A Study of Remuneration System in

G. SHANTILAL Transport Ltd. Co.

Submitted by
Yogita Sawant

A Report submitted to
Yadavrao Tasgaonkar Institute Of Engineering And
Technology
in partial fulfillment of the requirements for the award of
MASTERS IN MANAGEMENT STUDIES
(University Of Mumbai)
2009-11

Under the guidance of:

Prof.Sonal Kadam.

Yadavrao Tasgaonkar Institute Of Engineering

And Technology
Bhivpuri Road, Karjat.
(Affiliated to Mumbai University)
Academic Year 2009-2010.

1
Yadavrao Tasgaonkar Institute Of Engineering And
Technology
Bhivpuri Road, Karjat.
(Affiliated to Mumbai University)
Academic Year 2009-2011.

CERTIFICATE

This is to certify that project titled A Study of Remuneration System in

G. SHANTILAL Transport Ltd. Co.
is based on the original study conducted by :

Miss.Yogita D.Sawant.

Under my guidance and this had not formed a basis for the award of any
other degree of this institute/university.

Place: Mumbai

Date :

2
 Prof.Sonal Kadam.

CERTIFICATE
___________________________________________

Date:

This is to certify that the following :

Miss.Yogita D. Sawant

Have successfully completed a study on Remuneration System in

Our company.

And have submitted the project report on the same

The study conducted was satisfactory. We wish them

all the best.

Signature of the officer

3
 PREFACE

It will help us understand the meaning, find out

how the remunerative system works and study
types of remunerative system along with their pros
and cons. Analyse a company’s remunerative
system , discuss its advantages and disadvantages
Obtaining Conceptual Clarity from relevant works
and reference material. And study of the system of
remuneration in a company. This studywill help us
understand the function of a remunerative system
of company along with a basic idea of other types
or systems of remuneration.

4
 ACKNOWLEDGEMENT

The members of this group would like to thank the following:

1. Prof.Sonal Kadam

2. The staff at YTIET library

3. Mr Raj G. Vijan

Without their valuable assistance such a study would

not be possible. We acknowledge their efforts in providing
timely advice and guiding us in whatever possible way. We’d
like to take this opportunity to express our heartfelt gratitude.

5
 Executive Summary

A study of remunerative system in a company requires a

conceptual clarity about various remunerative ,incentives and
labour related cost aspects.

Method of calculation of each such method of remuneration along

with its advantages and disadvantages have been looked into.

To get a clear picture the remunerative system at

G. SHANTILAL Transport Ltd. Co.
has been studied.

A questionnaire method was followed to obtain information from

Mr. Raj G. Vijan of the above mentioned company.

6
 INDEX

No. Title of Chapter Page no.

1 Acknowledgement 5

2 Executive summary 6

3 Remuneration 8

4 Time Rate System 8-10

5 Piece Rate System 10-12

6 Combined Time and Piece Rate System 12

7 Bonus Scheme for Employee 13-18

8 Incentive Scheme for Employee 19-22

9 Labour Cost and Its Type 22-25

10 Questionnaire 26-27

11 Bibliography 28

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Remuneration
Is pay or salary, typically monetory payment for services rendered, as in an
employment.
--------- Bannerjee

Labour is one of the four factors of production. Both direct and indirect
labour employed in an organisation will have to be paid remuneration for
the services rendered by them. The terms of employment generally specify
the rate or scale of pay and other allowances payable to workers. The
various methods of remuneration may be basically grouped under two main
headings viz. :

1). Time Basis – by hour, day or week

2). Piece Basis – straight/differential

Besides all these, there are monetary and non-monetary incentive schemes.

