Wage and Salary Administration

The structured approach HR takes to determine and manage employee compensation, including pay scales, salary structures, and benefits.
Effective wage and salary administration ensures fair pay practices, market competitiveness, and internal equity. HR teams conduct periodic salary reviews and benchmarking to maintain consistency in compensation.

What are the methods of wage administration?

‍Common methods of wage administration include:

• Time-based pay: Payment based on hours, days, or months worked.
• Piece-rate pay: Wages linked to the number of units produced.
• Performance-based pay: Bonuses or incentives tied to targets or results.
• Skill-based pay: Compensation increases with skill acquisition.
• Competency-based pay: Pay based on demonstrated behaviors or knowledge areas required for the role.

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What is the objective of wage and salary administration?

The main objective is to ensure fair, equitable, and competitive compensation for employees. This includes:

• Attracting and retaining talent
• Encouraging high performance
• Ensuring internal and external pay equity
• Complying with labor laws and regulations
• Controlling labor costs strategically

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What are the objectives of wage policy?

Wage policy is broader and often guided by government or organizational principles. Its objectives include:

• Ensuring a fair standard of living for employees
• Reducing income inequality
• Improving productivity
• Maintaining industrial peace
• Aligning pay with economic conditions and labor market trends