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PRM/U5 Topic 7 Regulatory Compliance including Wage and Pay commission

Pay Commission is set up by Government of India, and gives its recommendations regarding changes in salary structure of its employees. Since India’s Independence, seven pay commissions have been set up on a regular basis to review and make recommendations on the work and pay structure of all civil and military divisions of the Government of India. Headquartered in Delhi, the Commission is given 18 months from date of its constitution to make its recommendations.

Objective of pay/Wage Board in The Private/Government etc.  Organization

(i) To establish a fair and equitable compensation offering similar pay for similar work.

(ii) To attract competent and qualified personnel.

(iii) To retain the present employees by keeping wage levels in nine with competitive units.

(iv) To keep labour and administrative costs in line with the ability of the organisation to pay.

(v) To improve motivation and morale of employees and to improve union management relations.

(vi) To project a good image of the company and to comply with legal needs relating to wages and salaries.

(vii) To establish job sequences and lines of promotion wherever applicable.

(viii) To minimise chances of favouritism while assigning the wage rates.

The following principles should be observed in the wage and salary administration:

  1. Wage policy should be developed keeping in view the interests of all concerned parties viz. employer, employees, the consumers and the society.
  2. Wage and salary plans should be sufficiently flexible or responsive to changes in internal and external conditions of the organisation.
  3. Efforts should be made to ensure that differences in pay for jobs are based on variations in job requirements such as skill, responsibility, efforts and mental and physical requirements.
  4. Wage and salary administration plans must always be consistent with overall organisational plans and programmes.
  5. Wage and salary administration plans must be in conformity with the social and economic objectives of the country like attainment of equality in income distribution and controlling inflation etc.
  6. These plans and programmes should be responsive to the changing local and national conditions.
  7. Wage and salary plans should expedite and simplify administrative process.
  8. Workers should be associated, as far as possible, in formulation and implementation of wage policy.
  9. An adequate database and a proper organisational set up should be developed for compensation determination and administration.
  10. The general level of wages and salaries should be reasonably in line with that prevailing in the labour market.
  11. There should be a clearly established procedure for hearing and adjusting wage complaints. This may be integrated with the regular grievance procedure, if it exists.
  12. The workers should receive a guaranteed minimum wage to protect them against conditions beyond their control.
  13. Prompt and correct payments to the employees should be ensured and arrears of payment should not accumulate.
  14. The wage and salary payments must fulfill a wide variety of human needs including the need for self actualisation.
  15. Wage policy and programme should be reviewed and revised periodically in conformity with changing needs. For revision of wages, a wage committee should always be preferred to the individual judgement, in order to prevent bias of a manager.

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