Compensation And Minimum Wages
- 1. CRITERIA IN COMPENSATION Law of supply & demand Prevailing wages Ability to pay Governmental factor Standard & cost of living Productivity Bargaining power Job requirements
- 2. DIVERGENT POLICIES HELP To pay minimum wages To pay more than prevailing wages To pay higher wages To pay competitive wages
- 3. COMPENSATION SCENARIO IN IT SECTOR-POLICIES The growth rate of recruitment is 14.5% The average increase in the salary in 2006 was 16% Salary offered based on education,experience,position & skill
- 4. AVERAGE SALARY OFFERED IN IT SECTOR BASED ON EXPERIENCE 10+ Years 7-10 5-7 2-5 0-2 0 55 5 110 15 Salary(in 5 0
- 5. TOP TEN HIGHEST SALARY PRAYERS IN INDIAN IT SECTOR • HCL Infosystems Limited • Hexaware Technologies • RMSI Private Limited • Cadence Design Systems • Tata Consultancy Services • Aztecsoft Limited • Nucleus Software • Induslogic • Kanbay International Inc • Cybage Software Private Limited
- 6. COMPENSATION POLICIES IN INSURANCE SECTOR Policies cover the following Accidental Insurance Medical Insurance Medi claims Family health Insurance Diabetes Insurance etc Policies involve Basic salaries Perks Allowances Accomodation etc
- 7. AVERAGE SALARY OFFERED IN INDIAN INSURANCE SECTOR BASED ON EXPERIENCE 12+ 4-9 Years 1-3 0-1 Salary(in lakhs) 0 2 4 6 8
- 8. TOP PLAYERS OF THE INSURANCE SECTOR • Life Insurance Corporation • New York Life • Prudential • Met Life • Birla Insurance • Kotak Mahindra • ICICI • HDFC
- 9. COMPENSATION POLICY AT ENTRY LEVEL-INSURANCE SECTOR LIC ICICI Prudential New York Life Insurance Met Life Insurance In lakhs Birla Insurance 0 2.5 0.5 1 1.5 2 3
- 10. COMPENSATION POLICY AT MANAGERIAL LEVEL-INSURANCE SECTOR 10+Years 8-10Years In lakhs 6-8Years 3-5Years 0 5 10 15 20 25
- 11. COMPENSATION POLICY IN IT ENABLED SERVICES Policy is designed to attract young talents Policy considers high attriition rate High average salary Compensation is target based Compensation don’t cover job security. Average salary offered by top players at entry level is from 1.5 to 3 lakhs For top management lucrative monetary & non monetary benefits are offered.
- 12. IT ENABLED INDUSTRIES WITH BEST COMPENSATION POLICY Microsoft Oracle IBM HCL Infosys Satyam Sify Wipro LG Samsung
- 13. COMPENSATION POLICIES IN TELECOMMUNICATION SECTOR Policies cover the following Annual bonus House rent allowance Mobile allowance Transportations Paid vacations Travel leaves etc Average salary at entry level ranges from 0.5 to 2.5 lakhs Average salary at managerial level ranges from 5 to 40 lakhs,based on experience.
- 14. TELECOMMUNICATION SECTOR WITH BEST COMPENSATION POLICY Tata Teleservices Reliance Communications Bharti Airtel Ericcson Motorola
- 15. PHILOSOPHY OF COMPENSATION PRODUCTIVITY PHILOSOPHY PURCHASING POWER PHILOSOPHY
- 16. PRODUCTIVITY PHILOSOPHY- ASSUMPTIONS Use of updated tools,techniques & machineries Optimum production Minimising the unit cost of production Lower price of goods Expanded market Increased income from sales Profit sharing with employees Utilising profit to regenerate process
- 17. PURCHASING POWER PHILOSOPHY-ASSUMPTIONS Good compensation to workers Increased purchasing power of the large work force. Effective demands for goods & services Stimulation of future production.
