COMPENSATION

COMPENSATION


"compensation is comprehensive term which includes wages, salary, all other allowances and benefits"                               -(Wendell French)

OBJECTIVES OF WAGE AND SALARY ADMINISTRATION

1. to establish just and equitable remuneration
2. to attract competent employees
3. to retain the services of the desirable employees
4. to improve productivity
5. helps to control cost
6. to maintain good relationship
7. to create public image
8. lowest cost of production
9. to guarantee minimum wages

FACTORS INFLUENCING

1. ability to pay
2. demand and supply
3. cost of living
4. wages by other firm
5. labour productivity
6. bargaining power
7. govt policy
8. job requirements

SYSTEMS OF WAGE PAYMENT

TIME WAGE SYSTEM

merits

1. it is simple to understand
2. help to maintain quality
3. provide sense of security to workers
4. trade union accepted method
5. protects workers
6. create good industrial atmosphere
7. help to save machines from damage
8. guarantee regular wage to employees

demerits

1. no distinguish between efficient and in-efficient workers
2. continuous supervision is necessary
3. payment for time not for work
4. it is difficult to measure labour cost 
5. guaranteed payment make difference in workers

PIECE RATE SYSTEM

merits

1. it is simple to understand and easy to calculate
2. the workers keep busy in their works
3. cost  per unit can easily calculated
4. laboures try to produce more goods
5. management can distinguish between efficient and in-efficient workers
6. efficient workers get better reward

demerits

1. the workers try to produce more goods at all time , it will reduce quality
2. new workers are not able to produce more
3. minimum wages are not guaranteed
4. to ensure quality strict supervision is needed
5. opposed against labour union
6. workers handle machines carelessly

THE PROCESS OF WAGE DETERMINATION

1. JOB ANALYSIS
2. JOB EVALUATION
3. WAGE SURVEY
4. PRICING JOB STRUCTURE
5. DEVELOPING JOB STRUCTURE
6. METHOD OF JOB PAYMENT
7. WAGE ADMINISTRATION RULE
8. EVALUATION OF WAGE AND SALARY ADMINISTRATION