This document discusses wages and salary administration. It covers developing a pay system by reviewing job descriptions and conducting job evaluations. It also discusses factors that affect wage levels like comparable industries, cost of living, and union pressures. The purpose of wages and salary administration is to attract, retain, and motivate employees while meeting financial and legal requirements. It distinguishes between direct compensation like base salary and indirect compensation like benefits. Principles of compensation administration include maintaining equity, competitiveness, and meeting employee expectations.

1. WAGES AND SALARY
ADMINISTRATION

2. Introduction

3. Development of A Pay System
Review of Job Description
Conduct Job Evaluation
Pay Structure
Gather Wage Survey Information
Administer Individual Pay
Adjustments
Monitor & Upgrade Pay System

5. Factors Affecting Wage / Salary Levels
• Remuneration in comparable industries
• Firm’s ability to pay
• Relating to price index
• Productivity
• Cost of Living
• Union Pressures & Strategies
• Government Legislations

6. WAGES & SALARY ADMINISTRATION
DEFINITION WAGES & SALARY
• Base wages and salaries are defined as the
hourly, weekly and monthly pay that employees
receive for their work in an Organization.
• Can term it as compensation management.
• Thus, Wage & Salary Administration is the group
of activities involved in the
development, implementation& maintenance of
a pay system.

7. Difference in Wages, Salary &
Compensation Terms
WAGES
Paid to BLUE Collared
On Daily, weekly, Monthly
Can be measured in terms
of money
SALARY
Paid to WHITE collared
Employees
Paid at specified Intervals
Paid to Employees whose
contribution cannot be
measured
COMPENSATION
Comparative Form
All Basic , gross amount ,
allowances + Benefits

8. Principles Governing Compensation
Administration
Maintaining Equity
Maintaining Competitiveness
Matching Employee Expectations
Reinforcing positive employee behavior
Eliminating any discrepancy
Optimization of management and employee
interests
Maintaining good IR and harmony

9. Purpose of Wage & Salary
Attracting talented resources
Retaining and motivating employees
Financial Management
Legal Requirements

10. DIRECT
COMPENSATION
House Rent
Allowance
Leave Travel
Allowance
Conveyance
Bonus
Special
Allowances
Medical
Reimbursem
ent
Basic Salary

11. INDIRECT
COMPENSATION
Holiday
Homes Retirement
Benefits
Leave Travel
Insurance
Hospitalizati
on
Overtime
Allowance
Flexible
Timings
Leave Policy

12. Types of Incentive Plans
• SHORT TERM PLANS:
Halsey Plan, Rowan, Barth, Point Rating System,
Progressive Bonus
• LONG TERM PLANS:
Annual Bonus, Profit Sharing
Direct Compensation
(Base Pay, Incentives)
Indirect
(Benefits)
TOTAL
COMPENSATION

13. Concepts of Different Wages
MINIMUM WAGES:
Minimum amount of remuneration paid to workes.
Under Minimum Wages Act 1948.
FAIR WAGES:
Workers performing work of equal skills, difficulty or unpleasantness
should receive equal or fair wages
Match the prevailing wage rates
LIVING WAGES:
Living wages should enable the male earner to provide for himself and his
family, not only the bare essentials of food, clothing and shelter, but also a
measure of frugal comfort including:
Education for the children , Protection against ill-health ,Requirements of
essential social needs , A Measure of insurance against the more
important misfortunes including old age

14. Wage Boards / Pay Commissions
Wage Policies are formulated by following
Institutions in India
1. Collective Bargaining & Adjudication
2. Wage Boards
3. Pay Commissions

15. Reports & Documentation
• Salary and Payroll
Processing
Statutory Payroll Reports
Leave Management
Employee Self Service
Payroll Reconciliation Tools
Reimbursements & Loans
Payroll Processors &
Outsourcers
Arrears & final settlement
Head count summary
• Payroll Journal Voucher
Payslips (print / PDF / email
/ online)
Salary Statements
Dynamic report writer tool
PF & ESI reports (monthly,
annual)
Monthly Profession Tax
reports
Income tax statement
Form 16 PDFs
Quarterly eTDS filing (Form
24Q)

16. PAYROLL PROCESSING
Payroll
Outsourcing
Payroll Software
Manual System Accountant

17. Evolution of Strategic Compensation
Traditional
Compensation
System
Change in Compensation
System
Modern
Compensation
Systems

18. Trainings
• This program focuses on building a broad understanding of
compensation, and covers:
• HR’s role in compensation
• Components of total compensation
• Laws and regulations affecting compensation programs
• Independent contractors
• Indirect compensation (benefits) programs
• Legally required programs
• Who Should Attend?
This fundamental program is designed for HR practitioners
just entering the field, established HR employees with little
or no formal training, other employees who have
responsibilities that fall under the HR umbrella, and
business owners and managers without HR departments.

19. Conclusion
• Compensation is a hot potato for the Human Resource
Department. The motivation level of the employees to
great extent lies in monetary rewards. In the current state
of affairs it is indispensable to restructure the pay models.
Similar to changes bought about in the other departments
the HR should also emphasize on restructuring the costs so
as to bring the variable cost close to zilch.
• The major challenges what manager’s face today is
retention of the man power and the major cause of it is
that they are paid better in the other organizations.