For convenience, the various methods of remuneration may be broken down

into the various heads:

A. TIME RATE :

The general characteristic of all the time rate systems is that the
workers do not get nothing beyond their time wages, that is Time X
Rate. It is the employer who may gain arising out extra efficiency of
his workers or lose due to their inefficiency. Discussed below are the
features of a time rate system:

a). Time rate at ordinary levels :

Under this method, payment is made on the basis of time which

may be hour, day, week or a month. The rate of pay should not be less
than that prescribed by the tribunal, wage board or by the Government
through Payment of Minimum Wages Act. When payment is made on
the basis of hours worked by the employees, wages are to be
calculated as follows:

8
 Wages = Hours worked X Rate per hour

For overtime work an extra premium will be usually paid.

b). Time Rate at high wage levels :

This is similar to the previous system except the fact that the day
rates are made high enough so that in return a much higher standard of
performance from the workers are ensured.

1. The hourly rate is higher than normal wage for the industry.
2. The standards set must be achievable by an efficient worker.
3. Overtime work is not permitted.

c). Graduated Time Rates :

Under this method, wages are paid at time rates which vary with
changes in local cost of living.

In India, the basic wage rates normally remain fixed. Sometimes

wage rates are adjusted with the average selling price of products.

Application of T.R.S:

1. Where the work demands a high degree of skill and quantity of

production is less important e.g : tool or watch- making.

2. Where it is difficult to measure the work done by workers. This

is done in case of indirect workers such as supervisors,
cleaners, watchmen etc.

Advantages:

It is simple to understand and operate.

9
The workers are more or less certain about the amount they will earn, so
long as they remain in employment. This leads to contented body of workers
which in turn improves employer-employee relationship.

Disadvantages:

Since the workers are certain about their wages, they may not care to
improve their efficiency to increase production. They tend to adopt a “go-
slow” tactic. This leads to higher cost of production which in turn leads to
higher labor cost and more overheads.

Efficient workers efforts are not rewarded. This will lead to frustration of
efficient workers and thus more labour turn-over.

B). PIECE RATE: Payments by results.

Systems based on work are otherwise known as piece rate

systems. According to these systems, the extent or volume of work done
forms the basis for determination of the wages payable to the workers. It is
paid at a certain rate per unit produced or job performed or operation
completed irrespective of the time taken by the workers. Generally, workers
stand to gain or lose as a result of a standard efficiency which they attain.
The slogan might be “produce more to earn more”.

Advantages:

1. Workers are paid only for the work they have done. Thus, the
employer does not stand to lose anything because of the variation in
the efficiency of workers.
2. In their bid to earn more, workers will try to adopt better and more
effiecient methods in order to increase production. As a result, the
general dexterity and skill of the workers are enhanced.
Disadvantages:

10
 1. The workers will always try to produce more to earn more. Thus
the quality of the product may suffer.
2. Over-strain on the part of workers will cause frequent absentecism
and bad health.

a). Straight Piece Rate :

Under this method payment is made on the basis of a fixed amount
per unit or per fixed number of units produced without regard to time taken.
Thus,
Earnings = Number of units X Rate per unit
The fixation of piece rate generally depends upon:
Comparable time rate for the same class of workers, and
Expected output in a given time.

b). Piece Rates with graduated time rates:

Under this system, workers are paid minimum wages on the basis
of time rates. A piece rate system with graduated time rate may include any
one of the following :
If earning on the basis of piece rate is less than the guaranteed minimum
wages, the workers will be paid on the basis of time rate. On the other hand,
if earning according to piece rate is more, the workers will get more.
Guaranteed wages according to time rate plus a piece rate payment for units
above a required minimum.
Piece rate with a fixed dearness allowance or cost of living bonus.

c). Differential Piece Rates:

Under this system, there is more than one piece rate to reward
efficient workers and to encourage the less efficient workers or a trainee to
improve. In other words, earnings vary at different stages in the range of
output. This scheme was first introduced in the U.S.A by F.W.Taylor, the
father of scientific management, and was subsequently modified by Merrick.
These are further discussed below :

 Taylor Differential Piece Rate System:

The original Taylor Differential system paid piece rates determined by
time and motion study. Day wages were not guaranteed. There were two
rates : below the standard, a very low piece rate and above the standard, a
high piece rate was fixed. Thus, the system was designed to-
 Discourage below average workers by providing no guaranteed
wages and setting low piece rate for low level production.
11
  Reward the efficient workers by setting a high piece rate for
high level of production.

