FACTORS DETERMINING PAY RATES & COMPONENTS OF REMUNERATION

PRESENTED TO : Ms. Krishna Solanki PRESENTED BY : Dhara

Pithadia

Meaning of Remuneration
Remuneration in other terms also called as Employee Compensation which an employee receives in return for his or her contribution to the organization.

Objectives Of Employee Remuneration

Attract capable employees to the organization. Motivate them toward superior performance. Retainment of their services over an extended period of time.

Factors Determining Pay rates

External

Internal

Pay rates

Internal Factors
Ability to pay Productivity of labor Business strategy The employee Goodwill of company Job evaluation & performance appraisal Non Financial Benefits Employee benefits

External Factors
Demand Supply Cost of living Bargaining power of unions Labor rates Condition of product market Comparative wage Government policy Society

Other Individual Differences

Workers Capacity and Age Educational qualification Work experience Promotion possibilities Stability of employment Demand for product Hazards involved in work etc.

Classification of Remuneration

Classification of Remuneration

Direct Remuneration
Salary : - Fixed compensation for services, paid to a employee on a regular basis. - Many salaries also include such employee benefits as health and life insurance, savings plans, etc.

Direct Remuneration
Wages : - Payment for labor or services to a worker, especially remuneration on an hourly, daily, or weekly basis or by the piece. - Wages are paid on the basis of Minimum Wages Act, 1948 and Fair wage.

Kinds of Wage Payment

Piece Wage System : - Piece rate represents a uniform payment for each unit processed. Time Wage System : - The time is made basis for determining wages of a person. The wages are paid according to the time spent by workers irrespective of his output of work done

Essential Characteristics of Ideal Wage System

Rational & Equitable Economical Guarantees minimum wages Provision for incentives Stable Simple Workers Share in Excess profits

Incentives
Employees are like a herd of cats. . Impossible to manage!!

But Cats always go to a dish of Milk!

Incentives
It refers to all the plans that provides extra pay for extra performance in addition to regular wage for a job. - Hummel & Nickerson It is an outward stimulus which activates needs of employees. Given to motivate for a particular course of action & to increase the productivity.

Financial Incentives
Salary Wages Bonus

Non-financial Incentives
Job Security Recognition Participation Pride in Job Delegation of Responsibility Quick Promotion Facilities for Development Labor Welfare Amenities

Merits of Incentives
Reduce loaf time Reducing absenteeism & turn over Retaining the existing staff Motivating and increasing morale& loyalty Increase business performance Helps in focusing on achieving targets Helps supervision does not pose any problem

Demerits of Incentives
Fixation of standard is not easy Earnings are reduced at high level of efficiency Effect to health Rough work Effect to inter-personal relation

Fringe Benefits
Fringe benefits are compensations made to an employee beyond the regular benefit of being paid for their work. - Provident Fund - Gratuity - Medical care - Accident relief - Health & insurance - Canteen

Perquisites
Company Car Club Membership Paid Holidays Furnished House Stock option Mutual Fund

Non-financial Remuneration
Challenging job Responsibilities Recognition Growth prospect Supervision Job Sharing Congenial working condition

Thank You