Wages and Salary Administration
Mosammat Rasheda Khanom Lipa
Contents page no. 1.0. Introduction
2.0. What is wages and salaries
2.1. Difference between wage and salary
3.0. Wage and salary administration
3.1. Nature and purpose of wage and salary administration
2-3 3.2. Principles of wage and salary administration
4.0. Types of wages
5.0. Factors affecting wages and salaries
6.0. Factors guiding wage fixation for industrial workers
6-7 7.0. Wage differentials
8.0. Methods of wage payment system
8.1. Conventional methods
b. Time rate
a. Piece rate
8.2. Incentives bonus methods
a. Personal or individual incentives bonus
b. Halsey plan
c. Rowan plan
d. Taylor’s differentials piece wage plan
e. Merrick’s multiple piece wage plan
f. Gantt’s task and bonus plan
g. Emerson’s efficiency plan
9.0 Wage theories
9.1. Substantial theory
9.2. The wage fund theory
9.3. Surplus value theory
9.4. The residual claimant theory
9.5. The marginal productivity theory
9.6. The bargaining theory of wages
9.7. Taussings theory
9.8. Behavioral theory
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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* Khanna, O.P. (1992). Industrial Engineering & Management, Dhanpat Rai Publications (p) Limited, New Delhi, India, p. 30-1.
* Khanzode, V.V. (1992). Human Resource Management, Ashis Publishing House, New Delhi, India, p. 136.
* Monappa, Arun & Saiyadain, Mirza (1997). Personnel Management, Tata McGraw-Hill Publishing Company Limited, New Delhi, India, pp. 253-254.
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