Job evaluation provides a systematic basis for determining the relative worth of jobs within an organization based on factors like the importance of the job, skills and qualifications needed, and difficulty level. There are analytical and non-analytical methods for evaluation, such as ranking, classification, and point methods. Wages refer to payments for blue-collar work, salaries to white-collar work, and compensation includes wages and benefits. Minimum wages provide for basic sustenance while living wages provide for needs and insurance. Various laws regulate wages and benefits in India.

1. Wage and Salary
Nikhil Agarwal

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 Evaluation
Non-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.

14. Thank You