wages system

hrm

1. WELCOME
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2. INSTITUTE OF BUSINESS
MANAGEMENT
C.S.J.M. UNIVERSITY,
KANPUR

SUBMITED TO:-
MR. VIVEK SINGh
SAChAN

SUBMITED BY:-
MUKUL PRATAP SINGH
MONIKA RATHORE
ANKITA TRIPATHI
AMIT CHAURASIA
HIMANK TRIVEDI
SHIVANGI JAISWAL
Group-5

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3. Minimum
wage
Fair wage
Living
wage
CONCEPT OF WAGES
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4. MINIMUM WAGES
Minimum wage providing for
sustenance of life plus for preservation
of the efficiency of worker.
Two types of M.W.
1- Informal minimum wages
2- Setting minimum wage

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5. INFORMAL MINIMUM
WAGES
Customs and extra-legal pressures from
governments or labor unions can
produce a de facto minimum wage. So
can international public opinion, by
pressuring multinational companies to
pay Third World workers wages usually
found in more industrialized countries
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6. SETTING MINIMUM WAGE
Among the indicators that might
be used to establish an initial
minimum wage rate are ones
that minimize the loss of jobs
while preserving international
competitiveness
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7. FAIR WAGE
Equal to the rate prevailing in the
same trade and in the neighborhood
, or equal to the Predominant
rate for similar work throughout the
country.
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8. LIVING WAGE
Higher than fair wage.
Provides for base essential
plus frugal comforts.
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9. WAGE POLICY IN INdIA
Wages policy refers to all
systematic efforts of the
government in relation to national
wage and salary system.
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10.  To obtain for the worker a just share of the
fruits of economic development.
 To set minimum wages for worker’s
whose bargaining position is weak
 To abolish malpractices and abuses in
wages and salary payments.

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11. METhOdS
OF
WAGES
PAYMENT
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12. Time rate/wage system
Wages = No. of days worked Rate per day
OR
Wages = No. of hours worked Rate per day
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13. Piece rate/wage system
Wages = N R
N Number of units produces
R Rate per unit
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14. For example- If a worker
produces 20 units per day when
the piece rate is Rs 30 Per unit,
the total wages per day will be
20*30 = Rs 600
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15. SALARY
A salary is a form of periodic payment from
an employer to an employee, which may be
specified in an employment contract. It is
contrasted with piece wages, where each
job, hour or other unit is paid separately,
rather than on a periodic basis
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16. First paid salary
While there is no first pay stub for the
first work-for-pay exchange, the first
salaried work would have required a
society advanced enough to have
a barter system which allowed for the
even exchange of goods or services
between tradesmen
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17. salarium
Similarly, the Latin
word salarium linked
employment, salt, and
soldiers, but the exact link is
not very clear.
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18. allowances
An allowance is an amount of money given or
allotted usually at regular intervals for a specific
purpose. In the context of children, parents may
provide an allowance: pocket money to their child
for their miscellaneous personal spending. In the
construction industry it may be an amount
allocated to a specific item of work as part of an
overall contract.
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19. types oF allowance
Construction contracting
Allowances for children

