PROJECT REPORT ON

WAGES AND SALARY ADMINISTRATION

SUBMITTED BY
MS. ASHLEEN ANAND
ADMISSION NO. :- DPGD/JL09/1063
SPECIALIZATION : - HUMAN RESOURCE
WELINGARS INSTITUTE O! MANAGEMENT " RESEARCH
MUMBAI.
JUNE #011
ACNOWLEDGEMENT
A project can never attain its final destination without the support, encouragement and
motivation of the individuals who are related to the one who undertakes the project
work.
I take this opportunity to express my sincere thanks and gratitude to MR. UTTAM
RATHOD, General Manager Personnel and Personnel Manager MR. ANIL
DAITHANAR, for giving me this opportunity to work in this project and guiding me
through this project duration.
I would like also to thank the entire respondent for giving me there precious time and
relevant information and experience I reuired, without which this project would have
!een a different story.
Ashleen Anand
i
INDE$
S%. N& T&'() P*+, N&.
1 E$ECUTI-E SUMMERY 1
# COMPANY PRO!ILE 6
3 OBJECTI-ES O! THE STUDY 13
. INTRODUCTION TO TOPIC 1.
/ RESEARCH METHODOLOGY 30
6 DATA ANALYSIS .1
1 !INDINGS O! THE STUDY .9
0 SUGGESTIONS AND CONCLUSION /1
9 LIMITATIONS /.
10 BIBLOGRAPHY //
CHAPTER 1: E$ECUTI-E SUMMERY
"he project was carried out at #P$%& India Pvt. 'td, Mum!ai. "he title of this project
is "he &tudy of &alary and (age Administration. "he o!jective of the study is to
analy)e the &alary Administration in #P$%& India Pvt. 'td.
"he study was conducted to know the structure and salary provided !y the $ompany
to its employees. In this project, I studied a!out the present salary compensation of
#P$%& along with the evaluation of the incentives, !onus, and allowances given to
the employees.
I also studied the execution of Provident *und, Gratuity, and #ncashment of leave for
the final payment of the employee when he+ she leave the company. ,uring the course
of project, I got the clear idea a!out the salary structure and a!out the overall
functioning of the organi)ation.
I23%&45)3(&2:

-
"he payment of wages and salary is an in!uilt system with human force for their
activity performed. "o what extent the payment of wages . salary is reasona!le and
adeuate in consonance to the nature of the work performed, is a uestion mark.
"he reason attri!uted, is the existence of very large la!our force and availa!ility of
a!undant work force whether it is a farm sector of industrial sector. "he supply of
la!our is more then the demand and with the result there is exploitation of cheap
la!our policy. 'ater the advent of trade unionism helped to improve the working
conditions of la!our. /ntil the &econd (orld (ar, event the Government adopted a
0'AI&&#1 2 *AI3#4 policy in this regard. It was as late as in 5678, that the
industrial unrest !ecome so uncontrolla!le that a tripartite conference was convened
of 95: $entral and &tate Govt. 9;: #mployers, and 9-: #mployees, which resulted in
the industrial trade resolution. It was reali)ed that increase in production was not
possi!le without the fullest cooperation !etween management and la!our. "his led
to appointment of the fair wages committee and profit sharing !onus committee.
"hus, the lot of the worker !egan to improve of the living.
W*+,6 -6 S*7*%8:
Payment made to la!our is generally referred to as wages. Money paid periodically
to persons whose output cannot to !e easily measured, such as clerical staff as well
as supervisory and managerial staff, is referred to as salaries. &alaries are thus paid
generally on a monthly !asis and at the times the elements of incentive is introduced
in the form of commission, for e.g. paid to salesmen in addition to their salaries.
<owever, it is in area of la!our that there are several types of methods of wage
payment. &ystems of (age Payment=
7
In case of worker, the wages are depend generally on the rates of wages which may
!e !arely rate or time rate or leased on a piece rate, that is, dependent on worker>s
output. "here are also various com!inations of not only time . piece rate systems,
!ut also several premium plans adopted with a view to incorporate the incentive
element and motivate the worker. In addition, there are collective wage payments
also.
T(9, &: ;*+, P*89,23:
/nder this system, the work is paid a certain sum for a fixed period of time that is
so much per hour or per day or month. "he main advantages under this system are
the followings=
I. It is simple in calculation
II. "he worker does not rush the jo! and spoil the uality through a temptation of
earning more
"he following are however the draw!acks of the system=
I. "he worker !eing assured of a fixed payment for the time spend is not tempted
to work harder or more productivity as he is not rewarded for the extra
effort.
II. "he superior worker often tries to protect his slower colleagues !y the slacking
off himself.

