WAGES AND

SALARY
ADMINISTRATION

Introduction

Development of A Pay System

Review of Job Description
Gather Wage Survey
Information

Conduct Job Evaluation

Pay Structure

Administer Individual Pay

Adjustments
Monitor & Upgrade Pay
System

Factors Affecting Wage / Salary

Levels

Remuneration in comparable industries

Firms ability to pay
Relating to price index
Productivity
Cost of Living
Union Pressures & Strategies
Government Legislations

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.

Difference in Wages, Salary &

Compensation Terms

WAGES

SALARY

Paid to BLUE Collared

Paid to WHITE
collared Employees

On Daily, weekly,
Monthly
Can be measured in
terms of money

Paid at specified
Intervals
Paid to Employees
whose contribution
cannot be measured

COMPENSATION
Comparative Form
All Basic , gross
amount , allowances
+ Benefits

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

Purpose of Wage &

Salary
Attracting talented resources
Retaining and motivating employees
Financial Management
Legal Requirements

Medical
Reimburse
ment

Special
Allowance
s

Basic
Salary
DIRECT
COMPENSAT
ION
House
Rent
Allowance

Conveyan
ce

Bonus

Leave
Travel
Allowance

Overtime
Allowance

Hospitaliz
ation

Leave
Policy
Insurance
INDIRECT
COMPENSAT
ION

Flexible
Timings

Leave
Travel
Holiday
Homes

Retiremen
t Benefits

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
COMPENSATIO
N

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, difficultyor
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 thebare 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

Wage Boards / Pay Commissions

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

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)

Payroll
Software

Manual
System

PAYROLL
PROCESSING

Payroll
Outsourcing

Accountant

Evolution of Strategic
Compensation

Traditional
Compensatio
n System

Change in
Compensation
System

Modern
Compensatio
n Systems

Trainings
This program focuses on building a broad
understanding of compensation, and covers:
HRs 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

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 managers face
today is retention of the man power and the
major cause of it is that they are paid better in
the other organizations.