PAY PACKET

FOR
NON-EXECUTIVES
(FABRICATOR &
FITTER)
 Legal components of
compensation

The payments of wages of act 1936

The minimum wages act 1948

The equal remuneration act 1976

The payment of bonus act 1965

Compensation & its components

FIXED COMPONENT
The fixed component mainly consists
of basic pay, dearness allowance ,
fringe benefits , performance pay,
retirement fund and others.
VARIABLE COMPONENT
The variable component mainly
consists of long term measures ,
share schemes and others.
The variable component mainly
focuses to retain the employees with
the organization.
BONUS
The bonus to the workers is paid according to the
payment of bonus act 1965 which is applicable to
factories and establishments employing 20 or more
employees.

The bonus act states to provide 8.33% or 100 rupees

of their pay at a minimum and to a maximum of 20%.
FRINGE BENEFITS
Free education for workers children.

Free transport.

Insurance

Medical bills

Discounted meals or free meals

COMPENSATION PRACTICE TODAY

Most of the companies today have fixed and variable

components in their salary i.e , fixed company comes
at end of month and variable component depends on
individual performance.

The percentage (fix & variable) vary according to the

years of experience and more the seniority more is the
compensation.
GRADES
Mostly organizations have 3-9 grades
each in workers, staff, supervisors,
and managers.
WORKERS
CLASSIFICATION
Highly skilled
Skilled
Semi skilled
unskilled
FABRICATOR
Fabricates and assembles structural metal products, such as
framework or shells for machinery, ovens, tanks, stacks, and
metal parts for buildings and bridges according to job order,
verbal instructions, and blueprints:

Develops layout and plans sequence of operations, applying

knowledge of trigonometry, stock allowances for thickness,
machine and welding shrinkage, and physical properties of
metal.

Locates and marks bending and cutting lines onto workpiece.

Sets up and operates fabricating machines, such as brakes, rolls,
shears, flame cutters, and drill presses.
FITTER
Fits and assembles structural frameworks and housings from
materials, such as angle iron, I-beams, and plate steel, using
handtools and welding equipment and following blueprint
specifications:

Examines blueprints and materials list to obtain parts specifications.

Lays out parts dimensions on worktable, using square, chalk line,
and soapstone. Tack-welds scrap metal to outline to provide jig for
assembly. Positions parts in jig and files, chisels, and grinds parts, as
indicated, to fit them together.

May heat parts with acetylene torch and bend them in vise, on anvil,
or around stakes mounted in table. Tack-welds fitted parts together or
directs FITTER HELPER (any industry) to tack-weld parts.
 PAY PACKET SYSTEM
For fitter and fabricator we can design pay packet
based on :-

1.Time rate system

2.piece rate system

TIME RATE SYSTEM
ORDINARY LEVEL

It is calculated on the basis (daily, monthly , weekly

etc.)

Earnings=Rate per hour*hours worked

HIGH LEVEL
It is calculated on hourly basis put over time is not
paid.

The formula for calculation of pay is E=RPH*HW

GRADUATED TIME
RATES
PAYMENT:-

The basis is linked with dearness cost of living . The

index of cost of living is varying is considered.

Example: BS=2000 , CLI=100%

Then 2000+100% of 2000 is added=4000.

PIECE RATE SYSTEM
STRAIGHT PIECE RATE
PAYMENT:-

Flat rate is applicable per successfully accepted unit ,

which is predetermined.

Time is not considered.

Earnings = pr*no. of units.

PIECE & TIME COMBINATION
PAYMENT:- A dual rate system ,designed to perfect
inefficient workers , worker is assured of min pay.

If the payment is calculated on the basis of piece rate

& no. of pieces fall below minimum wages then time
is considered.
DIFFERENTIAL PIECE
RATE
PAYMENT:-Minimum wages are assured .However
under this system , instead of combining time rate and
piece rate ,there are dual rates for different efficiency
level.

The purpose is as the level of production increases ,

the cost per unit falls.
PAY PACKET ASSIGNED
While calculating min wages are considered.

The minimum food requirements(2700 calories)

should be determined if provided.

Rent corresponding to min area is specified under

govt industrial house scheme.

Miscellaneous expenditure.
PAY PACKET ASSIGNED
Minimum wage in A.P. per a day is 163 Rs only.

175*(no. of days) =PAY

175*31=5425 Rs per month is fixed pay for a new

entrant.

Variable pay is upto 20 %

 PAY PACKET ASSIGNED
For workers with more than 3 years experience

200*30=6000 fixed pay

Variable pay is upto 25 % + benefits .

For workers with more than 5 years experience

233*30=7000 fixed pay

variable pay is upto 30 %.+ flexible benefits + career

growth
Supplementary payments
Night Shift Allowance (NSA):
NSA payout is calculated for the calendar month.

The allowance amount will be credited in the

following month’s salary.

Eg: If “Employee B” is in Night shift for the

month of June 2009 the allowance will be credited
along with JULY months salary.
Supplementary payments
Extra Mile Incentives:
Extra Mile incentive is calculated for the
calendar month.

The incentive amount will be credited in the

following month’s salary.

Eg: If “Employee C” extends due to

Production requirement in the month of June
2008, he/she is eligible for Extra Mile
Incentives. The incentive amount will be
credited along with JULY months salary.
Supplementary payments
Loss of Pay (LOP):

The LOP cut off’s vary from month to month,

however it will be on or before 20th of every
month.
THANK YOU