Wages concept


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Wages Concept and Compensation Philoshophy

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Wages concept

  2. 2. MINIMUM WAGES • minimum living cost • minimum level of subsistence, which includes food, clothing and shelter • fixed by the government in consultation with business organizations and trade unions • Under Minimum Wages Act, 1948, under which farm laborers to b e paid a minimum wage between 66 paise and rs. 1.50/- dsy.
  3. 3. The Benefits as follows: • These laws prevent unscrupulous employers from exploiting ignorant persons who possess very little bargaining power. • These abolish the competition of the lower strata of workers with the upper grades and tend to prevent depressing of wages. • The productivity of industry is increased by foreign employers to use the most efficient production methods and the most modern equipment, in order to enable employees to earn the living wage. But at the same time, the workers are stimulated to increase his efficiency in order to hold his job. • Employers with high standards are protected against underselling by competitors with low standards.
  4. 4. FAIR WAGES • more than the minimum wages • mean between the living wage and the minimum wage • the upper limit is the capacity of the industry to pay fair wage compares reasonably with the average payment of similar task in other trades or occupations requiring the same amount of ability • Fair wage depends on the present economic position as well as on its future prospects
  5. 5. The fair wages depends upon the following factors: (1) Minimum Wages (2) Capacity of the industry to pay (3) Prevailing rates of wages in the same or similar occupations in the same or neighboring localities (4) Productivity of labour (5) Level of national income and its distribution. (6) The place of the industry in the economy of the country
  6. 6. • Living wages has been defined differently by different people in different countries • Justice Higgins which reads "Living wage is a wage sufficient to ensure the workman food, shelter, clothing, frugal comfort, provision for evil days etc. as regard for the skill of an artisan, if he is one.
  7. 7. • According to Fair Wages Committee Report: "The living wage should enable the male earner to provide himself and his family not merely the basic essentials of food, clothing and shelter but a measure of frugal comfort including education for the children, protection against ill-health, requirement of essential social needs and measures of insurance against old age." • Article 43 of the Constitution of India states that the state shall endeavor to secure by suitable legislation or economic organization or in any other way to all workers a living wage, conditions of work ensuring a decent standard of life and full enjoyment of pleasure and social and cultural opportunities.
  8. 8. COMPENSATION PHILOSOPHIES • Entitlement Philosophy Assumes that individuals who have worked another year are entitled to pay increases, with little regard for performance differences. • Pay-for-Performance Philosophy Requires that compensation changes reflect individual performance differences.