Module 11: Wage and Salary Administration
Wages and Salary Administration poor quality of material
process of fixing wages/salary for unfair rules
different jobs in the organization lack of recognition
through evaluation, negotiations 3) Supervision - objections to the general
with the unions methods of supervision related to the
attitudes of the supervisor towards
Grievance Handling the employee
a complaint from employees when perceived notions of bias
ignored may take the form of favoritism
industrial disputes (grievance) nepotism
caste affiliations
Grievance regional feelings
a complaint genuine or otherwise,
about any issue relating to the job 4) Organizational Change - any change
(supervisor, wages, working in the organi-zational policies can
conditions) result in grievances
any dissatisfaction or feeling of implementation of revised
injustice having connection with company policies or new working
one’s employment situation which practices
is brought to the attention of
management 5) Employee Relations - employees are
any dissatisfaction that adversely unable to adjust with their colleagues
affects organizational relations and suffer from feelings of neglect and
productivity victimi-zation
Dissatisfaction - become an object of ridicule and
anything that Grievance humiliation or other inter-employee
disturbs an emplo- (According to dispute
yee, whether or not Michael
the unrest is Jucious) 6) Miscellaneous - issues relating to
expressed in words a state of certain violations
Complaint - a promotions
spoken or written safety methods
dissatisfaction transfer
brought to the disciplinary rules
attention of the fines
supervisor or the granting leaves
shop steward medical facilities
Grievance - a
complaint that has Effects of Grievance:
been formally 1) On the production
presented to a low quality of production
management low productivity
representative or increase in the wastage of material,
to a union official spoi-lage/leakage of machinery
increase in the cost of production
per unit
dissatisfaction, expressed or unex- 2) On the employees
pressed, written or unwritten, increase in the rate of absenteeism
justified or unjus-tified, having and turnover
connection with employment situa- reduction in the level of
tion commitment, sincerity and
Causes of Grievances: punctuality
1) Economic - employees may demand for increase in the incidence of
individual wage adjustments; they accidents
may feel that they are paid less when reduction in the level of employee
compared to others morale
late bonus
payments 3) On the managers
adjustments to overtime pay strained superior-subordinate
perceived inequalities in treatment relations
claims for equal pay increase in the degree of
appeals against performance- supervision and control
related pay awards increase in indiscipline cases
increase in unrest and thereby
2) Work Environment - undesirable or machinery to maintain industrial
unsatisfactory conditions of work peace
light
space Performance Appraisal
heat or poor physical conditions of process of measuring and
workplace evaluating the perfor-mance or
defective tools and equipment accomplishments (including
Module 11: Wage and Salary Administration
behavior) of an employee on the job every job requires certain
front for a given period capabilities on the part of the
assess the worth and value of a person who does the job
person to the organization mean effort, skill physical,
assessing his/her potential for responsibility, working
future develop-ment in an objective conditions
manner
Step Involved in the Factor
Steps in Performance Appraisal Comparison Method:
1. Create set up performance standards. Identify the key jobs
2. Mutually set identifiable and measurable. rank the key job, factor by
3. Measure present level of performance. factor
4. Compare and appraise present level of Apportion the salary among
performance with standard. each factor and rank the key
5. Discuss the appraisal with employee . jobs
Identify and initiate the corrective action. Compare factor ranking of each
job with its monetary ranking
Job Evaluation Develop a monetray comparison
rate the job not the rank scale
an attempt to determine and Evaluate non-key jobs based on
compare the demands which the the monetary comparison scale
normal performance of particular job
makes on normal workers (without b) Point-Rating Method - there are
taking account of the individual four widely accepted factors used in
abilities or perfor-mance of workers the point rating method:
concerned) skill
effort
Method of Job Evaluation responsibility
1) Qualitative Method – ranking or job conditions
classifying the job from lowest to
highest 1. Education and training
2. Experience
Skills
a) Ranking Technique 3. Judgment
jobs in the organization are 4. Initiative
arranged in either in the 1. Physical
ascending or descending order Efforts
2. Mental
and numbered serially 1. Materials or product
basis could be the job description Responsib
2. Equipment or process
in terms of duties, responsibilities, ility
3. Safety of others
qualifications need-ed, relative towards
4. Work of others
difficulty involved in the job, or
value to the company Merit Rating
process of evaluating the relative
Points Considered: merit of the person on a given job
Amount of work involved an essential task of the personnel
Supervision needed manager to distinguish the
Extent of responsibility required meritorious employees from the
Difficulties involved in the work other
Work conditions required the date collected from this task is
used for strategic decisions
b) Classification Method (Job-Grading (releasing an increment in pay,
Method) promotion, transfer, and transfer on
number of grades and the salary promo-tion to a critical assignment or
particulars for each grade are even discharge)
worked out first
grades are clearly described in Method of Merit Rating
terms of knowledge, skill and so 1) Ranking Method
on all the staff of a particular cadre or a
department are arranged either in the
Major Steps for Job Evaluation: ascending or the descending order
Deciding the number of grades in order of merit or value to the firm
Writing grade desriptions it cannot be followed where the
Identifying/listing of the jobs to employees in the department are
be evaluated many in number
Preparing job descriptions
2) Paired Comparison Method
2) Quantitative Method - point values every employee is compared with all
are assigned to the various demands of others in a particular cadre in the
a job and relative value is obtained by department
summing all such point values
a) Factor Comparison Method
Module 11: Wage and Salary Administration
the rater can decide which of the
employees is more valuable to the
organization
3) Rating Scale
the factors dealing with the quantity
and quality of work are listed and
rated
a numeric value may be assigned to
each factor and the factors could be
weighed in the order of their
relative importance
all the variables are measured
against a three or five point scale
4) Forced Distribution Method
employees are given a set of
alternatives and they have to
choose one, which reflects their
understanding of the true nature
of the job
their thinking is conditioned by the
given set of answers
5) Narrative or Essay Method
the candidate is required to narrate in
an essay format his/her strengths,
weaknesses, and potential to
perform
the candidate is not restricted by
any given set of alternatives
the candidate is free to decide what
to furnish or what not to furnish
Management by Objectives (MBO)
the short-term objectives
standards
a systematic method of goal setting
this method considers the actual
performance as the basis mutually
agreed upon by the manage-ment
and the employees are used as
performance for evaluation
provides for reviewing performance
based on results rather than
personality traits or characte-
ristics
not practical at all levels and for all
kinds of work in the organizations