COMPENSATION

REWARDS
WAGES/ SALARY
SALARY
DIFFERENTIALS
BONUS

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REWARDS

Rewar
ds

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REWARDS
INTRINSIC

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WAGE- Def. of ILO Remuneration for hourly,

monthly,
weekly services rendered by employees for an
employer and
are paid an remuneration.
SALARY- It is known as basic pay and it is an
remuneration paid
to clerical and managerial personnel employed on
monthly
or annual basis.
EARNINGS The total amount of money paid
which include
salary, dearness allowance ,HRA , other
allowances , overtime
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STATUTORY MINIMUM WAGE- The amount of

remuneration fixed according to the
provisions of the Minimum Wages Act,1948.
WAGE RATE The amount of remuneration
for a unit of time excluding incentives
,overtime , pay etc.
STANDARD WAGE RATE It is the amount of
wage fixed for a unit of time fixed on the
basis of job evaluation standards.
FAIR WAGE - They are equal to that amount
of wages received by workers performing
work of equal skill , difficulty or
unpleasantness.
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To
To
To
To
To
To

retain the present employees.

acquire qualified personnel .
facilitate pay roll and collective bargain
secure internal and external equity. (Sim
ensure desired behavior
keep labor and ability of administrative

OBJECTIVES OF WAGE & SALARY ADMINISTRATION

To protect the public as progressive empl

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SALARY DIFFERENTIALS

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FUNCTIONS

To attract the talented and skilled

people.
To pay on employees talent and
skills.
To satisfy the talented employees
for better pay compared to low
skilled employees.
To allow organizations build
competetive competencies.
To encourage low skilled employees
to develop skills to get higher pay.
To discriminate highly committed
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and less

FACTORS OF SALARY DIFFERENTIALS

MARKET FACTORS
Demand and Supply of Market
Regional Variations (Skill , Wage , Cost of living)
Rural and Urban Differences
Clusters and Geographic Concentrations (Metro States)
Industry Factors ( Capacity to pay , Nature of work ,
Working Environment.)
OCCUPATIONAL FACTORS
Nature and level of responsibilities , educational
qualifications ,training , knowledge ,aptitude ,attitude
,skills , mental and physical ability , length of experience.

Socio-Economic Factors
National and Regional
Per capita income
Social prejudices- Gender ,unemployment , child labor
Exploitation of illiterates and unorganized labor.
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FACTORS AFFECTING SALARY

LEVELS

Firms
ability to
pay

Remuneratio
n in
comparable
industries

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Governmenta
l Strategies

Productivit
y

Cost of
living

Union
Pressure
and
Strategies

BONUS
A LEGAL RIGHT - An Ex- Gratia Payment
was paid as Dearness Allowance during World
War II .
Payment of Bonus Act,1965 .
Secured the character of a legal right as the
worker has a share in the prosperity of the
company.
60% of surplus should be allocated by the
employer for the employees for the payment of
bonus.
Salary for the payment of bonus means PAY+
D.A.
Employees drawing a salary upto Rs.1600/- are
eligible for bonus.
Employees dismissed for fraud , theft etc . Are
disqualified for bonus.
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Minimum bonus payable is 4% of the salary or