Thursday, 17 November 2011

Compensation and Salary Administration. HRM Study Material.



1.        Term compensation administration or wage and salary administration denotes the process of managing a companys compensation program. Goals of compensation administration are to design cost effective pay structure that will attract, motivate and retain competent employees in company.   
¨ Definition :¨
2.         To project good image of company and to comply with legal needs relating to wages and salary.  ¨ To improve morale and motivation of employees and to improve union management relation.¨ To keep labor and administrative cost in line with the ability of organization to pay.¨ To retain present employee by keeping wage levels in tune with competitive units.¨ To attract competent and qualified personnel¨ To establish fair and equitable compensation offering similar pay for similar work.
¨ Objectives :¨
3.         Compensation : may be defined as money received in performance of work plus many kinds of services and benefits that organization provides to their employees. Compensation may be classified into base or primary compensation and supplementary compensation. Primary compensation refers to basic pay in form of wages and salary. It if fixed and non incentive pay on the basis of time expanded in job. Supplementary compensation consist of incentive and variable payments, based on individual output or output of group on whole.  

4.         Workers should receive guaranteed minimum salary to   protect them against conditions beyond control .¨ Adequate database and organizational set up should be developed for compensation determination and administration.¨ Workers should be associated in formulation and implementation of wage policy.¨ Plans should be responsive to changing local and national conditions.¨ Plans should be in conformity with the social and economic objectives of country.¨ Wage and salary plans must be consistent with overall organizational plans and programmes.¨ Wage and salary plans should be flexible or responsive to internal and external conditions of organization.¨ wage policy should be developed keeping in view the interest of all concerned parties that is employer, employee, consumers society etc.
¨ Principles of compensation and administration :¨
5.         Trade union bargaining power : we rates are influenced by bargaining power of trade union. Stronger the trade union higher will be the wage rates. The strength of trade union is judged by its members, financial position and type of leadership.  ¨ Cost of living : wage rates are directly influenced by cost of living of a place. Workers will accept a wage which may ensure them a minimum standard of living. Higher cost of living more will be wage rate and lower the COS lower will be the wage rate.¨ Demand and supply : labour rates in markets depends upon the demand and supply of labor. When the demand for labor is more and supply is less then wages provided to workers will be more on contrary when supply is more and demand is less then wages rates will automatically come down.
¨ External factors :¨ Factors affecting wage and salary :¨
6.         Economy :   refers to economic conditions prevailing in country. E.g. recession, deflation¨ psychological and social factors : level of compensation is perceived as a measure of success in life. Management should take into consideration the psychological needs of employee while fixing the wage rates so that employee take pride at their work.¨ Government legislation : to improve the working conditions of workers government may pass legislation for fixing minimum wages for workers. This may ensure them minimum level of living. In underdeveloped countries the workers bargaining power is less, to protect interest of workers government may bring in legislation to ensure appropriate salary to workers.¨
7.         Prevailing market rates : wage rates paid in the industry or firm will form a basis for fixing wage rate. If the concern pays low wage rate compare to its competitors the employee retention becomes difficult in organization.  ¨ Technological development : increased technological development at faster rate has lead to increase demand for skilled workforce in organization. High technology implemented in company requires skilled workers which leads to payment of high salary for workers in company.¨
8.         Employees :   performance, seniority, experience,
¨ Management strategy : companys strategy is one of important factor affecting remuneration in company. Company which is development oriented focuses on retaining employees by paying high salary, while company focusing on stabilizing itself in market prefer paying reasonable pay package to employees in company.¨ Job requirements : basic wage depends largely on the level of difficulty, physical and mental stress involved in performance of task. Job which requires service of skilled people will have more pay scale compare to work involving requirement of semiskilled or unskilled workers.¨ Ability to pay : of enterprise will decide wage rate in company. A profitable concern will be in position to pay better pay package compare to the one running under loss .
