FORMULATION OF WAGE POLICY - FACTORS TO BE CONSIDERED OVERVIEW

JYOTI RAMESH KATARIYAADMISSION NO. : HPGD/JA 14/0199

SPECIALIZATION: HUMAN RESOURCE

PRIN. L. N. WELINGAKR INSTITUTE OF MANAGEMENT & DEVELOPMENT RESEARCHYEAR OF SUBMISSION : DECEMBER 2015

: I N T R O D U C T I O N :

In all countries, wage policy is a complex and sensitive area of public policy. This is because the relative status of workers in the

society, their commitment to industry and attitude towards management, their morale and motivation towards productivity, their

living standards an in fact their way of life are all conditioned by wages, Hence a policy dealing with this crucial problems cannot

be simply economic, as it has to reckon with the realities of multi-dimensional social phenomenon, in which besides the workers

and the management, the consumer and the society at large, and in consequences the state, are all vitally interested. Wage policy

is a determinant of the shares of the rival claimants to the product of industry and national dividend, but there may often be a

conflicts between private and social interest, There are, of course, theoretical generalisations or principles that may provide

scientific guidelines for framing wage policy. Equally important in this context are the concrete social facts that must be taken into

account in its formulation at any given time. NO principles of wage policy can ever be applied in vacuum and in disregard of the

realities of a situation. Wage policy has to be pragmatic though it does not follow that it has to be unscientific and remain simply a

matter of expediency.

Wage policies are principles acting as guidelines for determining a wage structure

Wage policy refers to all systematic efforts of the government in relation to national wage and salary system

CONCEPTS OF WAGES

MINIMUM WAGES

FAIR WAGES

LIVING WAGES

WAGE : Wage is paid to the assembly line workers or worker at operational level. It is paid hourly/daily/weekly

MINIMUM WAGE: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 WAGE: It is not only for the bare essentials for the worker and his family but also for comfort protection against ill-insurance for old-age .FAIR WAGE: It is in between minimum wages and living wages but below the living wage

Components of employee remunerationRemunerationFinancialNon-financialBasic wagesIncentives,Individual plansGroup plansFringe benefitsP.F.Medical careAccident relief Health andGroup insurance PerquisitesCarClub membershipPaid holidaysFurnished houseStock option schemeJob contextChallenging jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob sharing etc

                                                                                                                                                                                                        

COMPENSATION MANAGEMENT

COMPENSATION:

Compensation is what employees receive in exchange for their contribution to the organisation.

Total compensation = Direct + Indirect Compensation

Base  Pay Incentives Benefits

RemunerationFinancialNon-financialBasic wagesIncentives,Individual plansGroup plansFringe benefitsP.F.Medical careAccident relief Health andGroup insurance PerquisitesCarClub membershipPaid holidaysFurnished houseStock option schemeJob contextChallenging jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob sharing etc

                                                                                                                                                                                                        

RemunerationFinancialNon-financialBasic wagesIncentives,Individual plansGroup plansFringe benefitsP.F.Medical careAccident relief Health andGroup insurance PerquisitesCarClub membershipPaid holidaysFurnished houseStock option schemeJob contextChallenging jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob sharing etc

                                                                                                                                                                                                        

RemunerationFinancialNon-financialBasic wagesIncentives,Individual plansGroup plansFringe benefitsP.F.Medical careAccident relief Health andGroup insurance PerquisitesCarClub membershipPaid holidaysFurnished houseStock option schemeJob contextChallenging jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob sharing etc

                                                                                                                                                                                                        

RemunerationFinancialNon-financialBasic wagesIncentives,Individual plansGroup plansFringe benefitsP.F.Medical careAccident relief Health andGroup insurance PerquisitesCarClub membershipPaid holidaysFurnished houseStock option schemeJob contextChallenging jobResponsibilitiesGrowth prospectsSupervisionWorking conditionsJob sharing etc

                                                                                                                                                                                                        

WAGE

FINANCIAL NON-FINANCIAL

BASIC WAGES

•Incentives,•Individual plans•Group plansFRINGE

BENEFITS P.F. Medical care Accident relief  Health Group insurance

Perquisites Car Club membership Paid holidays Furnished house Stock option scheme

Job context Challenging job Responsibilities Growth prospects Supervision Working conditions Job sharing etc.

COMPONENTS OF WAGE

INFLUENCING FACTORS OF WAGES

WAGES

EXTERNAL INTERNAL

•Labour Market

•Cost of Living

•Labour Unions

•Govt. Legislations

•Society

•Economy

•Business Strategy

•Job evaluation &PA

•The Employee

CHALLENGES OF WAGES

WAGES

SKILLS-BASED PAY

WAGES REVIEWS

PAY SECRECY

COMPARABLE WORTH

EMPLOYEE PARTICIPATI

ON

WAGE PAYMENT SYSTEM

Piece Rate System

Time Rate System

The piece rate system is that system of wage payment in which the workers are paid on the basis of the units of output produced

Total Wages Earned= Output x Piece Rate

The time rate system is that system of wage payment in which the workers are paid on the basis of time spent by them in the factory

Wages Earned = Time spent(Attended) x Wage rate per hour/day/week/month

PRINCIPLES OF WAGES AND SALARY ADMINISTRATION  Pays varies as per skills required

General level of wages should be proportionate with existing labour market rates

Equal pay for equal work 

1. To recruit persons for a firm

2. To control pay-rolls

3. The elimination of exceptionally low wages

4. To motivate people to perform better

5. To maintain a good public image.

6. Full employment and optimum allocation of all resources

7. The establishment of fair wages standards

OBJECTIVES OF WAGES AND SALARY ADMINISTRATION

Administration of Wages and Salaries

Handled by:-   Personnel department – Or committee who’s major functions are

Approval to management on job evaluation methods

Review of basic wage and salary structure

Help in the formulation of wage policies

Co-ordination of relative departmental

Review of budget estimates

HORROR STORIES IN INDIA 

• Bharat Ophthalmic Glasses

•  National Textile Corporation

• Hindustan Fertilizer Corporation Ltd.Haldia

• Heavy Engineering Corporation

 

Wages Policy in India Payment of Wages Act, 1936

Industrial Dispute Act, 1947

Minimum Wages Act, 1948

Equal remuneration Act, 1976

Payment of Bonus Act, 1965

Wage Board

The planning commission in February, 1973, set up a

committee of wage policy when face with the dilemma as to

what should be a wage policy which could be applied as a

permanent features of our development strategy

The committee appears to be restricted its scope to the

problems of wage policy only in organised private sector of

the economy leaving out the government sector

RECOMMENDATIONS OF WAGE POLICY

THANK YOU