designing a wage survey

7/27/2019 designing a wage survey

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Sixth Central Pay commission

andDesigning a Wage Survey

Submitted by:

Mannan Bobde

Rachyeta Shetty

Priyanka Banka


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Sixth Central

Pay Commission


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Set Up : 5 October 2006.

Purpose: For revising the salaries of central

government's employees.

The commission was set up under Justice

B.N.Srikrishna with a time-frame of 18 months.

Other members were Prof. Ravindra Dholakia, Mr.

J.S.Mathur and Member-Secretary Smt. SushamaNath

Introduction


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Approval: The cabinet has approved sixth paycommission recommendations with some

modifications on 14 August.

Amendment: The report led to a 6% increase in

dearness allowance for central govt employees from

16% to 22%.

Consequences: The implementation would put an

additional 20,000 crore burden on the centralgovernment.


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Pay Hike: Pay substantially hiked by an average

40%.

Date of Implementation: Implementation of the

revised pay scales had been done retrospectively fromJanuary 1, 2006.

Running Pay Bands: All posts in the Government

presently existing in scales below that of Rs.26,000

(fixed), spreading over 20 grades across four distinct

pay bands.

Features Of 6th Pay Commission Report


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Minimum and maximum salary: Minimum salary

at the entry level of PB-1 pay band to be Rs.6660

(Rs.4860 as pay in the pay band plus Rs.1800 asgrade pay). Maximum salary at the level of

Secretary/equivalent to be Rs.80000. The minimum:

maximum ratio 1:12.

Annual increment: Annual increments to be paid in

form of two and half percent of the total of pay in the

Pay Band and the corresponding grade pay.

Variable increments: Another form of differentialincrements for Group A Pay Band PB-3, where

annual increments in the band will vary depending

upon the performance.


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Military Service Pay: 11.9 Military Service Pay forall personnel of Defence Forces till the level of

Brigadier/equivalent. The Military Service Pay tocount for all purposes excluding increments.

Holistic nature of recommendations: All therecommendations to be treated as an organic whole as

partial implementation will bring in several anomaliesand inconsistencies.

Selection for higher posts in future: Certain postsin Senior Administrative Grade (SAG) and Higher

Administrative Grade (HAG) requiring technical orspecialized expertise being filled by suitable officerswithin the Government as well as by outsiders oncontract.


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Performance Related Incentive Scheme (PRIS):

Introduction of PRIS in the Government under which

employees to be eligible for pecuniary remunerationover and above the pay.

Special incentive for scientists, etc.: System put in

place for giving market driven compensation package

to young scientists and posts requiring special

expertise and professional skills.

Dearness allowance: Base year of the Consumer

Price Index (CPI) to be revised as frequently asfeasible. Formulation of a separate index for

Government employees suggested.


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Recommendations relating to Allowances: Existingrates of most of the allowances to be doubled both in

case of Defence Forces as well as civilianemployees.(i) Existing rates of HRA to be retained for A-1 citieswith A, B-1 & B-2 cities being given this allowanceat the rate of 20%.

(ii) Rates of Education allowance reimbursement tobe raised from existing Rs.50 to Rs.1000 per child permonth, subject to the maximum of two children.(iii) Transport Allowance to be increased every yearon the basis of the increase in the dearness allowance.

(IV) Transport Allowance to be increased every yearon the basis of the increase in the dearness allowance


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Designing a wage

survey.!!


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What is Wage Survey?


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Significance of Wage survey to the

organisation. Where are the actual W/S today?

What in the trend of market labour prices?

What should be the projected pay hike for nextyear?

What different management tools developed andbeing used by others to manage compensation

effectively? How do others similar organisation manipulate

fringe and benefits to attract talents?


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Purpose of Wage Survey.

To compare to draft company HR policy.

Find out the income level and the return ratio of the similarindustries.

To understand wage differentiation.

To examine the competitiveness of entry level employees. To establish hiring rate favourable to the company.

To keep abreast wage and salary rates with production cost.

To minimise labour turnover due to pay disparity.

To increase employee satisfaction and moral. To learn about the perks and benefits in the market.

To resolve existing labour problem concerningcompensation.


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Types of W/S surveys

Commissioned orpackaged survey

(generally publishedsurvey)

External orparticipative

(Compensation clubsurvey)

Internal or mutual(customised survey)

Types of Wage survey.


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Commissioned or packaged survey

(generally published survey)

The data are collected from a research body or

agency that keeps on conducting such surveys

and provides the data on request.

They charge for it.


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External or participative

(Compensation club survey)

In this survey member industries share the

data with the member who wishes to do the

survey through questionnaires or personalmeeting or phone calls.


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Internal or mutual (customised

survey) The types of survey is done within the

organisation and involves dissemination of the

internal records or questioning personal or

employees

In this type of survey the surveyors

extrapolate the existing secondary data of the

company to work out wage differentials.


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Application of Wage and Salary

Surveys Designing a new recruitment policy

Designing a compensation policy to give

better satisfaction to the existing employees.

Analyzing the impact of demand and supply

ratios on compensation.

To build and maintain the companys image as

a good pay master.


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W/S survey Process

Planning forthe purpose

Selecting

source ofdata andsampletools

Conductingsurveys

Analysingandinterpreting

data

Concluding


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Decides: what? Why? Where? Who? And When?

Which jobs of which nature are to be compared?

What class of workers compensation is to besurveyed?

Which company and area are to be surveyed andthe employees cadre are to be determined.

Then decide who and when will conduct thesurvey and plan the method, sample, time andtools of collecting the data to be planned.


Selectingsource ofsate andsample

tools

Conductingsurveys

Analysingand

interpreting

data

Concluding


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Source and the sample size will depend on the class orthe type of survey, and the survey method adopted.

If it is a commissioned or packaged survey, we need todecide the institution, agency or the managementconsultancy to collect the data.

In case of an external or participative survey, we needto decide the names of the member industries as a

sample.

In an internal survey we need to identify which jobsdetails are required, and what records or informationare required.


Selectingsource ofdata andsampletools

Conductingsurveys

Analysingand

interpreting

data

Concluding


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Depending upon the type of survey, the

questionnaire, the points for discussions and

the format for recording the data should be

first determined.


Selectingsource ofdata andsample

tools

Conductingsurveys

Analysingand

interpreting

data

Concluding


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Data is when analyzed and interpreted in line

with the purpose of the survey such as:

- Entry level job rate.

- Position of the company on the market.

- Company pay structure in line with the

competitors.- Factor to be considered for designing pay

structure.



tools

Conductingsurveys

Analysingand

interpreting

data

Concluding


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The observation or findings are then

summarized to have comprehensive data to

design the appropriate compensationstructure.



tools

Conductingsurveys

Analysingand

interpreting

data

Concluding


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Wages and Salary Survey Methods

Observation Method

Personal Interview Methods

Executive Views Method


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Wage and Salary Survey Effectiveness

depends on Frequency of Survey i.e. .The number of surveys

per year to accurately update the data.

Security of labour and wage structure reforms toaccommodate the findings.

Reliability of data which depends on thecompetency of the surveyor and the frankness of

the respondent. Scope to cover the area and levels and locations.

The reliability of the data.


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Bibliography

http://pensionersportal.gov.in/sixthcpc.asp

http://finmin.nic.in/6cpc/

Compensation Management by- Soni Shyam

Singh
http://pensionersportal.gov.in/sixthcpc.asphttp://finmin.nic.in/6cpc/http://finmin.nic.in/6cpc/http://pensionersportal.gov.in/sixthcpc.asp


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designing a wage survey