¨ Internal factors :¨
9.         2. conduct salary survey : compensation or salary survey play central role in pricing jobs. Employers conduct formal as well as informal survey to collect data about salary rate in market. Salary survey is conducted for three reasons i) survey data are used to price the benchmark job that anchor pay scale. ii )   some jobs of an employers position are directly priced¨ 1. job analysis : describes duties, responsibilities, working conditions between the job and other jobs associated with it. Job description are important in designing pay systems as they help to identify important job characteristics. In next step jobs in company are given grade which mention importance of job in company.
¨ Wage and salary determination process :¨
10.      4.Price each pay grade : next step is to assign pay rates to pay grades. Assigning pay rates to each pay grade is usually accomplished with wage curve. Wage curve depicts graphically the pay rate currently being paid for jobs in each pay grade. The purpose of wage curve is to show the relationship between value of job as determined by job evaluation methods and current average   par rates for the grades.¨ 3.Group similar jobs in pay grades : in this step jobs are divided into grades in which jobs put in single grades are similar in nature relating to task performance, time required etc. pay grade is essential for pay purposes as task of assigning grades becomes easy when employees are segregated in levels according to their task.¨
11.      6. wage administration rule : development of rules of wages administration has to be done in the next step and it is important to communicate information about average salaries that will be provided to   employees in company.¨ B) correcting out line rates : average current pay for the jobs may be too high or low, relative to other jobs in the firm. If rate falls below the line, pay rise for job may be required. If the rate falls above the wage line pay cuts may be required.¨ A) developing rate ranges : it refers to employers divide jobs in company in different ranges and collect data relating to pay scale provided to employees according to their grades.¨ 5. fine tune the pay rates :¨
12.      Job evaluation is the practice that seeks a degree of objectives in measuring the organization value of jobs within organization and among similar organization.  ¨ Job evaluation : is an effort to determine the relative value of every job in plant to determine what the fair basic wage for such job should be.¨
13.      To help in introducing standardization in wage   differentials.¨ To provide fair change for all employees for advancement.¨ To provide basis for consideration of wage rates for similar jobs in industry.¨ To ensure job satisfaction among employees in company.¨ to determine fair and equitable wage structure in the plant, industry and place.¨ To determine upon a standard procedure for determining the relative worth of each job in the plant.¨ To know the worth of each job in organization.¨ Objectives of job evaluation :¨
14.      Process of job evaluation :1.gaining acceptance : before undertaking jon evaluation program management is required to communicate required to communicate the procedure of job evaluation and its importance in company.2. Constituting job evaluation committee : process of job evaluation is to be done by experienced person in company. So committee of experts is to be formed who can conduct process of job evaluation in the company.3. Selection for key jobs for evaluation : due to time and cost¨ constraint it will be difficult to conduct JE for all jobs in company. So company will select certain set of  jobs as sample evaluation is done on these jobs and conclusion obtained is
15.      Working conditions   points are assigned to each criteria and then pointsq Efforts and initiativeq Experienceq Skills mental and manualq4. Job description : is important for the process of job evaluation as job description mention in detail the KSA required to perform the job, task and responsibility assigned to particular job which acts as standard to compare employees present performance with expected one.5. Selecting method of evaluation : there are several methods of job evaluation among which method appropriate to organization should be implemented in company.6. Classifying jobs : worth of various jobs in organization can be assessed using following criteria :
16.     7.Installing the program : after the completion of evaluation process management should explain same to employees and put it into operation.8. Periodic review : of plan will help management to check weather plan in is line with expectation.  
17.      It provides basis for sound bonus scheme, helps in job classification and work simplification in company.  ¨ Disputes arising out of wages can be settled by referring it to job evaluation committee.¨ Data obtained by job evaluation helps in the process of selection, transfer, promotion etc.¨ Helps in fixing new jobs in present wage structure.¨ Job evaluation is objective method of ranking the jobs. It helps in removing inequalities in wage structure.
¨ Advantages of job evaluation :¨
18.      As it is expensive it cannot be affordable for   company engaged in small scale operations.¨ Job evaluation is time consuming and requires advice of experts in company.¨ Factors selected in job evaluation may overlap each other criteria chosen for all the persons may not hold for different jobs as employees vary in their characteristics in terms of nature, ability, attitude etc.¨ As job evaluation is carried on by human being there is chance of process being biased due to influence on evaluator band relatives friends and relatives working in company.