Allowances for adults
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20. construction contracting
In construction, an allowance is an amount
specified and included in the
construction contract (or specifications) for
a certain item of work (e.g., appliances,
lighting, etc.) whose details are not yet
determined at the time of contracting.
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21. allowances For children
Parents often give their children an
allowance (British English: pocket
money) for their miscellaneous
personal spending, and also to teach
them money management at an early
age.
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22. allowances For adults
In Japan three quarters of men get a
monthly allowance from their wives.
Since 1979 Shinsei Bank has been
researching the amount of spending
money given to husbands by their
wives. In 2011 it is 39,600 Yen or about
$US 500
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23. incentives
An incentive is something that
motivates an individual to perform
an action. The study of incentive
structures is central to the study of
all economic activities
There are (1) Individual incentive schemes.
(2)Group incentives programe.
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24. categorizing incentives
Class Definition
remunerative
incentives Are said to exist where an agent can expect some
form of material reward – especially money – in
exchange for acting in a particular way.
Financial
incentives
moral
incentives
Are said to exist where a particular choice is widely
regarded as the right thing to do, or as particularly
admirable, or where the failure to act in a certain
way is condemned as indecent. A person acting on a
moral incentive can expect a sense of self-esteem,
and approval or even admiration from his
community; a person acting against a moral
incentive can expect a sense of guilt, and
condemnation or even ostracism from the
community.
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25. coercive
incentives
Are said to exist where a person can expect
that the failure to act in a particular way will
result in physical force being used against
them (or their loved ones) by others in the
community – for example, by inflicting pain
in punishment, or by imprisonment, or by
confiscating or destroying their possessions.
natural
incentives
such as curiosity, mental or physical exercise,
admiration, fear, anger, pain, joy, or the
pursuit of truth, or the control over things in
the world or people or oneself.
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26. other Forms
These categories do not, by any means, exhaust
every possible form of incentive that an
individual person may have. In particular, they
do not encompass the many other forms of
incentive – which may be roughly grouped
together under the heading of personal
incentives – which motivate an individual
person through their tastes, desires, sense of
duty, pride, personal drives to artistic creation or
to achieve remarkable feats, and so on.
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27. The following examples illustrate the method :
Standard time = 10 hrs
Rate per hour = Re 1
Case (i)
Time taken = 8 hrs
Earnings = 10 * 1 = Ru 10.00
Case (ii)
Time taken = 12 hrs
●
Earnings if time wages are not guaranteed
= 10*1 = 10 Ru
●
Earnings if time wages are guaranteed
12*1 = 12 Ru
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28. halsey plan
A wage incentive program established as
the first in the US industry.
The incentive program was created by
Frederick A. Halsey as a method for
improving the straight piece-rate system in
an effort to reduce wage rate cutting
by management.
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29. The following examples illustrate the scheme :
Standard time = 10 hrs
Rate per hour = Re 1
Case (i)
Time taken = 10 hrs
Earnings =10*1 = 10 Ru

Case (ii)
Time taken = 12 hrs
Earnings =12*1 = 12 Ru
Case (iii)
Time taken = 8hrs
Earnings
Time wages = 8*1 = 8.00
Bonus = ½ *2 *1 = 1.00
= 9.00 Ru
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30. rowan plan
It is widely used in England. It was introduced by
James Rowan of David Rowan & Sons, Glass go in
1901. It is modification in the Halsey's Plan. The
premium is calculated on a percentage of wages for
the time worked and not for the time saved. This
gives more bonus to the workers.
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31. The following examples illustrate the scheme :
Standard time = 10 hrs
Rate per hour = Ru 1
Case (i)
Time taken = 10 hrs
Earnings =10*1 = 10 Ru
Case (ii)
Time taken = 12 hrs
Earnings =12*1 = 12 Ru
Case (iii)
Time taken = 8hrs
Earnings =8*1 =8.00
Bonus =2/10 *8 = 1.60
= 9.60 Ru
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32. Advantages of Rowan Plan

(i) Checks over-speeding, overstrain by worker.

(ii) Assured minimum base-wage

(iii) Efficiency is rewarded
Disadvantages of Rowan Plan

(i) Discourages workers to over-achieve.

(ii) Difficulty in ascertaining wages as it requires large data
processing

(iii) Sharing of profit for over-achievement may not be liked by
workers.
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33. Some CompariSonS
 
The piece-rate with minimum guaranteed
wage, Rowan plan and Halsey plan are
compared below. All plans guarantee an
assured minimum wage. For over-
achievers, i.e., those, who perform more
than standard output, will get different
wages in these plans.
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34. 9/4/16 06:06:04 AM34

