Wage and Slary

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Polytechnic University of the Philippines
Santa Rosa Campus
City of Santa Rosa, Laguna
College of Business

WAGE AND SALARY

By
Anna Marichar A. Buena
BBA MM 2-1

Human Resource Management
MANA 2043
Professor Angelita Nocon
March 2013

TABLE OF CONTENTS
Title Page...........................................................................................................................................1
Table of Contents2
Introduction3
Discussion.......................................................................................................................................4 Objectives of Wage and Salary Administration 4

Principle of Wage and Salary Administration 7
Definition and Concept6
What is Compensation Package?8
Factors Influencing Wage and Salary Administration11 Elements of Salary and Wages13
Theories of Wages and Salaries14
Conclusion16
Bibliography19

INTRODUCTION:
As money is the prime need for human beings to meet their basic needs, everyone tries to earn as much money as possible. The pay that an employee receives from his employer is the primary reason for his being on his job. He works to earn a living. His pays provide him a strong incentive to do his job well. The employee’s rate of pay often indicates his status in the organization. His wages determine not only his standard of living and the comforts that he and his family can have but also his standing in the community. It also determines what he can contribute to community development and social welfare. His pays determine his purchasing power. With higher wages he can acquire more goods and services of his family. High purchasing power for the workers stimulates the production of more goods and increases the need for more services. Hence higher pay may lead to greater production. An employee’s pay must be commensurate with his efforts. It must be equitable in relation to what the other employees get for what they do ; otherwise, he or the other employees will feel that they are being cheated. One way to retain competent employee’s and keep their morale high is to plan salary levels so as to establish uniformity of pay in relation to the jobs in the company and to those in the other business organizations in the community. One of the main roots of dissatisfaction among employees is the payment of salaries not commensurate with the responsibilities in their job. Worker’s and management may agree on the principle of “equal pay for equal work”, but there is bound to be disagreement in its implementation. The most common problem is how to determine what jobs are “equal” and how the various factors in evaluating jobs should be rated to arrive at an equitable scale that will make it possible to pay a job according to its worth.

1 Samuel Mejia Salvador, Raquel Garcia Ramos, and Ellinor Fua-Geronimo Essentials of Human Resource Management.

DISCUSSION
OBJECTIVES OF WAGE AND SALARY ADMINISTRATION
A sound plan of wage and salary administration seeks to achieve the following objectives: I. To establish a fair and equitable compensation offering similar pay for similar work. II. To attract competent and qualified personnel.

III. To retain the present employees by keeping wage levels in tune with competitive units. IV. To keep labor and administrative costs in line with the ability of the organization to pay. V. To improve motivation and morale of employees and to improve union management relations. VI. To project a good image of the company and to comply with legal needs relating to wages and salaries. VII. To establish job sequences and lines of promotion wherever applicable. VIII. To minimize the chances of favoritism while assigning the wage rates. IX. To Facilitate Payroll.

X. To Simplify Collective Bargaining Procedures And Negotiations. Principles of Wage and Salary Administration :
The following principles should be followed for an effective...
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