¨ Limitations :¨
19.      4. ranking all the jobs  q 3.Selection of raters : company selects set of raters who rate job as per their importance in company.q 2.data about job profile in the company.q 1.preparation of job description : which provides detailq Steps in ranking method:q Qualitative method :1. Ranking method : all the jobs are ranked in order of their importance from simplest to the hardest order each job being higher then the previous on in the sequence.
¨ Methods of job evaluation :¨
20.      Jobs are put in relevant grades or classification  ¨ Grading the key jobs¨ Selection of grades and key jobs¨ Preparation of grade description¨ Steps in grade system :¨ Job grading method : number of predetermined grades are decided by the committee and each job is assigned to one of the grades.¨
21.      Assigning money value to points.  ¨ Assigning of weights¨ Determination of degree¨ Number of factor to be used¨ Type of job to be evaluated¨ Steps in process of point stem :¨ Point system : it involves quantitative and analytical approach factors are assigned to the measurement of job worth. Important factors to be considered in each job are determined. Degree of each factor is determined by assigning points. Factors are assigned to points and sum of them will give index for relative significance.
¨ Quantitative method :¨
22.      establishing wage structure  ¨ Comparison of jobs¨ Valuating the factors¨ Ranking key jobs¨ Selection of key jobs¨ Selecting factors to be used¨ Steps in factor comparison method :¨ Factor comparison method : this method is combination of ranking and point system of job evaluation. Relative rank of the job is evaluated in relation of monetary scale. Some key jobs are selected at the first instance and then ranked by considering one factor at a time.¨
23.      Wage and salary survey : ensures external equity of wages payment in company. It provides information about salary package provided to¨  Reports of employees and employers in organization.  ¨ Pay commission reports¨ Reports published by ministry of labour¨ Data related to salary can also be obtained through secondary sources such as¨ Salary survey could be formal or informal in nature to collect data on benefits like insurance, medical leave, vacation pay etc.¨ They represent full range of jobs in terms of jobs being paid high, average and low salary.¨ Jobs will not change in immediate future in terms of task and responsibility.¨ Many workers in other companies have similar jobs.¨employees in competitors company. Survey may cover all jobs in organization or limited number of jobs taking them as benchmark. Benchmark jobs have following basic characteristics :
24.      Broad classification method : broad groups of relatively homogenous jobs in industry, profession are collected and compared.  ¨ Job evaluation method : in this method data collected from job evaluation is considered for fixing salary in company.¨ Occupational method: certain basic occupation groups like clerks, office managers are identified and then data is collected.¨ Key class matching : similar classes of jobs are identified and data is collected.¨ Key job matching : in this method similar key jobs are identified between the organization and data is collected.
¨ Survey methods used to collect salary data :¨
25.      Wage structure : term structure is used to describe wage relationship within a particular grouping. Grouping can be according to occupation or organization.  ¨ Wage levels : represent money an average worker makes in geographical area or in his organization. Only average specific market, firms, individual wage rates can vary widely from the average.¨ Salary : refers to weekly or monthly rate paid to clerical, administrative and professional employees.¨ Wage : is general term referring to direct monetary compensation. It is used specifically to refer to payments to hourly rated proe.duction and service workers.¨ Salary in company is comprised of wages, basic pay, dearness allowance etc.¨ Salary structure :¨
26.      Dearness allowance : it is paid to employees in order to enable them to face the increasing expenditure on essential commodities. There will be increase in price of goods on continuous basis, instead of increasing basic salary companies prefer providing dearness allowance to   employees to meet extra expenditure.¨ Responsibilities involved.¨ training needs of job¨ Difficulty of work¨ Experience¨ Skills required for job¨ Basic wage will be fixed to employee taking following criteria into consideration :¨ Basic wage refers to take home salary of individual employee are taking to consideration all the deductions to be made in payment.¨
27.      To project good image of company in compliance with the legal needs relating to wages.  ¨ To enhance employee morale and motivation to improve union management relation.¨ To control labour and administrative cost in line with the ability of organization to pay.¨ To retain present employee by fixing wage level in tune with the competing units.¨ To attract qualified and competent employees¨ To establish fair and equitable remuneration offering similar pay.¨ Objectives :¨ Benefits administration : refers to management of benefits provided to employees in company :¨
28.      These plan should simplify other administrative process.  ¨ Plans should be in response to changing local and national conditions.¨ Wage and salary administration plan should be in conformity with social and economic needs.¨ Wage and salary administration plans must be consistent with overall organizational plan.¨ Job evaluation must be done scientifically in company.¨ Wage and salary plan should be sufficiently flexible
¨ Principles of benefits administration :¨
29.      Evaluating unsatisfied wants and unrealized goals.  ¨ Measuring job satisfaction of employees¨ Comparing performance with salary received¨ Measuring the actual performance¨ Determining efforts necessary to achieve the standards¨ Developing quality, quantity, and time standard related to work.
