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Managing Basic

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Objectives Components of Employee Remuneration Theories of Remuneration Consequences of Pay Dissatisfaction Influencing Factors of RemunerationRemuneration Model

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Identify the different components of remuneration

Describe the theories of wage and salarypayments

Identify the variables that influenceemployee remuneration

Point out the wage policy of Government Explain the wage concepts Explain how special groups can be

compensated

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Remuneration

Financial Non-financial

 Job Context Challenging

 jobResponsibilitie

sRecognition

Growthprospects

SupervisionWorking

conditions Job sharing,

etc.

PerquisitesCompany car

ClubmembershipPaid holidays

Furnishedhouse

Stock optionSchemes, etc.

Fringe BenefitsPF

GratuityMedical Care

Accident Relief Health and

Group Insurance,

etc.

IncentivesIndividual

plansGroup plans

Hourly and Monthly 

rated Wages

Salaries

Direct Indirect

Environment

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Reinforcement theoryExpectancy theory

Equity theoryAgency theory

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Desire for More

Pay

Performance

Strikes

Grievances

Search for Higher 

Paying Jobs

 Absenteeism

Turnover 

Pay

Dissatisfaction

Lower Attractiveness of 

Job Job

Dissatisfaction

 Absenteeism

Psychological

Withdrawal

Visits to the

Doctor 

Poor Mental

Health

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Business Strategy Market Position andMaturity

Remuneration Strategy Blend of Remuneration

Invest to grow Merging or growth rapidity Stimulate

entrepreneurialism

High cash with above

average incentive for individual performance.Modest benefits,

Manage earnings-protectmarkets

Normal growth to maturity Reward management skills Average cash withmoderate incentives onindividual, unit, or corporate performance.Standard benefits.

Harvest earnings-reinvestelsewhere

No real growth or decline Stress Below-average cash withsmall incentive tied to costcontrol. Standard benefits.

Source: Wayne F. Cascio, Managing Human Resources, McGraw-Hill, 1995, p.352.

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Job Description

Job Evaluation

Job Hierarchy

Pay Survey

Pricing Jobs

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2003 2004(Increase in percent)

IT 15 17

ITES 23 25

Telecom (Services) 10 12

Insurance 23 25

Banking (Retail) 12 15

Manufacturing 6 7

Pharma 20 22

Source: Business Today, September 12, 2004. p.46 

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Monetaryvs. Non-

MonetaryRewards

EmployeeParticipati

on

PaySecrecy

SalaryReviews

Comparable Worth

Eliticism orEgalitarianis

m

Skill-basedPay

Remuneration

BelowMarket or

AboveMarket Rates

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Factors Job-based Skill-based

Pay structure Based on job performance Based on ability to perform

Employer’s focus Job carries wage; Employeelinked to job

Employee carries wage; Employeelinked to skills.

Employee focus Job promotion to earn greater pay Skill acquisition to earn greater pay.

 Advantages Pay based on value of workperformed

Flexibility; Reduced workforce.

Disadvantages Potential personnel bureaucracy;Inflexibility

Potential personnelbureaucracies; Cost controls.

Source: Raymond A. Stone, Human Resource Management, John Wiley & Sons, 1995, p.324.

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Minimum wage provides for sustenance of life but also

for preserving efficiencyFair wage comparable with standard wages

elsewhereLiving wage providing essentials plus certain

comforts

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