WAGE ADMINISTRATION

Presented by
Agnel K.Joy
Wage Administration

 Basic purpose of wage and salary

administration is to establish and maintain an
equitable wage and salary structure
 Secondary objective is the establishment &
maintenance of an equitable labour cost
structure
 It is concerned with the financial aspects of
needs, motivation & rewards
Activities of wage and salary
administration
 Job evaluation
 Surveys of wage and salaries
 Analysis of relevant organistional problems
 Establishing rules for administrating wages
 Wage payments
 Profit sharing
 Wage changes and adjustments
 Control of compensation and other related
items
Objectives:-
 For employees

o Paid according to requirements

o Job sequences and line of promotion are established
where they are applicable
o Employees motivation are increased

 To employers

o Systematically plan for and control their labour costs

o In dealing with trade union they can explain the basics of
their wage programme
o Attracts qualified employees
Steps of wage determination process

1. Performing job analysis

2. Wage surveys
3. Analysis of relevant organizational problems
forming the wage structure
4. Framing rules of wage administration
5. Explaining these to employee
6. Assigning grades & price to each job and
paying the guaranteed wage
Factors influencing Wage and Salary
Administration
 The organizational ability to pay
 Supply and demand of labours
 Prevailing market rate
 Living wage
 Productivity
 Job requirements
 Managerial attitudes
 Trade unions bargaining power
Principals of Wage and Salary
Administration
 There should be a definite plan to ensure the
differences in pay of jobs
 General level of wage ad salary should be that
of prevailing in labour market
 Plan should carefully distinguish between the
jobs and employees
 Equal pay for equal work
 An equitable practice should be adopted for
the recognition of individual differences in
ability and contribution
principle continues:-
 There should be a clearly –established
procedure for hearing and adjusting wage
complaints
 Employees and trade union, should be
informed about the procedure used to establish
wage rates
 Wage should be sufficient for a reasonable
standard of living
 Wage and salary structure should be flexible
 For revision of wages, a wage committee
should be preferred