Wages & Salary administration
WAGES & SALARY ADMINISTRATION
Description also available in video format (attached
below), for better experience use your desktop.Introduction
·
Wages paid on
daily, weekly or on monthly basis and the work can be measured in terms of
money’s worth
·
Salary paid on
monthly basis and the work cannot be measured easily
·
Compensation refers
to the term that includes wages and other benefits like
o
Travelling allowances
o
Leave
o
Housing
·
Wages & Salary administration is a group of activities that are involve in the
o
Development
o
Implementation
o
& maintenance of a pay system
·
W&SA is a
ongoing process of managing a wage & salary structure
Objectives
& Principles of W&SA
·
Objectives
o
To have a scientific, rational & balanced
wage structure
o
To establish fair & equal compensation
o
To attract the competent personnel
o
To increase the retention of present
employees
o
To control the labor & administrative
cost
o
To improve the motivation & morale of
employees
o
To project the good image of the company
·
Principles
o
Must be flexible
o
Must be scientific
o
Should be consistent with overall plan of the
organization
o
Should be change according to the local,
state & national conditions
o
Must be simple & speedy in nature
Factor
affecting W&SA
·
Wage policy of the company
·
Job needs
·
Ability to pay
·
Cost of living
·
Prevailing wage rates
·
Unions
·
State regulations
·
Labor supply & demand
·
Economic conditions of the nation
Theories
& Development of W&SA
·
Theories
o
Classical Wage Theory (labor is a commodity
and we have to pay the price according to supply & demand)
o
Just Wage Theory (permits the worker to live
in a manner in keeping with his position in the society)
o
The Wage Fund Theory (based on law of
diminishing)
o
Bargaining Theory (labor is a commodity like
anything that could be bought at a price by the user)
o
Marginal Productivity (gives best explanation
of wages in modern industry)
o
Purchasing Power Theory (establish the
relationship between wages and the level of economic activity)
o
Labor Theory of Value (labor is the source of
all the products)
o
Standard of Living Theory (wages should be
based on the cost of living)
·
Development results in
o
Improves the worker’s living of standard
o
Ease in recruitment
o
Maintenance of an effective workforce
o
Increases the working efficiency and morale
of the labor
o
Gives competitive advantage to the industry
o
Eases the budgetary allocations
o
Remove the pay distortion and inequalities in
employee compensation
Video
Description
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