 Merrick Differential System:

Merrick afterwards modified the Taylor’s Differential Piece Rate. Under
this plan, the punitive lower rate is not imposed for performance below
standard. On the other hand, performance above a certain level is rewarded
by more than one higher differential rates. The rates which are applied are :

Efficiency Rate Applicable

Up to 83.33% Normal Rate
Above 83.33% but upto 100% 10% above normal
Above 100% 30% above normal

C) Combination of Time and Piece Rates:

1. Emerson’s Efficiency Plan :

The main features of the plan are :
Day wages are guaranteed.
A standard time is set for each job or operation or a volume of output is
taken as standard.
Below 66.66% efficiency, the worker is paid his hourly rate.
From 66.66% up to 100% efficiency, payments are made on the basis of
step bonus rates.
Above 100% efficiency, an additional bonus of 1% of the hourly rate is
paid for each 1% increase in efficiency.

Efficiency for this purpose is calculated as follows:

1. On time basis:
% Efficiency = Standard time allowed X 100
Time Taken

2. On Production basis:
% Efficiency = Actual Production X 100
Standard Production

Emmerson’s efficiency plan is suitable to :

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 a. Encourages slow workers to better their performance.
b. Facilitates and easy transfer from time wages to payment by result
scheme.
But this scheme is not meant for skilled and competent workers.

2). Gantt Task and Bonus Scheme :

This system combines time rates, high piece rates and bonus. Its main
features are:

a. Daily wages are guaranteed.

b. Standards are set and bonuses paid if work is completed within
the standard time allowed.
c. Performance below standard is paid on the basis of time
rates(guaranteed).
d. Performance above standard (when time taken is less than
standard time allowed) is paid at high piece rate. The foreman
may also receive bonus if the workers under him qualify for it.

The time and bonus rates are fixed for each job and when a job is
completed the worker goes on with the next. The pay thus earned consists of
1. Daily wages plus
2. The sum of all bonuses ( Quantity X H.P.R)

Thus this plan provides an incentive for efficient worker to reach a higher
level of performance and also protects and encourages the less efficient
workers by ensuring the payment of their minimum wages incase their
performance is below their standard level. The Gantt Task scheme may be
introduced in:

1. Heavy Engineering and structural workshop

2. Machine tool manufacturing industry
3. Contract costing where work is to be completed within a
specified date.

3). Bedaux Scheme or ‘Points’ Scheme:

This system requires a very accurate time study and work study.
Under this scheme, each minute of standard time is called the bedaux point
“B” . Thus, each operation to be performed can be expressed as being many

13
B’s and payment is made on the basis of the number of B’s standing to
credit a worker.
Time wages are paid until 100% efficiency rate is reached. Under the
original plan, the worker received only 75% of the bonus while the 25% was
received by supervisors. But, according to modified scheme the workers
nowadays receive 100% of the bonus.

The advantages of this scheme are :

1. A competitive element is reduced and this acts as an additional spur to
production.
2. It is a means of strong managerial control and accordingly recieve
managerial support.

The limitations of this scheme are, high cost due to additional clerical work
and inspection, lack of attempt to control material costs, etc.

Premium Bonus Schemes:

a. The Halsey scheme:

The main features of this scheme are :
• Standard time is fixed for each job or operation.
• Time rate is guaranteed and the worker receives guaranteed
wages irrespective of whether he completes the work within the
time followed or takes more time to do it.
• If the job is completed in less than standard time, a worker is
paid a bonus of 50% of the time saved at time rate in addition to
his normal time wages.
Thus earnings under this scheme will be :
Guaranteed wages + Bonus (50%Of time saved), if
any = (Hours worked x Hourly Rate) + ½(Time allowed – Time
taken) x Hourly Rate.

The advantages and disadvantages of this scheme are mentioned below:

Advantages:
• Simple to understand and operate.
• The more efficient workers will be able to increase hourly rate of
earnings more rapidly with the increase in hours saved.

14
 • Inefficient workers are not penalized as they get day wages for the
hours worked.
• The employer will share 50% of the bonus due to time saved by the
workers. This may induce him to introduce better equipments and
methods.

