UNIT I WAGES AND SALARY 9

Concept of Wages & Salary, Minimum Wage, Fair Wage and Living Wage and

Salary Fixation-Statutory provisions governing different components of reward

systems- Wage criteria and wage machinery— Wage Components—Salary

Benchmarking, Designing KRA & KPI

• WAGE CRITERIA
• Criteria in Determining Wage

• Minimum wage rates are determined by factors such as poverty threshold,

prevailing wage rates as determined by the Labor Force Survey, and socio-

economic indicators (i.e. inflation, employment figures, Gross Regional

Domestic Product, among others), which insures better workers protection.

• Wage Fixation Machinery

• The minimum wages can be fixed by hour, day, month or such other longer

period. The Act provides for setting up of a tripartite machinery (consisting of

representatives of employers, unions and the government) to advise the

appropriate Government in the fixation and revision of minimum wage rates.

• WAGE COMPONENTS
• Components of wage/salary: DA, incentives, Bonus, Fringe benefits etc.
•• Basic Pay. The concept of basic Pay is contained in the report of the Fair
Wages Committee. ...
•• Dearness Allowance. ...
•• D.A. as a Separate Component. ...
•• Foreign Countries Experience. ...
•• Overtime Payment. ...
•• Annual Bonus. ...
•• Incentive System. ...
•• Fringe Benefits.
• The salary benchmarking process gathers information on pay and

benefits for various organizations. It then goes on to compare the pay

package on offer against those offered for the same role by competitors.

This information is then used to calculate the average salary for specific

roles within an organization.