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7/27/2019 ch 4 wage salary admin.ppt
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Wage and salaryAdministration
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5 REASONS WHY EMPLOYEES STAY:
1. Pride in the organization. People want to work for well-
managed companies.2. Compatible supervisor. People may stay just to work for a
particular individual who is supportive of them.
3. Compensation. People want to work for companies that offer
fair compensation, including competitive wages and benefits as
well as opportunities to learn and achieve.4. Affiliation. People want to continue working with colleagues
they respect and like.
5. Meaningful work. People want to work for companies that let
them do work that appeals to their deepest, most passionateinterests.
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Top-Five Reasons Why People Quit Their Jobs
1. Management demands that one person do the jobs of two or more
people, resulting in longer days and weekend work.
2. Management cuts back on administrative help, forcing
professional workers to use their time copying, stapling, collating,filing and other clerical duties.
3. Management puts a freeze on raises and promotions, when
an employee can easily find a job earning 20-30 percent more
somewhere else.
4. Management doesn't allow the rank and file to make decisions orallow them pride of ownership.
5. Management constantly reorganizes, shuffles people around, and
changes direction constantly.
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Nature and purpose
Establishment and implementation of sound
policies and practices of employee compensation
To establish and maintain an equitable wage and
salary structure
Balancing of conflicting personnel interests sothat satisfaction maximized and conflicts
minimized
Financial aspect of needs, motivation and rewards
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Objectives
For employees
Highly skilled jobs are paid more
compensation then low skilled jobs this
eliminated inequalityChances of favoritism are minimized
Job sequence and line of promotion are
established
Employees morale and motivation are
increased
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To employers
Systematically plan for labor cost
In dealing with trade union, they can
explain it based on systematic analysis
Reduces chances of friction andgrievances
Enhances motivation and morale
Attracts qualified employees
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Compensation, Reward, wage levels
and wage structureCompensation defined as money received
in the performance of work plus benefits
and servicesMoney is included under direct
compensation while benefits come under
indirect compensation consist of life,accident and health insurance, retirement
benefits, pay for vacation and social
security
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Wage:- is remuneration paid for the service of
labor in production periodically to worker
It refer to hourly rate or daily rate paid to bluecollar workers
Salary refers to weekly or monthly rates paid to
white collar workersWage level represent money an average worker
makes in organization
Wage structure describes wage/salary relationshipwith particular grouping
The grouping can be according to occupation such
as craftsmen
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Wage determination process
. Job analysis
Jobevaluation
Wage
surveys
Wage
structure
Differential
employeeappraisal
Wage surveys
& analysis of
relevant
organizational
problems
Performance
standards
Wage
payments
Rules ofadministrat
ion
Jobspecification
job
description
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Job analysis:- results injob
descriptions which lead tojob
specificationA job is rated in order to determine its
value compare to all other job in
organization and providing it with a
price
This involves converting job value intospecific Monterey value or rate ranges
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Wage surveys:- once the relative worth of job
is done , the actual amount is determined
This is done by making wage or salary surveys
Such surveys seek to answer questions like
what are the other firms paying? What they are
doing for benefits? Level of pay offered by
other firms for similar occupations?
Relevant organizational problems:- what will
be results of paying lower or higher
compensation? Relationship between wage
structure and fringe benefits?
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Preparation of wage structure:- for this
several decision has to be taken such as
Whether organization able to pay above,below, or equal to average in industry
Whether wages ranges on merit basis or single
rates
The number and width of pay grades
Actual money value to be signed to gradesDifference between pay plans
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Defining the Labor Market
L ist of Key Job Position
Detailed Descr iption of Jobs
Collection of Salary Data
Compilation of Salary Data
Results Survey
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Rules of administration:-
To determine what extent advancement
will be on length of service rather then
merit
With what frequency pay increases willbe made
How control over wage and salary cost
can be determinedRule for promotion from one pay grade
to another
i fl i d l
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Factors influencing wage and salary
structure and admin
The organizations ability to paySupply and demand of labor
The prevailing market rate
The cost of livingProductivity
Trade unions bargaining power
Job requirements
Managerial attitude
Psychological and social factors
Levels of skills available in market
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THANK YOU