Disadvantages:
• The earning per unit will come down with the increase in efficiency.
The workers may feel that it is the employer who gains more by their
efficiency. The workers may, therefore, object to share their bonus
with the employer.
• The incentive, as compared with other high incentive schemes, is as
strong enough to introduce the more efficient workers to work harder.

b. The Halsey-Weir Scheme:

Under this scheme, a worker will get a bonus
of time saved as against 50% in case of previous scheme. In other
respects, both Halsey and Halsey-Weir schemes are similar.

c. The Rowan scheme:

This scheme was introduced by David Rowan
in Glasgow in 1901. Before, the bonus is paid on the basis of time saved.
But unlike a fair percentage in the case of Halsey scheme, it takes into
account a proportion as follows:

Time Saved
----------------
Time allowed
The bonus may be calculated in two ways :
(i) adding it to the normal time wages, or
(ii) adjusting the hourly rate.

But whatever method may be followed, the final result will be the same.

Formulae:
(i) Time wages + (Time wages x bonus ratio)
(ii) Time taken x (hourly rate + hourly rate x bonus ratio)

Bonus Ratio = Time saved

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 ----------------
Time allowed
Time saved = Time allowed – Time taken.

The advantages and disadvantages of this method are mentioned below

Advantages
• The workers share the benefit with the employer.
• It is suitable for learners and beginners.
• It provides a safeguard against loose fixation of standard. For eg: even
if the rate setting department being newly established in a factory sets
erroneously the time allowed, the workers cannot take undue
advantage as only a proportion of the savings is passed on to them.

Disadvantages:
• Efficiency beyond certain point is not rewarded.
• A beginner and a more efficient worker may get the same amount of
bonus. This will adversely affect the morale of the efficient workers.
• It is more complicate than the Halsey system.

(d) Barth scheme:

Under this plan wages are not guaranteed. Wages payable are paid at
by multiplying the hourly rate by square root of the product of the time
allowed and time taken.

Wages = Hourly rate (Time taken x Time allowed)^1/2

It appears that when efficiency increases the rate of increase in the total
earnings falls. Another disadvantage of this scheme is that because
complication involved in calculating wages an average worker cannot self
determine his own wages.

(e) Accelerating Premium Bonus:

Under this scheme, bonus increases at s faster rate. For eg: a worker may
get 175% of basic wages for 175% efficiency. This scheme is suitable to
machine operators in that owing to the high incentives the workers may
rush through work to earn more disregarding quality production.

16
 There is no simple formula for this scheme. Therefore, each firm has
devised its own formula.
Thus,
Percentage efficiency 100 110 130
150
x 1 1.1 1.3
1.5
x^2 1 1.21 1.69

2.25

y=0.8x^2 0.8 0.97 1.35

1.80

Multiplying the values of x and y by 100, one gets percentage earning

against percentage efficiency.

E. Group Bonus schemes

In all the schemes discussed so far the bonus
payable has been ascertained on an individual basis. But bonus scheme for
a group of workmen working together may also be introduced where:
• It is thought necessary to create a collective interest in the work.
• It is difficult to measure the output of individual workers.
• The output depends upon the combined effort of a team.

Under these circumstances a group bonus based on the results of team effort
may be introduced.

Advantages of group bonus scheme:

• It creates a team spirit
• Harmonious working in a group leads to increased output and hence
lower cost of production.
• It eliminates excessive waste of time, materials etc.

Disadvantages :
• The effort of more efficient workers are not properly rewarded. In
other way, the share of inefficient workers may be the same as that
received by more efficient members of the group.

17
 • It is difficult to fix the amount of incentive and its principle in
distribution among the members.

Principle group bonus schemes

Sometimes the idea of group bonus may be extended to the wide factory.
The various schemes which may be introduced under this purpose may
include the following:
(a) Priestman’s Production Bonus
(b) Rucker, or “Share of Production” Plan
(c) Scanlon Plan
(d) Towne Gain Sharing Plan

(a) Priestman’s Production Bonus

A standard is fixed under this plan in terms of units or points in actual
output, measured similarly exceeds standard the workers will receive a
bonus in proportion to the increase. Therefore this system can operate in a
factory where there is mass production of a standard product with little or no
bottleneck.

