Wage Administration: Meaning ,Objectives and Types | Management

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MEANING
ILO defined the term wage as – “the remuneration paid by the employer for the services of hourly, daily, weekly and fortnightly employees”. It also means the remuneration paid to production and maintenance of blue collar employees.

Wage administration is a collection of practices and procedures used for planning and distributing company or establishment -wide compensation programs for employees. These practices include employees at all levels and are usually handled by the accounting department of a company.
According to Steven Kerr, “Whether dealing with monkeys, rats, or human beings, it is hardly controversial to state that most organisms seek information concerning what activities are rewarded, and then seek to do those things, often to the virtual exclusion of activities not rewarded.
OBJECTIVES
A sound wage and salary administration tries to achieve these objectives:

1. For Workers:
Workers are paid according to requirements of their jobs, i.e., highly skilled jobs are paid more compensation them low skilled jobs. This eliminates the inequalities.

 Job sequences and lines of promotion are also established wherever they are applicable.

Employees’ morale and motivation also increases because a wage programme can be explained accordingly and is based upon facts.

 The chances of favoritism (which creep in when wage rates are assigned) are greatly minimized as there is a proper technique followed for assigning wages for different class of workers
1. To Employers:

In dealing with a trade union, they can explain the basis of their wage programme because it is based upon a systematic analysis of the roles and responsibilities in a job.

A wage and salary administration reduces the likelihood of friction and grievances over wage inequities.

It enhances an employee’s morale and motivation because wages are paid by following a similar technique depending on the category of the worker


TYPES
Minimum Wage: It is that wage which is sufficient enough to meet the basic needs of a worker and his family. This has to be paid to him irrespective of the capacity of the organization to pay.

The committee on fair wage defines minimum wage as wage provided not only for bare sustenance of life but also for the preservation of efficiency of workers.
Fair Wage: According to the committee on fair wage, “ fair wage is the wage which is above the minimum wage, but below the living wage”. It is fixed between the minimum wage and capacity to pay by the employer.

Living Wage: It provides certain amenities considered essential for the well being of the worker. According to the committee on Fair Wages,” the living wage should enable the male earner to provide for himself and his family not merely the bare essentials of food, clothing and shelter but also a measure of frugal comfort including education for children, protection against ill health, requirements of essential social needs etc”.


Time to Practice
Which among the following is the wage sufficient to meet the basic needs?

Living wage
Fair wage
Minimum wage
None of the above
Which among the Following cannot be a part of wages?

Incentive
Factory rent
Fringe benefits
None of the above
CHAPTER
00:00 Wage Administration Meaning , Objectives And Types
00:12 Meaning
02:32 Objectives
05:24 Types
09:08 Lets Practice