- 18. GROWTH OF SERVICE INDUSTRY Tourism sector is growing at the rate of 8% Good compensation encourage tourists pouring into holiday spots. Average income of people have improved a lot It helped to attain national prosperity People expect quality service & they are ready to pay for it
- 19. EXAMPLE o Distribution of Compensation is as follows Roadways-19% Railways-19% Airlines-27%
- 20. NON IMPLEMENTATION OF PHILOSOPHY- CONSEQUENCES OF PAY DISSATISFACTION Strike Desire for Grievances Absenteeism more pay Search for a higher paying jobs Turnover Pay dissatisfaction Lower Absenteeism Attractivene Job ss of job dissatisfaction Psychological withdrawal Poor mental Health health
- 21. COMPENSATION & PERFORMANCE MODEL Feedback Employee sets Performance is Expectations Employee considers rewarded & goals Equity in compensation Employee sets new goals & expectations Based on performance
- 22. MINIMUM WAGE It is provided for maintenance of life plus for preservation of the efficiency of worker
- 23. MINIMUM WAGE PAID TO Workers working in • Agricultural sector • Cement working establishments • Bakery,Dairy products • Chemicals • Construction activities • Transport Corporation • Ice factories,cold storages • Laundry sevice • Textile Industry • All shops & other establishments
- 24. MINIMUM WAGE IN INDIA Applicable to labourers & workers The Minimum Wage Act,1948 prevents labour exploitation. It varies from state to state. Change in wage rate-(per day) Rs 35 in 1996 Rs 40 in 1998 Rs 45 in1999 Rs 66 in 2004 Rs 80 in 2007
- 25. MINIMUM WAGE IN DIFFERENT STATES-W.E.F. JUNE,2008(Per day) Delhi 156 140 Uttar Pradesh 143.87 113.70 Rajasthan 91 83 Orissa 100 80 Tamil Nadu 158 29 West Bengal 100 81 Gujarat 115 50 Punjab 125 96 Manipur 79.40 72.40 Madhya Pradesh 101 93
- 26. FAIR WAGE Equal to the rate prevailing in the same trade & in the neighbourhood & equal to the predominant rate for similar work throughout the country,
- 27. LIVING WAGE Higher than fair wage,provides for bare essentials plus frugal comforts.
- 28. Living wage is concerned with The needs of the workers & their families Cost of living Social security benefits.
- 29. WAGE DIFFERENTIAL An element that works as wage scale reflecting the average schedule of worker’s pay that takes into account the performance of related tasks or services
- 30. WAGE DIFFERENTIALS • Occupational differentials • Inter-firm differentials • Regional differential • Inter-Industry differentials • Personal differentials
- 31. OCCUPATIONAL DIFFERENTIAL Wages are fixed based on different occupations & various degrees of skill.
- 32. FUNCTIONS Inducing workers to undertake more demanding jobs Encouraging people to develop skills Performing social function
- 33. INTER-FIRM DIFFERENTIALS It reflects the relative wage level of workers in different plants in the same area & occupation
- 34. INTER FIRM DIFFERENTIAL-THE MAIN CAUSES Difference in the quality of labour employed by firms Imperfections in labour market Difference in technological advance Financial capacity of the firm Size of the firm
- 35. INTER-AREA OR REGIONAL DIFFERENTIALS It occurs when workers in the same idustry or same occupational group,but living in different geographical areas are paid different wages.
- 36. REGIONAL DIFFERENTIAL-THE MAIN CAUSES Different rate of payment Difference in cost of living Availability of manpower
- 37. INTER-INDUSTRY DIFFERENTIALS It occurs when workers in the same industry or in the same area but in different industries are paid different wages
- 38. INTER-INDUSTRY DIFFERENTIAL- THE MAIN CAUSES Extent of unionization Capacity to pay Labour capital ratio Stage of development Supply-demand of needed skill
- 39. PERSONAL DIFFERENTIAL It refers different payment made to different individual working in the same plant or same occupation
- 40. PERSONAL DIFFERENTIAL-THE MAIN CAUSES Merit Individual output Experience
- 41. JOB EVALUATION & WAGE Phase 1 SURVEY Identify & study jobs Job analysis Phase 2 Job evaluation Internal equity Job ranking Job grading Factor comparison Point system Phase 3 Wage survey External equity Employer Professional Department Self conducted associations associations Of labour surveys Phase 4 Pricing jobs Matching Internal & external worth Job evaluation worth Match Labour market worth