Maintaining a
company's payroll is one function of salary and wage administration. Employee retention is an important responsibility of those
responsible for salary and wage administration.
Salary and wage administration is the
process of compensating an organization's employees in accordance with accepted
policy and procedures. An important component of a successful organization's
policy for administering salaries and wages is monitoring and evaluating all
employees' compensation to ensure that they're being paid appropriately, both
with respect to others in the same organization and to the marketplace as a
whole. This process is often an integral function of the organization's human
resources department, but in general, the larger the organization, the more
likely is is that it will be handled by a separate department.
The first element of salary and wage administration, the periodic payroll,
is a critical component of any organization's functioning. If payroll is
incompetently processed, the employer itself could conceivably collapse.
Employees' personal budgets and plans are contingent upon getting paid
regularly, and if compensation is late, short, or missing even a single time,
morale is severely affected, as is confidence in the employer's stability.
Whether an employer utilizes the services of a third-party payroll service or handles all payroll
functions internally, it will usually devote significant resources to making
sure that employees are paid the right amount on time.
The second element of salary and wage administration — monitoring
and evaluating employees' compensation — is an ongoing function. This includes
evaluating the elements of each job in the organization and classifying it
according to a number of different criteria, including the nature of the work
itself, the amount of supervision necessary, the physical exertion normally
associated with the job, and the amount of training necessary to do the job
proficiently. The underlying idea is to determine, as nearly as possible, the
value of each job to the employer, and compensate employees accordingly. From
time to time, especially in the absence of collective bargaining, the results
of this monitoring and evaluation process will result in adjustments being made
to wages and salaries. In a collective bargaining environment, these
evaluations will be important in determining any such adjustments, although
other considerations may affect adjustments to wages and salaries.
In the United States, jobs are also evaluated as to whether or not
they're exempt from wage-and-hour laws relative to overtime pay. Most production and clerical jobs, for example, are considered
non-exempt; that is, even if pay is administered on a weekly basis and called
salary, from a legal point of view, the jobs are considered to be hourly.
When a non-exempt worker works in excess of the statutory
requirements, usually 40 hours in a calendar week, they must be paid a premium
in addition to their regular hourly pay. Most executive and supervisory
workers, and some higher-level clerical staff, are considered exempt, which
means that they're paid a flat rate every pay period regardless of the actual
number of hours worked. In general, exempt employees are paid more than
non-exempt. The US Department of Labor has specific tests employers can apply
to every job to determine if it's properly classified as exempt or non-exempt.
Classification of jobs is only one element of the ongoing
evaluation process that's an important component of salary and wage
administration. Employers need to maintain a competitive edge in the
marketplace, and one way to do so is to employ the very best people. Savvy
employers will strive to maintain a competitive edge with respect to
compensation because they understand that their employees are constantly on the
alert for better opportunities, and the total compensation package is one of
the most important elements of an employee retention strategy. Employee
retention, in turn, is an important responsibility of those responsible for
salary and wage administration.
Human Resource
Management & Wages and Salaries Aspect
Human Resource Management is a distinctive approach to employment
management which seeks to achieve competitive advantage through the strategic
deployment of a highly committed and capable workforce, using an integrated
array of cultural, structural and personnel techniques. Extensive training and
culture management programs, individualized reward management systems, as well
as a range of employee involvement mechanisms, all operate towards achieving
enhanced employee contribution. It is a whole range of notions on management
theory, style and practice. Perhaps most usefully considered as a generic term
that covers the entirety of work organization, working terms and conditions and
representational systems, HRM can be depicted as being concerned with all those
activities associated with the management of people in organizations (Boyd
2003).
Businesses rely on effective human resource management (HRM) to
ensure that they hire and keep good employees and that they are able to respond
to conflicts between workers and management. HRM specialists initially
determine the number and type of employees that a business will need over its
first few years of operation. They are then responsible for recruiting new
employees to replace those who leave and for filling newly created positions. A
business’s HRM division also trains or arranges for the training of its staff
to encourage worker productivity, efficiency, and satisfaction, and to promote
the overall success of the business.
Finally, human resource managers create workers’ compensation
plans and benefit packages for employees. Personnel Management is the
development of a set of values that regards individual employees as important
productive entities; the conscious utilization of these value judgments in
making decisions affecting those individuals; and the acquisition of a pattern
of thinking, or rational analysis, which attempts to achieve the most effective
and satisfactory utilization of human...
Wages and
Salaries
In the national accounts, in accordance with the System of National
Accounts, wages and salaries include the values of
any social contributions, income taxes, etc., payable by the employee even if they are actually withheld
by the employer for administrative convenience or other reasons and paid
directly to social insurance schemes, tax authorities, etc., on behalf of the
employee. Wages and salaries may be paid in various ways, including goods or
services provided to employees for remuneration in kind instead of, or in
addition to, remuneration in cash.
Wages and salaries in cash consist of wages or salaries payable at
regular weekly, monthly or other intervals, including payments by results and
piecework payments; plus allowances such as those for working overtime; plus
amounts paid to employees away from work for short periods (e.g., on holiday);
plus ad hoc bonuses and similar payments; plus commissions, gratuities and tips
received by employees.
Wages and salaries in kind consist of remuneration in the form of
goods and/or services that are not necessary for work and can be used by
employees in their own time, and at their own discretion, for the satisfaction
of their own needs or wants or those of other members of their households.
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