THE WAGE AND SALARY DETERMINATION PROCESS

Job analysis

Conduct the salary survey

Group similar jobs into pay grades

Price each pay grade

Fine tune pay rates

Wage administration rules

 JOB ANALYSIS Jobanalysis describes the duties ,responsibilties,working conditions and interrelationsps between the jobs s its is and other jobs with which it is associated
CONDUCT THE SALARY SURVEY Salary suraveys povide many kinds of useful

information about differences in wage levels for particular kinds of occupations Salaray survey can be formal and informal .

 GROUP SIMILAR JOBS INTO PAY GRADES

pay grades is comprised of jobs of equal difficulty or importance as determined by job eveluation.

PRICE EACH PAY GRADE Assigning pay rates to each pay grade is usually

accomplish with a wage curve.

FINE TUNE PAY RATES Developing rate ranges Correcting out of line rates

 WAGE ADMINISTRATION RULES The development of rules of wage

adminsration has to be done. The information about average salaries and ranges in the salaries of group should be knwn to the employee.

METHODS OF WAGE PAYMENTS

TIME WAGE SYSTEM Under this system ,wages are paid according

to the time spent by the workers irrespective of his output of work done . The wages rates are fixed for an hour, a day ,a week or a month. Earnings =T * R FOR Eg. A wage rate of rs15 per day is fixed in factory .a worker worked for 30 days .the wages as per wage system will be (15*30)Rs450

 MERITS SIMPLICITY : this method is very simple. BETTER QUALITY GOODS: Workers will concentrate

on producing better quality goods because they are given wages on time baisis . LESS WASTAGE : The workers will not be in hurry to push through production. DEMERITS NO INCENTIVES FOR EFFICIENCY :This method does not distinguish between efficient and inefficient workers. The payment of wages is related to time and not output. MORE SUPERVISION REQUIRED :workers are not offered incentives for production, so more work from them will be a need for greater supervision.

 PIECE WAGE SYSTEM Under this system of payment,wages are based on output and not on time. No consideration of time is taken in completing a task and fixed rate is paid for each unit produced.

earnings=output*piece rate
different piece rates will be determined for seprate jobs .

 MERIT LESS SUPERVISION REQUIRED: since payments are

on the basis output workers will not waste any time. INCREASE IN PRODUCTION : production goes up when wages are paid according to piece rate system. COST CONTROL: the increase in reduction of overhead costs per unit,as increase in production will reduce expenses per unit. DEMERIT POOR QUALITY OF GOODS: workers will bother more about the number of units produced rather than their quality. Not suitable for beginners : the beginners will not be able to produce more goods because of less experience.

 BALANCE OR DEBT METHOD It is the combination of time and piece wage

systems.