Directorate of distance education master of business administration

Compensation and Benefits
 
A system of wage and salary administration should be carried 
out in such a manner that employees are attracted, retained, motivated, 
recognized, appreciated, treated fairly and equitably. Some organizations 
choose to pay high salaries and confine themselves with the statutory 
benefits. Some organizations try to offer unique and elaborate schemes 
of benefits while restricting their pay scales to the minimum levels 
permitted by market conditions.  The system should also ensure accurate 
calculation of earnings owed to each of the employees for purposes like 
overtime, performance rewards, incentives payments and allowances, by 
the employer and make sure that pay is distributed in time and with 
proper records. The system should control costs, comply with the statutes 
and be easy to administer. 
Wage Fixation 
 
Wage is fixed based on the value of the amount fixed by wage 
boards, cost of living in the locality, productivity shown and promised 

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by workers, work to the organization, the scarcity of the skill in the 
labor market, the difficulties in the job that determine the number of 
people willing to undertake the job, the affordability of the employer, the 
extent of prosperity in the industry in a given period and based on the 
bargaining power of the workers and their unions.  Wage-Productivity 
relationship is ordinarily taken as a rational basis for wage revision. An 
increase in output per unit of labor is always a ground for workers to 
press their claim for higher wages as their due share of the rise in profits. 
Wages may be of two types such as time rate and piece rate. 
They are fixed with the help of industrial engineering and personnel 
departments and are administered by the payroll departments, according 
to the provisions of the payment of wages law at rates equal to or above 
the minimum wage law. Equal remuneration for equal work without any 
discrimination on grounds of gender has been guaranteed by the law. 
Wage laws insist that wage be paid in cash and not in kind. They also 
state that the maximum permissible wage period would be thirty days. 
They even specify the list of deductions permissible, subject to a ceiling. 
Some of the authorized deductions are recovery of loans, contributions 
towards social security measures like Provident Fund and Employees’ 
insurance, damages recoverable from the employees for loss incurred 
due to the person by the employer, etc.