Goals of wage and salary administrations
The words wage and salary are sometimes considered synonymous strictly speaking however they have slightly different meaning. Wage refers to at an hourly rate of pay and is the pay basis used most frequently for production and maintenance employees. It also refers to an early rate of pay and is the pay basis used most frequently for production and maintenance employees (blue color workers). Salary refers to a weekly, monthly, or yearly rate of pay. It is the money that someone is paid for their job each month, especially when they have professional another non-manual job. Now some goals of wage and salary administration are as follows:
Acquire qualified personnel: Salary and wage need to be high enough to attract applicants. Pay levels must respond to the supply and demand of workers in the labor market since employees compare for workers. Premium wages sometimes needed to attract applicants a working for others.
Retain current employees: Employees may quit when compensation levels are not competitive, resulting in a higher turnover. Employees serve the organization in exchange for rewards. If payments are not competitive, some employees may quit the firm. To retain these employees, pay levels must not compete with that of other employees.
Ensure equity: To retain and motivate employees, employee compensation must be fair. Fairness requires wage and salary administration to be directed to achieving equity.
Reward desired behavior: Pay should reinforce desired behaviors and act as an incentive for those behaviors to occur in the future. Effective compensation plans reward performance, loyalty, experience, responsibility and other behaviors.
Control cost: A rational compensation system helps the organization obtain and retain workers reasonable costs. Without effective compensation management, workers could be overpaid or underpaid.