(b) Rucker or “Share of Production” Plan

According to this plan employees receive a constant proportion of
the “value added” or “added value”. The term value added is defined as
follows:
“The increase in realizable value resulting from an alteration in
factory location or availability of a product or service, excluding the cost of
production chased materials or services”.

VA = Sales less cost of bought in materials and services.

Or
VA = Profit before tax + conversion costs + other costs
Where conversion costs include manufacturing labor and
manufacturing overheads and other costs include administration, selling and
distribution costs (including interest, depreciation etc.)

In introducing an incentive scheme based on value-added a ratio of labor

cost to value added is set based on normal relationships. Any introduction in
the ratio entitles appropriate bonus payment. According to Rucker, labor will
receive a constant proportion of the “added value”.

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(c) Scanlon Plan
This plan is similar to the Rucker plan except that it adopts the
route between wages and sales value of production.

(d)Towne Gain Sharing Plan

According to this plan 50% of “gain” (savings in cost) is paid to
individual workers pro rata in addition to their basic wages. Here bonus
is calculated on the basis of reduction in labor cost vis-à-vis the standard
set. A supervisory staff may also receive a share of bonus.

Incentive Schemes for Indirect Workers:

One of the main conditions of the incentive systems is that actual input
and/or time taken in relation to standard set is determinable. In case of
direct workers the measurement of performance does not involve any
problem. But in case of indirect workers whose performance cannot be
directly measured (e.g. supervisors, machine maintenance staff, internal
transport, packing, dispensing canteen, etc.), introduction of the incentive
scheme may appear to be difficult. Still it is essential to provide
incentives to the indirect workers for the following reasons:

(1) If direct workers are rewarded for their efficiency, there is no reason
why indirect workers should not be brought under some incentive
schemes.

(2) When only direct workers enjoy incentive schemes, indirect workers
who work side by side with them are dissatisfied with such
discrimination. This therefore affect the morale and the efficiency of
the indirect workers.

(3) When the work of the direct workers is related to or dependent on that
of indirect workers, any deficiency on the part of the latter due to lack
of incentive schemes will also affect adversely the efficiency of direct
workers.

For the purpose of incentive schemes, indirect workers may be grouped as

under:

(a) Indirect workers working with direct workers e.g. supervisors,

inspectors, checkers, transport workers, etc. In this case, bonus may

19
 be based on the output of direct workers whom the indirect workers
serve.

(b)Indirect workers rendering general services e.g. sweepers, canteen

workers, dispensing staff, maintenance staff, etc. Bonus to be paid
will be determined on a wider basis e.g. output of a department or of
the whole factory, a percentage of bonus payable to the direct
workers, job evaluation, merit rating etc.

In designing incentive scheme for the indirect workers, the following points
must be considered :

(1) It should be guaranteed for a specific period e.g weekly, monthly,

half-yearly,
Yearly, etc.

(2) It should be so organized as to achieve all round efficiency.

(3) It should be paid at regular intervals.

(4) Rewards should be related to results.

A few examples of incentive schemes to indirect workers are mentioned

below:

(i) Bonus to foremen and supervisors.

(ii) Bonus to repairs and maintenance staff
(iii) Bonus to stores staff

F. Other Incentive Schemes:

(a) Indirect Monetary Incentives

Employees frequently receive additional remuneration based on the
prosperity of the concern. The principal schemes under this head
include :

(i) Profit Sharing

(ii) Co-partnership

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 These schemes are becoming more and more widespread and are
gaining importance.

(i)Profit Sharing
Under this scheme, the employees are entitled to a share of profits at
an agreed percentage in addition to the wages. Sometimes, a minimum
period of service is a condition of participation in the scheme. This type
of scheme recognizes the principle that every worker contributes
something towards profits and as such he should be paid percentage
thereof.

