This essay discusses MGT511 wage and salary administration and the wage determination process. Employers compensate employees for their performance. There are other benefits that come under indirect compensation, like accident and health insurance and employers’ contribution to retirement. Providing these additional benefits is one of the objectives of salary administration. This is following the fact that wages are the dominant factor in any community’s economic and social life. They characterize the stratification of occupational categories and satisfy needs as employees’ aspirations change. In the legal sense, wages and salaries have varying connotations, depending on the context. Therefore, modern workforce management places a high emphasis on the wage determination process.
wage and salary administration and the wage determination process
STEPS IN THE WAGE DETERMINATION PROCESS AND THE MGT511 WAGE AND SALARY ADMINISTRATION
Each organization has a different wage determination process. Common processes involve job analysis, wage surveys, grouping similar jobs into pay grades, and pricing the pay grades. A job analysis describes the duties, responsibilities, working conditions and inter-relationships between different jobs. It is necessary to conduct wage and salary surveys in other organizations to determine compensation for a specific job. Afterward, compensation managers group all similar jobs into pay grades. A pay grade comprises the positions of approximately equal difficulty or importance as determined by job evaluation. The aim is to effectively achieve the objectives of salary administration. The next step is to assign pay rates to pay grades. Many companies use a wage curve to assign pay rates.
steps in the wage determination process
PRINCIPLES AND OBJECTIVES OF SALARY ADMINISTRATION
Wage and salary compensation systems should align with organizational needs and be flexible for modifications in response to change. This enables organizations to have the quantity and quality of staff they require. Companies can also retain more employees. Another objective of salary administration is motivating employees for excellent performance and improvement in performance. Salary administration should also maintain equity and fairness in compensation for similar jobs. Cost-effectiveness is a crucial aspect of the wage determination process. Fairness in compensation encourages individual employees to become more productive and achieve personal objectives. Organizations should work on matching market compensation rates and increase it as they prosper.
principles and objectives of salary administration
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