¨ Benefits of administrative system : relating salary to needs and goals¨
30.      Bonus is extra payment to workers beyond the normal wage. Bonus is deferred payment which aims at bridging gap between the actual wages and the need based wage. Bonus is a share of workers in prosperity of organization. It is a incidentally treated as a source of bridging gap between actual wage and need based wage.  ¨ Bonus is “something in addition to what is expected or strictly due as, (a) money or an equivalent given in addition to an employee’s usual compensation; (b) a premium [as of stock] given by a corporation to a purchaser of its securities, to a promoter, or to an employee; (c) a government payment to war veterans; (d) a sum in excess of salary given an athlete for signing with a team.”¨
31.      To supplement earning of workers  ¨ To make workers feel as members of the enterprise rather than only employees.¨ To help maintain cordial relation in organization.¨ To recognize the right of workers for sharing the prosperity of the company.¨ Objectives of profit sharing :¨ Payment is based on seniority for wages of workers.¨ Profit are paid to workers in addition to their normal wages.¨ Workers are given a part of profit exceeding certain limit.¨ Characteristics of profit sharing :¨ Profit sharing :realization that workers contribute significantly to increase in profits has encouraged this system. Profit sharing is method of remuneration under which an employer undertake to pay his employees a share in the net profits of an enterprise, in addition to regular wages.¨
32.      Social justice : sharing of profits with employees will ensure balanced growth of economy leading to social justice in economy.  ¨ Additional earning : profit sharing is additional earning to employee on basic pay which makes it easier for employees to raise their standard of living.¨ Reduction in labour turnover : in profit sharing plan employees who have longer duration of service are eligible for more profits so this will make it easy for company to retain employee leading to reduced employee turnover.¨ Cordial relation : industrial relation is generally disturbed due to strike and employee grievance in company due to which production process will be hindered in organization leading to decreased profit for company. As organization profit are related to employees benefit employees do not prefer to go on strike in company.¨ Increase in productivity : workers of company try to increase their efficiency as company profit will have direct relation with employee profit in company.
¨ Merits of profit sharing :¨
33.      Opposition by trade union : profit sharing scheme are not supported by trade union as employees will be of opinion that by sharing profit of company management will expect loyalty from employees.  ¨ Manipulation of accounts : management may indulge in manipulation of accounts by not showing actual profit gained by company.¨ Uncertainty of profit : as the business environment is uneven company is not assured of getting fixed amount of profit even after hard efforts of workers due to which employees will not have an idea relating to their income.¨ No distinction between efficient and inefficient employees : in profit sharing all employees in company are eligible for profit irrespective of their profit which will discourage efficient employee in company.
