HRD policies and appointed HR personnel to implement these polices. During this
period, to give a clear picture of HRD, voluminous literature was rolled out by publishers and
written by great scholars. They tried and analyzed the distinction between traditional
practices which were called 'Personal Management' and Human Resources Management
(HRM). The title is subdivided into chapter throwing light on the main theme of HRM. Each
chapter contains, learning objectives, text summary, graded review question for better
understanding of the subject and kill exercises. It is written in a direct style and is easy to
understand we earnestly hop that our renders will enjoy reading this title.

2) Book Human Resource Management Theory And Practice

Author Prashanth
Publication Abhijeet Publication
Year 2015
Page no 9-22
The present text Human Resource Management helps student to understand the
fundamental concept, Functions and roles of Human Resource Management. Several district
approaches have been developed for studying and analyzing the Human Resource
Management practice, the organization of this book follows the well structure approaches. As
such, the whole text has been divided into seven chapter-introduction to HRM, Human
Resource planning, Recruitment and selection, Training and development, wage and salary
administration, personal records Auditing and Research and Employee welfare and safety. The
book discusses the issues in human resource management in a changing environment and
suggests possible ways of leveraging and managing human resource.

3) Book : Essentials of Human Resource Management and Industrial

Relations
Author P. Subba Rao
Publication Himalaya Publishing House
Year 2013
Page no 14-20

Human Resource take active role in the modern economic scenario of any country. The
abundant physical resources alone cannot benefit the growth of the country without human
resource components, which transforms physical resource into productive resource. HRM is
adjudged as the most important area. In the management of four MS, Money, Materials,
Machines and men, it is needless to be labor the obvious point that, considering the nature of
man, the management of men is not only, fundamental but also dynamic and challenging
management of human resource includes guiding human resource into a dynamic
organization that attains its objectives with a high degree of moral and to the satisfaction of
those concerned with it.
The concept of Human Resource Development assumes Immense Importance as HRD
plays vital role in meeting the challenging requirements of highly skilled and competent
human resources due to globalization. Further maintenance of industrial peace plays a vital
role, as Indian economy cannot afford industrial unrest in the context of global competition.
Against this background, an attempt is made to present essential concept of human resource
management and industrial relation useful to the student.

4) Book Human Resource Management: Contemporary Issues, Challenges, and

Opportunity Contemporary human resource management
Author Ronald R. Sims
Publication Information Age Publishing
Year 2007
Page no 111-591
The contributors in this book identify and clearly discuss contemporary and critical
issues, challenges and opportunities in HRM. The book attempts to achieve the delicate
balance between basic HRM functions, and the new world of HRM. Moreover, in a dynamic
field like HRM, a complete look at contemporary HRM issues, challenges, and opportunities is
a must for today's and tomorrow's students and future manages and leaders. After all, it is
important for any book to undertake a current state of the field while also bridging the gap of
traditional HRM activities (i.e., issues, challenges and pp trinities) and the possible future state
of the HRM field. An organizing principle for this book is the need to for an integrated HRM
system, comprised f multiple activities, designed to influence organizational and employee
behavior. The books contributors include some basic theories and models that simultaneously
consider how HRM activities like recruitment, selection, reward practices, and development
activities among others are being impacted contemporary issues, challenges and
opportunities for the field of HRM, particularly HRM functions and professional as they are
increasingly expected to play a role in enabling organizational managers and other employees
to achieve desired organizational results. Thus, the essence of the book is that the collective
chapters reflect both a functional orientation built on theory and models but also provide
insights into how to translate theory into practice via the establishment of the increasingly
critical role HRM procedures, practices, and processes play in accomplishing the goals and
objectives in contemporary organizations.

5) Book Human resource management

Author Pradeep Rohilla
Publication A P H Publishing Corporation
Year 2010
Page no 6-10

Human Resource Management (HRM) is the function within an organization that

focuses on recruitment of, management of a providing direction for the people who work in
the organization. This book provides an authentic account of the recent development in the
field of HRM and its impact n the success of organizations today. Whether you are currently a
practicing human resource management professional or plan to HR knowledge in our carrier
and this book blends theory and practice as it highlights the latest trend in human resource
today, including strategic HRM, human resource planning, workplace relation, employee
compensation, employee motivation, performance management, diversity management,
corporate social responsibility, HRM evolution and so on. An updated research and academic
approach with relevant examples demonstrates how HR is contributing to and impacting
overall organizational success. The book will be an essential information resource for today's
human resource management.

6) Book Human Resource Management: Text and Cases

Author K Aswathappa
Publication: McGraw Hill Education (India) Private Limited
Year 2013
Page no 10-14

This book on Human Resource & Personal Management is a modest but sincere attempt
towards the understanding of human resource in its proper perspective. The contents have
been logically divided into six sections to enable the reader to comprehend thoroughly the
vital aspects and application of the various principle of human resource management. This
text is replete with illustration examples and anecdotes drawn from the contemporary
business. World in all, the book provides a refreshing and rewarding insight into all that a
reader \ ants to know about management of human resource.

7)

Justifications of Study:
Wages and salary is a hot potato for the human resource department. The motivation
level of the employees to great extent lies in monitory rewards. In the current, 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 managers face today is retention of the man power and the
major cause of it is that they are paid better in the other organizations.