HRM Functions

Factors Influencing Wage and Salary Administration

The wage payment is an important factor affecting the labor management relations. Workers are very much concerned with the rates of wages as their standard of living is linked to the amount of remuneration they get. Managements, however, do not come forward to pay higher wages because cost of production goes up and profits decrease to that extent. A number of factors, thus, influence the remuneration payable to the employees. The factors influencing Wage and Salary Administration  can be categorized into (i) External Factors and (ii) Internal Factors.

1. External factors influencing Wage and Salary Administration

  • Demand and supply : The labor market conditions or demand and supply forces operate at the national and local levels and determine organizational wage structure.
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Wage and Salary Administration

Wage and salary administration affect levels of employee commitment to the organisation. However, fascinating the individual’s job assignment is, the employee must be paid. Pay affects the way people work-how much and how well. A large part of the compensation that people receive from work is monetary. Although managers are expected to conserve money and distribute it wisely, many employees feel that they should get more of it for what they do. Wages, salaries and many employee benefits and services are form of compensation.

Administration of employee compensation is called wage and salary administration. According to D.S. Beach “Wage and Salary Administration refers to the establishment and implementation of sound policies and practices of employee compensation.… Read the rest

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Wage Payment Systems

The system of wage payment is the method adopted by organizations  to remunerate workers. It is the way of giving financial compensation to the workers for the time and effort invested by them in converting materials into finished products. It indicates the basis of making payment to the workers, which may be either on time basis or output basis. The selection of the system depends on the type and nature of the concern and its products.

The different methods of wage payments are as follows :

1. Time Wage System  

Time wage system  is the oldest method of wage payment. The “Time” is made a basis for determining wages of a person.… Read the rest

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Job Enrichment – Motivation by Enriching Jobs

Fredrick Herzberg gave greater emphasis on job enrichment in his two factor theory. He assumed that in order to motivate personnel, the job must be designed to provide opportunities for achievement, recognition, responsibility, advancement and growth. This technique entails enriching the job so that these factors are included.

It simply means, adding a few more motivators to job to make it more rewarding. A job is enriched when the nature of the job is made more exciting, challenging and creative or gives the job holder more decision making, planning and controlling powers.

According to Beatty and Schneider, “Job enrichment is a motivational technique which emphasizes the need for challenging and interesting and interesting work.

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International Compensation Management

Designing and developing a better compensation package for HR professionals for the international assignments requires knowledge of taxation, employment laws, and foreign currency fluctuation by the HR professionals. Moreover, the socio-economic conditions of the country have to be taken into consideration while developing a compensation package. It is easy to develop the compensation package for the parent country national but difficult to manage the host and third country nationals. When a firm develops international compensation policies, it tries to fulfills some broad objectives:

  1. The compensation policy should be in line with the structure, business needs and overall strategy of the organization.
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Selection Criteria for International Assignments

Making an effective selection decision for an overseas assignment can prove to be a major problem. Typically, this decision is based on international selection criteria, which are factors used to choose international managers. These selections are influenced by the  Multinational Corporations experience and often are culturally based. Sometimes as many as a dozen criteria are used, although most  Multinational Corporations give serious consideration to only five or six.

1. Adaptability to Cultural Change

Overseas managers must be able to adapt to change. They also need a degree of cultural toughness. Research shows that many managers are exhilarated at the beginning of their overseas assignment.… Read the rest

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