In India, profit sharing schemes take the form of an annual or other

medical bonus. In other words, the “available surplus” is generally
distributed amongst three parties:

1. Shareholders
2. Industry
3. Employees

There were considerable disputes as regards the quantum of bonus to be

paid to the employees. The Govt. of India set up a Bonus Commission
and on the basis of its report the Payment of Bonus Act had been
adopted. Under this act, the minimum and maximum bonus payable is
respectively 8 1/3% and 20% salary.

(ii) Co-partnership:
The employees are allowed to have a share of the profit. The shares held
by the employees may or may not carry voting rights. When co-partnership
increases in conjunction with profit sharing, the employees are allowed to
share their bonus with the company as shares or as a loan carrying lucrative
interest.

Advantages:
1. Schemes like Profit Sharing, Co-partnership etc will recognize
the principle that every employee directly or indirectly
contributes something towards profit.

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 2. More profits may lead to more bonus to the employees. This
induces them to increase their efficiency to work hard and
hence there will be increased productivity.
3. The employers feel a greater “sense of belonging” to the
enterprise as this leads to careful handling of costly materials
and plants and machinery.

Disadvantages:
1. Employees are not paid bonus on their output and hence more
efficient employees are not properly rewarded.
2. the employees do not have any access to the accounts of the enterprise
and therefore they cannot ascertain the proprietary of the amount send
to them as bonus. This may and very often lead to disputes which may
turn to strike, lockout, etc.

(b)Non-monetary Incentives:
These type of incentives relate more to the conditions of the employee
rather than to job functions. The objectives behind these schemes are
two-fold:

1. Making the conditions of employment more and more

attractive and
2. Promoting better health amongst the employees so as to
build happy and contented staff.

Non-monetary incentives may be entirely free or subsidized by

company. They are wide in number and may include :

1. Canteen-free or subsidized
2. health and safety
3. Recreational facilities
4. Housing facilities
5. Educational and training
6. Pension, Provident Fund Schemes, etc.

Labour Cost

Labour Cost includes all the payments made by the employer to the
workforce for performing production activity and the cost to the employer of
22
all the benefits granted to the workforce for the same. Labour cost thus
includes:-
1. Monetary Benefits to the workers include the following:-

a. Basic wage

b. Dearness Allowance

c. Travelling allowances

d. Employer’s contribution to PF

e. Employers contribution to Employees’ Insurance Schemes

f. Bonus

g. Pension etc.

2. Perquisites, Fringe Benefits or Labour Related Costs which

include cost to the employer the flowing facilities to the
employees:-

a. Canteen Subsidy

b. Subsidised Ration

c. Transport Facility

d. Free Accommodation

e. Medical Services

f. Paid Holidays etc.

Direct and Indirect Labour Cost

The cost of labour conveniently identified with the production of a product
or performance of a job, contract, process or service is a Direct Labour Cost.
Direct Labour Cost is wholly and exclusively incurred for a cost unit.
Charge on account of Direct Labour Cost is precise, e.g. wages paid to
carpenter producing a table or to a tailor stitching a shirt.

23
Wages paid to the worker engaged in production, not of a particular product,
process or job, but of two or more products in common or of production in
general, are Indirect Wages and the workers so working is called Indirect
Labour. Indirect Labour is not exclusively for a particular product, job,
process etc. Indirect labour cost needs to be distributed to various products
on some reasonable basis. Examples of Indirect Labour are: - a foreman
supervising a number of machines producing different products, factory
cleaner, factory watchman etc.
It may sound confusing that the payments made to the same worker may be
a direct wage in one situation and an indirect wage in another situation. In
case a worker is exclusively working on a product, the wages paid to him
then would be Direct Labour Cost; and if he is simultaneously working on a
number of products, then his wage is Indirect labour cost.
The payment for direct labour is a part of Prime Cost, whereas the indirect
labour is an overhead.

Importance of controlling the Labour Costs:-

1. Labour Cost is a significant portion of the total cost.

2. There is larger scope for economy in labour costs than in other cost.

3. Any mishandling of labours leads to increase in labour cost, in

addition to creating other problems.