¨ Demerits of profit sharing :¨
34.      Helps in maintaining cordial relation between employees and management in company.  ¨ Not prefer shifting job from one company to other.¨ Employee retention in company becomes easy as employee who have more years of experience are eligible for ESOP in company due to which employees do¨ It proves to be an effective motivator as profits of company are related to employee profit which give good reason for employee to deliver effective performance for company.¨ Advantages of ESOP :¨ Employee stock ownership option : in this plan the eligible employees are allotted companys shares below market price. Term stock implies the right of an eligible employee to purchase a certain amount of stock in future at agreed price. Eligibility criteria may include length of service, contribution to department, where employees work. Allotted shares are held in the trust and transferred to name of employee whenever he or she decides to exercise the option.¨
35.      Pay for performance : refers to individual may be having a fixed pay, in addition to it employees incentive may be variable in nature that is related to employees performance in terms of productivity or other criteria fixed for incentive in company. Even employees basic pay may be related to performance where employees payment is completely related to work generated by employees in company.  ¨ Lack of transparency may create feeling of favoritism among employees.¨ It may difficult to cash share in short duration.¨ Stock prices always do not reflect fundamentals.¨ Only profitable company can use it as tool.
¨ Demerits of ESOP :¨
36.      Offers minimum benefit to efficient workers in companyq It makes no distinction between efficient and inefficient workers  q Suitable to beginners and learners Demeritsq Workers are assured with minimum guaranteed wagesq It is simple to understand and operateq Methods of wage payment :1. Time wage system : in this system workers are paid on the basis of time spent on the work irrespective of the amount of work done. The basis of time may be hour, day, week or month. This method follows certain criteria in which a) quality of work is more important than volume b) measurement of work is not convenient c) production involves delay and interruption due to uncontrollable factors. 
Merits¨
37.      Piece rate system : in this system workers are paid at rate per unit of output. Speed is taken as basis for payment, instead of time. This method is applicable where a) quality of work is not important b) work is repetitive in nature c) job rates a¨ Differential pay  among employees in will lead to conflict company.¨ It becomes difficult for beginners as they need time to adjust to workplace.¨ No minimum wages are fixed for employees leaving their earning in unsecured position.¨ Demerits¨ Ideal time will be reduced to minimum time as employees are not paid for extra time wasted on job.¨ As wage rates are fixed preparing quotations becomes easy.¨ Provides encouragement for higher production by rewarding efficient workers.
¨ Merits¨re fixed d) job is standardized in nature.
38.      Piece rate with a fixed dearness allowance or cost of living bonus.  ¨ Guaranteed wages according to time rate plus a piece rate payment for units above a required minimum.¨ If earning on basis of piece rate is less then the guaranteed minimum wages. The workers will be paid on the basis of time rate. If the earnings are taken according to piece rate is more, the workers will get more.¨ Workers are paid minimum wages on the basis of the time rate. Piece rate system with guaranteed time rate includes any one of the following :¨ Piece rate with guaranteed time rate :¨ Earning = number units * rate per unit.¨ Straight piece rate system : in this method payment is done on the basis of a fixed amount per fixed units produced without regard of time taken.
¨ Types of piece rate system :¨
39.      Standard time is fixed and workers are expected to perform work in standard  time.¨ Incentive are offered to efficient employees by way of bonus in company.¨ Minimum wages are guaranteed to all workers.¨ Features of incentive plan :¨ Incentive : is extra payment given to worker for their meritorious performance in terms of time, cost and quality etc. incentive may take form of bonus and premium. Bonus means payment to workers of the entire benefit accruing to firm as result of higher output or better quality will be shared equally.¨ b) output can be identified with individual workers.¨ This method is suitable where a) work is repetitive in nature¨ Differential piece rate : in this scheme rate per piece is increased, as the output is increased. Increase in rate may be proportionate to increase output.¨
40.      This system penalizes slow workers by paying low rate because of low production, rewards an efficient worker by giving him high rate because of higher production.  ¨ If the worker finishes the work within standard time ( or produces more then standard output within time ) he will be given high piece rate.¨ Standard of efficiency is determined in terms of time or output based on time and motion study.¨ He has considered two piece work rate, one is lower and other is higher.¨ 1. Taylors differential piece rate system :¨ A . Piece rate :¨ Individual incentive plan : these plans are one of most effective employee motivating tool in company. It is one of method of variable pay implemented in company.¨
