Wage & Salary Administration
• A wage is remuneration paid by an employer
to an employee.
• It may be a calculated as a fixed task based
amount, or at an hourly rate, or based on an
easily measured quantity of work done.
• It is contrasted with salaried work, which is
based on a fixed time period.
• A salary is a form of remuneration paid
periodically by an employer to an employee
• What a "Salary" looks like:
$45,000 per year
What a "Wage" looks like:
$16.50 per hour
So basically, a Salary tells you how much you'll
earn either in a month or a year.
While a wage tells you how much you'll earn
in an hour (and a Day, too? Not sure on this).
Wage Structure
Wage Differentials
Wage Standardization
Wage Policy
Wage Incentives
Bonus and Profit Sharing
Wage Structure
• Wage structure is generally the levels or
hierarchy of job and pay ranges. It is
the interrelationship of the levels of pay for
different types of employees.
pay band 1 – 5500 – 22000 (2500)
pay band 2 – 9300 – 31000 (4600)
pay pand 3 – 15600 – 39000 (6000)
pay band 4 – 32000 – 72000 (10000)
Wage Differentials
• the difference in wages between workers with
different skills in the same industry or
between those with comparable skills in
different industries or localities
Wage Standardization
• Standard salary rates can be determined for a
job by collecting salaries from reputable salary
• Match your job to the salary survey jobs using
your job's description and the survey's job
Wage Policy
• The term ‘wage policy’ refers to all systematic
efforts of the Government in relation to a
national wage and salary system, The policy
lays down guidelines concerning the level and
structure of wages.
The guiding principles of national wage
policy are as follows:
• Sub serves the national objective of economic growth
with social justice.
• Promote employment, productivity and capital
• Remove sectorial imbalances and wage differentials.
• Promote price stability.
• Avoid automatic double linkages.
• Ensure rising real wages consistent with the capacity of
the industry and the national economy.
• Have relationship with national income, state of the
industry and prevailing wage rates
Pay structure in India generally
consists of the following components
• Basic wage/salary.
• Dearness allowance (D.A.) and other
• Bonus and other incentives.
• Fringe benefits or perquisites.
Wage Incentives
• Incentive pay, also known as "pay for
performance" is generally given for specific
performance results rather than simply for
time worked.
• Casual Incentives - a dinner for two at a local
restaurant, or a pair of tickets to the rodeo
• Structured Incentives - Benefits to employees
include higher pay and satisfaction.
Bonus and Profit Sharing
• Bonus is a deferred wage aimed at bridging the
gap between actual wage and the need based
• Bonus is a share of the workers in the prosperity
of an enterprise.
• Bonus may also be regarded as an incentive to
higher productivity.
• According to the Bonus Commission (1961),
bonus is “sharing by the workers in the prosperity
of the concern in which they are employed.
Profit sharing
• Profit sharing, when used as a special term,
refers to various incentive plans introduced by
businesses that provide direct or indirect
payments to employees that depend on
company's profitability in addition to
employees' regular salary and bonuses.