Components of Employee Remuneration

Financial Non-financial
• Wages and Salaries • Job Context
– Challenging job
• Incentives
– Responsibilities
– Individual Plans
– Recognition
– Group Plans
– Growth prospects
• Fringe Benefits
– Supervision
– PF, Gratuity, Medical Care, Accident Relief,
Health and Group Insurance, etc.
– Working conditions
– Job sharing, etc.
• Perquisites

– Company Car, Club membership,

– Paid holidays, furnished House, Stock
option schemes, etc.
Factors affecting Wage and Salary Administration
 Methods of Wage Payments

• Time Rate Wage System

• Piece Rate Wage System

 Incentives

Incentives are variable rewards granted to employees

according to variations in their performance. The other
name for incentives is ‘payment by results’. But the word
‘incentive’ is most appropriate because of its motivational
content.
 Kinds of Incentives
• Individual and Organizational Incentives
– Individual Incentive System
• Time based system
– Halsey Plan, Rowan Plan, Emerson Plan & Bedeaux Plan

• Production based system

– Tailor’s Differential Piece Rate System, Gantt’s Task & Bonus Plan

– Group Incentive System

• Financial and Non-financial Incentives

• Positive and Negative Incentives
 Pay Structure in India
Jobs are usually classified in to different groups to
reflect the occupational grouping such as the
following:
• Managerial & Professional: Top, Middle & Junior
• Technical/Supervisory

• Administrative & Clerical Staff

• Manual (Workers)
 Components of Pay Structure
• Basic Pay

• Dearness Allowance (DA)

• Other Allowances

• Overtime Pay

• Bonus

• Incentive System

• Fringe Benefits-These include health insurance, life insurance, tuition

assistance, childcare reimbursement, cafeteria subsidies, below-market loans,
employee discounts, employee stock options, and personal use of a company-
owned vehicle.