41.      If the worker completes work before standard time employee is eligible for 50% bonus.  ¨ Worker receives guaranteed wages on basis of time spent irrespective of their work completion.¨ Standard time is fixed for each job.¨ 1. Hasely plan : this method recognizes individual efficiency and pays bonus on the basis of time saved.¨ B. standard hour plan :¨ Merricks differential piece rate system : in this system workers are divided in three grades one set of employees are person who perform below average, next set of employees are person who perform as per expectation and next grade of employee are persons who perform above expectation and are eligible for incentive in organization.¨
42.      Fixation of standard is not easy.  ¨ It does not provide complete benefit to workers as incentive is shared among all employees in company.¨ Workers will in hurry to complete work because of which quality of work will be affected.¨ Demerits :¨ Saving in time reduces labour and overhead expenses.¨ It provides increasing incentive and benefit to efficient workers in company.¨ It guarantees minimum wages and provides security to employees.¨ This method is simple in nature¨ 
merits¨
43.      Ordinary worker may find bonus calculation difficult.  ¨ Demerits¨ This method makes it easy for workers to self monitor their performance in line with self expectation¨ It ensures minimum time wages¨ Merits¨ Total earnings = time taken * hourly rate + bonus¨ time allowed¨ Bonus = time saved * time taken * hourly rate¨ Rowan plan : bonus if paid on fixed basis in hasely plan on contrary in this plan bonus is paid on the basis of time saved at work¨
44.      As it classifies workers in two categories, it may lead to conflict among efficient and¨ Demerits :¨ Ensures guaranteed wages to employees.¨ It is acceptable by workers¨ Merits :¨ Worker performing more then expectation will be paid higher piece rate.¨ Worker unable to complete work in standard time will not be paid on time basis.¨ Standard time for task is fixed and time wages as well as high rate per piece are determined.¨ This plan combines time piece and bonus system.¨ Gantt plan and bonus plan¨  In this method labour cost will be high for low production.  ¨inefficient workers.
45.      Ruckers plan : in this plan employees receive a constant proportion of added value. Added value refers to change in market value resulting from alteration in form. In this ratio between earnings and added value will result in  ¨ A. priestmans production bonus : standard is fixed relating to production if group members are able to produce more then specified standard then they are eligible for bonus.¨ Group incentive plan :¨ Haynes manit plan : follows similar criteria in terms of incentive payment but employee will be give 50% percent of time saved as bonus.¨ Time taken at amount paid + 75% of time saved * 1/60¨ Bedeaux plan : in this plan every operation or job is expressed in terms of standard minutes, which are called as B. employees get incentive at rate of 75% of time saved in this plan.¨
46.      Merit pay : is a lump sum amount provided to employees in company annually or as per the schedule fixed by   organization. this additional amount is not added to¨ Co- partnership : in this method company shares profit as well as capital of organization with employees. Bonus of employees are kept in form of savings with company as shares. When employee is planning to leave organization same is returned to employee in form of cash or company shares.¨ Towne plan : in this method standard cost is fixed per labour and if the labour cost incurred is less then standard, then 50% of labour cost saved is provide as bonus to employee in company.¨ Scanlon plan : in this plan constant proportion of added value of output is paid to workers who are responsible for value addition. Added value is change in market value resulting from alteration in form of location, product, service, excluding the cost of purchase materials or services used in production.¨
47.      Labour welfare measures are introduced by employers, employee, government etc.  ¨ Labour welfare is dynamic in nature varying from country to country.¨ Welfare measures are in addition to wages and other economic benefits available.¨ Is comprehensive term including services. facilities, amenities.¨ Features of labour welfare :¨ Employee welfare : means anything done for the comfort and improvement- intellectual or social, of the employees over and above the wages paid which is not necessity of industry.¨
48.      Employers secure the benefits of reduced absenteeism, cordial industrial relation etc.  ¨ Leads to reduced employee turnover in organization.¨ Welfare measures helps in maintaining better industrial relation in company.¨ Welfare measures help to improve goodwill and public image of company.¨ Labour welfare services help to improve employee productivity in company.¨ Improvement in material, intellectual, and cultural conditions of life protects workers from social evil.¨ Welfare facilities provide better physical and mental health to workers.¨