4. It is the most difficult to control, among all other costs.

Difficulties on Controlling the Labour Cost:-

1. Labour cost related to human beings which is the most complex
creation of the Almighty. It is affected by inner state of affairs as well
as outer environment.

2. Labour cost is affected by a large number of variables – qualification,

placements, tools, weather, motivation etc.

3. Labour is perishable commodity. Labour hours lost is lost forever.

4. Labour cost may go up due to the following reasons:-

a. Poor selection

b. Excess workforce

24
 c. Inadequate workforce

d. Wrong time recording

e. Demotivation

f. Poor supervision

g. Inadequate facilities

h. Poor human relations.

Ingredients of Labour Cost Control

1. Efficient system of determining labour requirements, recruitment and
selection, training and placements.

2. Efficient system of time keeping and payroll.

3. Efficient systems of labour remunerations.

4. Control on labour turnover.

5. Control on over time and idle time.

6. Healthy work environment.

Organizations for Control of Labour Cost

In a large organization mainly the following departments deal with Labour
cost, in addition to the production department where the labour is actually
working:-
1. Personnel Department

2. Engineering Department

3. Time-Keeping Department

4. Payroll Department

25
 5. Cost Account Department

Questionnaire: Study of Remuneration System in

G. SHANTILAL Transport Ltd. Co.
(Accounts)

Q. Nature of Unit- transport n partnership firm

A. (Factory, shop floor, construction site)

Q. Nature of activity?
A. Transportation of goods

Q. How are the people selected in the organisations?

A. Placement agencies and Advertisements

Q. How many total people employed in the company? Their classification?

A. Section wise / Department wise 168 total,
Post wise - 21 managers,
Function wise - 30 supervisors,
Area wise / Space wise - 107 clerical, Shift wise

Q. What is the method of remuneration?

A. Salaries, Incentives---- a) Bonus - basic

b) Allowances - dearness allowance, house rent allowance,

ex gratia incentive

Q. How is each component calculated?

A. Monthly - salary and allowances, annually - ex grati and bonus incentive

Q. How is your remuneration disbursal documented?

A. Muster Rolls, Registers - salary register

Q. When is the remuneration disbursal scheduled?

A. A fixed date which is the 5th day of following month

Q. Are you governed by any of the following Acts?

A. Minimum Wages - as per motor vehicles act and payment of bonus as same,
Payment of Bonus, Payment of Gratutity

Q. Who decides the wage policy? Do you have a registered trade union?

26
A. Registered general trade union

Q. Is there any other wage policy followed?

A. Contractual agreement with union

Q. What are the factors taken into consideration?

A. efficiency bar

Q. Who decides the salary policy?

A. Trade union where the workers are part of and If not associated with union then
management decided.

Q. Do you have a HR policy ?

A. The owners have the HR policy

Q. What factors are taken into consideration?

A. efficiency seniority and designation

Q. When do you declare bonus?

A. Annually

Q. Do you have a profit sharing scheme?

A. No

Q. What are the security measures or internal checks that you take to ensure that your
remuneration disbursal happens smoothly?
A. Ensure payment of salary on time.

Q. Do you retain receipts or counterfoils or any other piece of document or do you take
signatures or thumb impressions as a proof that payment has been made ?
A. Yes. Signature on salary sheet is taken as proof

Q. What is the mode of payment of remuneration?

A. Cash - majority by cash
Cheque - gratuity and final settlement by Cheque

Q. Do you feel this remunerative system works for your firm/factory/unit?

A. Yes. Works well and has been working for u since the last 40 years.

Q. What according to you are the components of a good remunerative system?

A. Payment on time and designated date as per agreement. as per contractual agreement
with the union.

Q. Do you feel that your system of remuneration needs some changes?

A. Room for improvement as efficiency is not adequately reflected in the system

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Q. What are the highlights or strengths of your remunerative systems ?
A. Timely payment and adherence to contractual agreement with union.

Bibliographies
• Cost Accounting by Bannerjee
• Cost Accounting by L. Mittal
• Cost Accounting by S. N. Maheshwari

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