35. 9/4/16 06:06:04 AM35

36. Taylor differenTial pieCe
raTe SySTem
This system was devised by F.W. Taylor,
the father of scientific management and
was the first systematic attempt in
rationalizing incentive.
It is based on the assumption that the
degree of efficiency varies from worker to
worker and hence the workers must be paid
according to their degree of efficiency. 
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37. To illustrate the taylor’s piece rate system, we take the following:
Standard output = 100 units
Rate per unit = 10 paise
Differentials to be applied:
120 per cent of piece-rate at or above the standard
80 per cent of piece-rate when below the standard
Case (1)
Output =120 units
Earnings = 120*120/100*0.10
=14.40
Case(2)
Output = 90 units
Earnings = 90*80/100*0.10
= 7.20
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38. diSadvanTageS
(i) It does not guarantee a minimum wage for the
workers.
ii) The system is very harsh to the inefficient workers
because they gentle wages due to lower rate and lower
output.
iii) It penalises a worker who just fails to attain the
standard by a narrow margin
It is clear from the above illustration that the workers
with lower efficiency less wages and workers with
higher efficiency get more wages under Taylor
differential piece rate system as compared to ordinary
piece rate system.
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39. merriCk differenTial pieCe
raTe SySTem
This system made by Mr. Merrick, is a
modification of Taylor’s differential piece rate
system. Under Taylor’s differential piece rate
system, workers by whom 100% efficiency
cannot be attained or penalized, where as under
Merrick system, there is no imposition of such
punitive lower rate upon them
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40. The Merrick system can be illustrated as follows:
Standard output = 100 units
Piece rate = 10 paise
Case (1)
Output = 80 units
Efficiency = 80/100*100 =
80%
Earnings-
As the efficiency is less than 83 per cent, only the base piece
rate applies
80*0.10= 8.00 rupees
Case (2)
Output = 90 units
Efficiency = 90/100*100 =
90%
Earnings-
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41. emerSon effiCienCy plan

           In this, a minimum time wage is
guaranteed. Working condition and
standard output are fixed on the
basis of time-study.
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42. The following example illustrates the method:
Standard output in 10 hrs = 100 units
Rate per hour = 1 rupees
Case (1)
Output in 10 hr = 50 units
Earnings:
Efficiency = 50 per cent
As the efficiency is below 67 per cent the worker is entitled to
time wages only.
10*1 = 10.00
Case (2)
Output in 10 hrs = 100 units
Efficiency = 100 per cent
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43. The worker is entitled to time wages plus 20 per cent of time wages as
bonus.
Time = 10*1 = 10.00
Bonus = 20/100*10 = 2.00
Earnings = 12.00
Case (3)
Output in 10 hrs = 130 units
Efficiency = 130 per cent
At the rate of 20 per cent at 100 per cent efficiency and one per cent
increase for every one per cent increase in efficiency, the worker is
eligible for 50 per cent of the time wage as bonus.
Time wages = 10*1 = 10.00
Bonus = 50/100*10 = 5.00
= 15.00
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44. Advantages of Emerson Efficiency Plan

(i) Guarantees minimum wage till 66.67% of standard output.

(ii)Efficient worker is rewarded handsomely.

