This document discusses wages and salaries as forms of employee compensation. Wages are based on an hourly rate and the number of hours worked, so paychecks vary each period depending on hours. Salaries are fixed annual amounts paid regularly in installments regardless of hours. Wages typically receive overtime pay for hours over 40 per week, while high-paid salaried employees usually do not receive additional pay for overtime hours.

1. Wages and salary
Compensation Management

2. Prepared By
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Manu Melwin Joy
Assistant Professor
Ilahia School of Management Studies
Kerala, India.
Phone – 9744551114
Mail – manu_melwinjoy@yahoo.com

3. Wages
• Wages is best associated with
employee compensation
based on the number of
hours worked multiplied by
an hourly rate of pay.

4. Wages
• For example, an employee working
in an assembly plant might work 40
hours during the work week. If the
person's hourly rate of pay is $15,
the employee will receive a
paycheck showing gross wages of
$600 (40 x $15).

5. Wages
• If the employee had
worked only 30 hours
during that week, her or
his paycheck will show
gross wages of $450 (30 x
$15).

6. Wages
• Because the paycheck needs to
be computed based on the
actual hours worked, the
employee earning wages will
likely receive her or his paycheck
five days after the work period.

7. Salary
• Salary is best associated
with employee
compensation quoted
on an annual basis.

8. Salary
• For example, the manager
of the assembly plan might
earn a salary of $120,000
per year. If the salaried
manager is paid semi-
monthly (perhaps on the
15th and last day of each
month), her or his paycheck
will show gross salary of
$5,000 for the half-month.

9. Salary
• Since the salary is the
same amount for each pay
period, the salaried
employee's paycheck will
likely cover the work
period through the date of
the paycheck.

10. Salary
• Since the salary is the
same amount for each pay
period, the salaried
employee's paycheck will
likely cover the work
period through the date of
the paycheck.

11. Wages and Salary
• Generally, the hourly-paid
employees will earn wages
at the rate of time and one-
half for the hours in excess
of 40 per week.

12. Wages and Salary
• The salaried employees in
high pay positions are not
likely to receive additional
pay for the hours in excess
of 40 per week. However,
employees with low salaries
are entitled to overtime pay.