Significance of labour welfare :¨
49.      Employers : employers are responsible for creating better organizational culture which motivates employee to perform well, also focus on proving basic facilities and infrastructure   facilities to employees in company.¨ State government : sate government and union territories provide welfare facilities to workers. Implementation of many provision of various labour law rests with state government. State government runs health and family centers, education centers, vocational guidance, recreational training etc.¨ Central government : has brought in various acts to ensure employee welfare in terms of proper salary payment, providing of infrastructure facilities and hygiene facilities required by employees in company. Acts implement for labour welfare in company are factories act, children employment act, maternity benefits act, plantation labour act etc.¨ 
Agencies of labour welfare :¨
50.      Cooperative store and banks etc.  ¨ School, reading rooms, library, etc.¨ Dispensaries and maternity homes¨ Trade unions : take responsibility of employees welfare in company and act as employees representative to ensure availability of all rights to workers in company. Following welfare facilities are provided to employees in company :¨
51.      Medical facilities : safety in terms of health is very important for employees in company. Company ensures to maintain medical kit or visiting doctor to attend emergency cases or employee injuries in organizati¨ Facilitative services : include housing facilities where companies provide colony to employees who come in from different state or country to make process of transfer easier for employees.¨ recreational services : management provides recreational facilities to employees. Recreation in the form of music, sports, games, arts that plays important role in physical and mental development of employees.¨ Economic services : provide additional economic security over and above employees salary or wages. E.g. pension, life insurance, credit facilities etc.¨ 
Types of labour welfare services :¨
52.      Consumer cooperative stores : national cooperative board has set up committee in 1961. which suggest that employers should introduce consumer cooperative stores in their labor welfare programs.  ¨ Transportation : organization has to provide proper transportation facilities to workers to come in and return back from company. It is one of important aspect as it ensures timely presence of workers in company.¨ Education facilities : national commission on labour and committee on labour welfare has recommended that facilities should be provided for educating the workers and running school foe workers children.¨
53.      Prescribed amount of washing allowance to above number¨ Proper facility relating to lightning, ventilation, motor transport etc.  ¨ Motor transport workers act : canteens of prescribed standards if employing more then 300 employees in company.¨ Appointment of welfare officers employing more then 300 employees in company.¨ Housing facility for workers and their family.¨ Educational facility for workers children if childrens age is from 6 to 12.¨ Recreational facilities for workers and their family.¨ Crèche facility if more then 50 women are employed in company.¨ Plantation labour act : canteen should be there where ever more then 150 or more workers are employed.¨
54.      Provision of educational facilities.  ¨ Establishment of hostels, clubs and canteen.¨ To supply medicine, medical stores and medical advice.¨ Supply of sufficient drinking water.¨ Crew accommodation¨ Merchant shipping act 1958¨ First aid box equipped with prescribed contents .¨ Washing facilities¨ Rest room or suitable alternative accommodation where contract labour is required.¨ Canteen in every establishment employing 100 or more workers.¨ Contract labour act 1970 :¨
55.      Fair price shops.  ¨ Sports and recreation¨ Libraries¨ Educational facilities¨ Schools¨ Housing¨ Other welfare measures provided are :¨ Call stands.¨ Rest shelters¨ Canteens¨ Washing facilities¨ Drinking water¨ Amenities provide in port premises include :¨ Dock workers act 1948 :¨
56.      Welfare officers   : factory employing more then five hundred workers is required to have welfare officer to take care of¨ Crèches : company employing more then thirty women is required to have crèche facility.¨ Shelters rest rooms and lunch rooms.¨ Canteens : factory employing more then two hundred employee in company.¨ First aid appliances : should be there in company to meet accidents cases in organization for every hundred employee in company.¨ Facilities for sitting¨ Facilities for storing and drying clothes¨ Washing facilities : adequate and suitable facilities for washing facilities shall be provided to employees ion company.¨ Factories act 1948 :¨

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