Disadvantages of Emerson Efficiency Plan

(i) Disproportionate rate of bonus below standard output

(ii)Chances of over-speeding and compromise of quality
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45. SoCial preSSure
It's also worth noting that these
categories are not
necessarily exclusive; one and the same
situation may, in its different aspects,
carry incentives that come under any or
all of these categories. In
modern American society
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46. economics
The study of economics in modern societies
is mostly concerned
with remunerative incentives rather
than moral or coercive incentives – not because
the latter two are unimportant, but rather
because remunerative incentives are the main
form of incentives employed in the world of
business, whereas moral and coercive incentives
are more characteristic of the sorts of decisions
studied by political science and sociology.
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47. recessions
Though bonuses make an integral
component of free market practices on
human beings, continuing to pay them
to executives by companies benefiting
from US Government financial help as
planned and as contracted is facing
great criticism and opposition from
politicians and media.
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48. non-monetary benefits
Compensation given in a transaction which
does not involve cash. A non-monetary
reward can consist of almost
any material object such as
jewelry, precious metals or
an automobile for example. In business, a
non-monetary reward can also be
a service such as improvement made on
a property or repairs done on a car.
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49. the payment of wages act
1936
With the growth of industries in India, problems relating to payment
of wages to persons employed in industry took an ugly turn. The
industrial units were riot making payment of wages to their workers
at regular intervals and wages were not uniform. The industrial
workers were forced to raise their heads against their exploitation.
In 1926, Government of India wrote to local governments to
ascertain the position with regard to the delays which occurred in
the payment of wages to the persons employed in Industry. Material
so collected was placed before the Royal Commission on Labour
which was appointed in 1929.
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50. statement of obJects
anD reasons
In 1926 the Government of India addressed local
governments with a view to ascertain the position with
regard to the delays which occurred in the payment of
wages to persons employed in industry, and the
practice of imposing fines on them. The investigations
revealed the existence of abuses in both directions and
the material collected was placed before the Royal
Commission on Labour which was appointed in 1929.
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51. List of amenDing acts, orDinance anD
aDaptation orDers
1. The Government of India (Adaptation of Indian Laws) Order, 1937.
2. The Repealing and Amending Act, 1937 (20 of 1937).
3. The Payment of Wages (Amendment) Act, 1937 (22 of 1937).
4. The Payment of Wages (Amendment) Ordinance, 1940 (3 of 1940).
5. The Indian Independence (Adaptation of Central Acts and Ordinances)
Order,1948.
6. The Adaptation of Laws Order, 1950.
7. The Part B States (Laws) Act, 1951 (3 of 1951).
8. The Payment of Wages (Amendment) Act, 1957 (68 of 1957).
9. The Payment of Wages (Amendment) Act, 1964 (53 of 1964).
10. The Central Labour Laws (Extension to Jammu and Kashmir) Act, 1970 (51of
1970).
11. The Repealing and Amending Act, 1974 (56 of 1974).
12. The Payment of Wages (Amendment) Act, 1976 (29 of 1976).
13. The Payment of Wages (Amendment) Act, 1977 (19 of 1977).
14. The Payment of Wages (Amendment) Act, 1982 (38 of 1982).
15. The Payment of Wages (Amendment) Act, 2005 (41 of 2005).
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52. minimum wages act
1948
The Minimum Wages Act 1948 is an Act of
Parliament concerning Indian labour law that sets the minimum wages
that must be paid to skilled and unskilled labours. The Indian
Constitution has defined a 'living wage' that is the level of income for a
worker which will ensure a basic standard of living including good
health, dignity, comfort, education and provide for any contingency.
However, to keep in mind an industry's capacity to pay the constitution
has defined a 'fair wage'. Fair wage is that level of wage that not just
maintains a level of employment, but seeks to increase it keeping in
perspective the industry’s capacity to pay. To achieve this in its first
session during November 1948, the Central Advisory Council appointed
a Tripartite Committee of Fair Wage. This committee came up with the
concept of Minimum Wages
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53. 1920: Mr. K.G.R. Choudhary recommended setting up
boards for determining minimum wages for each
industry.
1928: International Labour Conference implemented
system to fix wages for different trades. However, the
practice was not put into legislation in India.
1943: Standing Labour Committee, a Labour
Investigation Committee was appointed on the
recommendation of Indian Labour Conference (ILC),
1943 to look into conditions of labour in terms of their
wages, housing, social conditions, and employment.
1945: The first bill on minimum wages was drafted in
ILC.
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54. straight piece work
Straight Piecework Plan-Incentive pay
in which the employer pays the same
rate per piece, no matter how much the
worker produces. Differential Piece
Rates-Incentive pay in which the piece
rate is higher when a greater amount is
produced.
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55. stanDarD hour pLan
A standard hour plan is an incentive
pay plan which establishes a fixed unit
of time for completion of a task or job.
An employee receives the wage for the
standard unit of time for completion of
the task without regard to the actual
time needed…………….
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56. For example, assume that in an automobile
repair shop the standard time for replacing
a muffler is one hour. Under a standard
hour plan an employee would receive one
hour's wage for replacing a muffler,
regardless of the actual time required. Such
a plan requires accurate measurement of
time necessary for each job or task
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57. compensation of
empLoyees
Compensation of employees (CE) is a statistical
term used in national accounts, balance of
payments statistics and sometimes in corporate
accounts as well. It refers basically to the total
gross (pre-tax) wages paid by employers to
employees for work done in an accounting
period, such as a quarter or a year
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58. obJectives of
compensation
To be precise, Compensation is what an
employee gets in return to his contribution to the
organization. The term compensation includes pay,
incentives, and benefits offered by the employers for
hiring the services of employees. Compensation
planning plays an important role in any HR
department’s efforts to obtain, maintain and retain an
effective workforce. Compensation planning follows a
set of objectives.
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59. wage vs. saLary
The difference between wage and salary defines more
than how much you end up making per year. We use
the terms to often describe differences in types of
work, as well as what is actually counted in the final
total.
Wages are generally paid per hour. This means that
you have to be present and working in order to get
paid. Most of the time, wage jobs are not as inclusive
when it comes to things like paid vacations, or paid
sick days. Wage earners often have to give up pay for
leaving early, coming in late, missing a day, or taking
a vacation.
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60. THANK
YOU
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