2. Job Evaluation It provides a systematic basis for determining the relative worth of jobs within an organization.Features: Relative importance of the job KSA’s needed to perform the job. Difficulty of Job. Benchmark Jobs: Job found in many organizations and performed by several duties that are relatively stable and require similar KSA.
3. Methods of EvaluationNon-Analytical Methods:1. Ranking Method: Places jobs in order, ranging from highest to lowest in value to the organization.2. Classification Method: Descriptions of each class of jobs are written and then each job in organization is put to grade according to the class description it best matches.
4. Analytical Methods:1. Point Method: Break jobs into compensable factors which identify a job value out of a group of jobs and places points on them.2. Factor Comparison Determining the benchmark jobs, selecting compensation factors and ranking all benchmark jobs factor by factor. Assignment of monetary value to each factor. Evaluate all other jobs in the organization by comparing them with the benchmark jobs.
5. Equity Theory States that individuals compare their job inputs and outcomes with those of others and then respond to eliminate any equity. Internal Equity: The method undertakes the job position in the organizational hierarchy. The fairness is ensured using job ranking, job classification, level of management and level of status. External Equity: The market pricing analysis is done. Organizations formulate their compensation strategies by assessing the competitors’ or industry standards.
6. Wage, Salary and Compensation Wage: Paid to blue-collar workers - paid daily, weekly or monthly-paid for the jobs which can , to some extent, be measured in terms of money’s worth. Salary: Paid to white collar workers - paid monthly to employees whose contribution cannot be easily measured. Compensation: A comparative term - includes wage and all other allowances and benefits like allowances, leave facilities, housing, travel and non- cost such as recognition, privileges and symbols of status.
7. Minimum, Living, Fair Wages Minimum Wages: It must provide not only for the bare sustenance of life but for the preservation of the efficiency of the workers by providing some measures of education, medical care, etc. Living wages: It is not only for the bare essentials for the worker and his family, but also for protection against ill-health, decency, social needs and insurance for old age. Fair wages: It is in-between minimum wages and living wages, but below the living wage.
8. Factors affecting wages Wage policy of the company. Prevailing wages in the region. Financial position of the company. Trade Unions’ pressure on the Management. Government policy on wages and salaries. Relative worth of job done. Demand and supply of labor. Economic conditions of the nation.
9. Minimum Wages Act 1948 Enacted to safeguard the interests of workers by providing for the fixation of minimum wages in certain specified employments. Minimum wage and an allowance linked to the cost of living index and is to be paid. The minimum rate of wages consists of a basic wage and a special allowance, known as Variable Dearness Allowance (VDA)‘.Methods Committee Method Notification Method
10. Payment of Gratuity Act 1972 The Act was enacted to provide for a scheme for the payment of gratuity to employees engaged in factories, mines, oilfields, plantations, ports, railway companies, shops or other establishments employing ten or more persons. Gratuity shall be payable to an employee on the termination of his employment after he has rendered continuous service for not less than five years:- (i) on his superannuation; or (ii) on his retirement or resignation; or (iii) on his death or disablement due to accident or disease.
11.  The employer shall pay gratuity to an employee at the rate of fifteen days wages based on the rate of wages last drawn by the employee concerned for every completed year of service or part thereof in excess of six months. In the case of a monthly rated employee, the fifteen days wages shall be calculated by dividing the monthly rate of wages last drawn by him by twenty- six and multiplying the quotient by fifteen.
12. Payment of Wages Act 1936 Enacted to regulate the payment of wages to workers employed in certain specified industries. The person responsible for payment of wages shall fix the wage period up to which wage payment is to be made. No wage-period shall exceed one month. All wages shall be paid in current legal tender, that is, in current coin or currency notes or both. However, the employer may, after obtaining written authorisation of workers, pay wages either by cheque or by crediting the wages in their bank accounts.
13. Maternity Benefit Act 1961 Regulates employment of women in certain establishments for a certain period before and after childbirth and provides for maternity and other benefits. No employer shall knowingly employ a woman in any establishment during the six weeks immediately following the day of her delivery or her miscarriage. Every woman shall be entitled to, and her employer shall be liable for, the payment of maternity benefit at the rate of the average daily wage for the period of her actual absence immediately preceding and including the day of her delivery and for the six weeks immediately following that day.