Wage and Salary Administration

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Wages and Salary Administration
Present by,
Mosammat Rasheda Khanom Lipa

Contents page no. 1.0. Introduction 1
2.0. What is wages and salaries1
2.1. Difference between wage and salary1-2
3.0. Wage and salary administration2
3.1. Nature and purpose of wage and salary administration2-3 3.2. Principles of wage and salary administration3-4
4.0. Types of wages4-5
5.0. Factors affecting wages and salaries5-6
6.0. Factors guiding wage fixation for industrial workers6-7 7.0. Wage differentials7-9
8.0. Methods of wage payment system9
8.1. Conventional methods 9
b. Time rate9-10
a. Piece rate10-11
8.2. Incentives bonus methods 11
a. Personal or individual incentives bonus12
b. Halsey plan12
c. Rowan plan12-13
d. Taylor’s differentials piece wage plan13-14
e. Merrick’s multiple piece wage plan14-15
f. Gantt’s task and bonus plan15-16
g. Emerson’s efficiency plan16-17
9.0 Wage theories17
9.1. Substantial theory17
9.2. The wage fund theory 18
9.3. Surplus value theory18
9.4. The residual claimant theory18
9.5. The marginal productivity theory18
9.6. The bargaining theory of wages18-19
9.7. Taussings theory19
9.8. Behavioral theory19-20
10.0. Conclusion 20
References

1.0 Introduction
Sound wage and salary administration is one of the most important managerial functions. Its importance is evident from the fact that a majority of union-management disputes relate to the question of wage payment. Wages and salaries are often one of the largest components of cost of production and as such have serious implications for growth and profitability of the company. Wages and salaries play a very important role in determining the conditions of employment. The relationship between employers and employees depends mainly on wages. Wage and salary administration refers to the framing and implementation of policies and practices pertaining to employee compensation. Its includes development of wage structure ,wage surveys, wage incentives, profit sharing, wage adjustments and other related items concerning payment. Wages and salaries constitute a major part of the total cost in most of the organization. 2.0 What is Wage and Salary

The wage is the remuneration paid by the employers to his employees. According to laissez faire policy, wage is the price paid to the worker for the services he has sold to the employer. It is a compensation paid to the worker in return for the contribution he makes for the achievement of the corporate objectives (Khanzode, 1992: 118). Wage may be defined as payment for the use of labor (Khanna, 1992: 30-1). The wage is the price for the use of human efforts (Ahuja, 1993: 927). Wages is the widest sense means any economic compensation paid by the employer under some contract to his workers for the services rendered by them. Wage therefore includes family allowance, relief pay, financial support and other benefits. But, in the narrower sense, wages are the price paid for the services of labour in the process of production and include only the performance wages or wages proper. They are composed of two parts the basic wage and other allowance. As salary is a compensation to an employees for the personal services rendered on weekly, monthly or annual basis. Salary is usually associated with office employees, supervisors, managers and professional as well as technical staff etc (Khanzode, 1992: 119). Salary normally refers to those payments that are computed on a weekly, monthly or yearly basis...
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