Page 143 - DMGT106_MANAGING_HUMAN_ELEMENTS_AT_WORK

Unit 6: Compensation and Rewards

2. Compensation paid to the labour for the service offered is called ............. Notes

(a) wages (b) piece wage system
(c) incentive wage plans (d) rowan plan
3. Job evaluation is a ……………. and, to some extent, an objective method of ranking
jobs relative to one another.
(a) dynamic (b) static
(c) arithmetical (d) logical
4. The ranking method is ……......
(a) simple (b) quick

(c) inexpensive (d) none of these

6.3 National Wage Policy

One of the objectives of economic planning is to raise the standard of living of the people.
This means that the benefits of planned economic development should be distributed among
the different sections of society. Therefore, in achieving a socialistic pattern of society, the
needs for proper rewards to the working class of the country can never be overemphasized.
A national wage policy thus aims at establishing wages at the highest possible level, which
the economic conditions of the country permit and ensuring that the wage earner gets a fair
share of the increased prosperity of the country as a whole resulting from the economic
development.
The term ‘wage policy’ here refers to legislation or government action calculated to affect
the level or structure of wages or both, for the purpose of attaining specific objectives of
social and economic policy.

Minimum wage law is the body of law which prohibits employers from
hiring employees or workers for less than a given hourly, daily or
monthly minimum wage, more than 90% of all countries have some kind
of minimum wage legislation.

6.3.1 Objectives of National Wage Policy
The main objectives are given below:
(a) To eliminate malpractices in the payment of wages.
(b) To set minimum wages for workers, whose bargaining position is weak due to the fact
that they are either unorganized or inefficiently organized. In other words, to reduce
wage difference between the organized and unorganized sectors.
(c) To rationalize inter-occupational, inter-industrial and inter-regional wage differentials
in such a way that disparities are reduced in a phased manner.

(d) To ensure reduction of disparities of wages and salaries between the private and public
sectors in a phased manner.
(e) To compensate workers for the raise in the cost of living in such a manner that in the
process the ratio of disparity between the highest paid and the lowest paid worker is
reduced.
(f) To provide for the promotion and growth of trade unions and collective bargaining.

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