III. "he superior worker is discouraged as, although he is more productive, he is
paid the same amount. <e therefore slackens> off over a period time. "he
system is satisfactory from the viewpoint of providing incentive to work
harder and more productivity
?
T<, '(,), ;*+, 6863,9:
In this system, the worker is paid a fixed rate per unit produced or jo! completed.
"he rate is normally developed on the !asis of analysis of previous performance and
esta!lishment of average performance of a particular standard of workmanship.
"he following are the advantages of "he Piece (age &ystem=
I. As the worker is paid more when he produces more, he is inclined to put forth
his !est efforts. "his results in increased productivity, which !enefits !oth
the employer and employee.
II. "he employee helps management in avoiding delays through !reakdown.
III. "he superior worker is induced to work hard as at the end of the period he
finds that his pay is large than that of la)y of worker.
I@. In his effort to produce more, the worker may disregard the spoiling of his
tools and machinery used !y him for the production.
@. It is paid merely on the !asis of the num!er of items produced without regard
to uality. "he uality of the production is likely to decline. "here is thus a
tendency to sacrifice uality in favour of uantity.
@I. "his system may result in excessive fatigue as the employee tries to work his
hardest and his maximum speed to earn as much as he can.
A
P%,9(59 B&256 M,3<&4:

As in the piece wage system, the employee is not guaranteed any minimum wage
in case the supply of la!our is a!undant, the pieceBwage rate could !e so lowered
as to lead to sweating and other evils. Cecause of this, trade unions !egan to o!ject
the pieceBwage system. "hey pressed for a guarantee of a fair minimum wage in
connection with certain trends. As a result, of this, a num!er of systems of wage
payments emerged technically known as progressive wage systems.
8
CHAPTER #: COMPANY PRO!ILE
Dame of the $ompany #P$%& India Pvt. 'td
Eear of Acuisition 566A
*actory %ffice Plot Do. # ;;B;?, MI,$, Andheri
Mum!aiB 7FFF?6+ Maharashtra.
Annual "urnover ;?F crores
Products Manufacturing of film capacitors
Plants of Manufacturing ? All over the (orld
"otal Do. of Plants in India 5
Plant <ead Mr. C. Mitra 9President:
Managing ,irector Mr. <. &. Canerjee
Personnel Manager Mr. Anil ,aithankar
"otal Do. of #mployee 5F-A
(hit $ollar ;-?
Clue $ollar ;?7
HISTORY:
#P$%& develops, manufactures and markets electronic components modules and
systems, focusing on fastBgrowing leadingBedge technology markets= in I" and
telecommunications, !ut also in automotive, industrial and consumer electronics. A
uniuely !road product portfolio and truly glo!al presence have made #P$%& a glo!al
G
market leader in products that account for AF percent of our sales. A further -F percent
is generated !y products in which we are the num!er one in #urope.
#P$%& was floated simultaneously on the *rankfurt and Dew Eork &tock #xchanges
on %cto!er 5?, 5666. "he listed company emerged from &iemens Matsushita
$omponents, a joint venture founded in 56G6 !y &iemens and Matsushita. Cecause of
the low trading volume, #P$%& has decided to delist and to deregister from the Dew
Eork &tock #xchange in Dovem!er ;FF8. &ince March ;FF-, #P$%& has !een one of
the largest companies in the "ec,AH index of German technology stocks.
EPCOS
ELECTRONIC PARTS AND COMPONENTS
CORPORATE CHARTER
6
1. -(6(&2 : "he aim of #P$%& India Pvt. 'td is to make the name #P$%&
synonymous with excellence in electronic components to customers, employees and
investors alike.
#. B56(2,66 : #P$%& develops, manufactures and markets electronic components
and modules. "hese products process electronic signals, control power supplies and
protect electronic circuitry.
3. G&*76 : "he $ompany wants to generate lasting profits and constantly increase
shareholder value. It wants to !e a leader in every market that we serve. "heir success
is !ased on strict customer orientation, comprehensive and outstanding innovative
strength.
.. C563&9,% O%(,23*3(&2 : Providing products and services that make their
customers more competitive is their top priority. "he personal commitment of every
#P$%& employee makes a vital contri!ution to customer satisfaction.
/. C&63 *24 P%&),66 C&9',3,2), : "hey are continuously improving their work
processes and working hard to keep cutting our cost while increasing their speed and
relia!ility.
5F
6. I22&=*3(=, S3%,2+3< : "hey create innovative products that provide new solutions
for their customers and help to strengthen existing or esta!lish new !usiness
relationship. Innovation is the life!lood of their company.
1. I2=,63&% O%(,23*3(&2 : #P$%& shareholders provide the capital for and are the
owners of their company. "hey do their utmost to maintain and increase shareholder
value.
0. E9'7&8,, : "heir employees are their most precious assets. "heir resourcefulness,
competence, motivation and drive are essential to their company>s success. "hey are
committed to a corporate culture that promotes creativity, teamwork and enterprise.
EPCOS: A company that opens up new prospects to customers, investors and
employees.
>UALITY POLICY
It is their endeavour to make the name #P$%& synonymous with world leadership in
passive components !y opening up new prospects to customers, investors and
55
employees through customer orientation, innovation cost consciousness and continual
improvement in all their !usiness processes.
>UALITY OBJECTI-ES
C563&9,% O%(,23*3(&2: Inowing their customers> needs, reuirements and
expectations and giving them outstanding prospects and services.
I22&=*3(&2: &haping constantly their innovations for the !enefits of their customers !y
giving their employees the freedom to unfold their creativity.
C&63 C&26)(&562,66: %pening to new approaches and constantly cutting their cost.
C&23(25*7 (9'%&=,9,23: Institutionali)e the approach in all functions !y updating
their uality management system.
A!ove o!jectives are uantified !y individual functions and measured and reviewed to
align with uality policy.
PRODUCT PORT!OLIO:
#P$%& is mainly engaged with manufacturing of film capacitors.
*ollowing types of film capacitors are manufactured in Dashik Plant=B
,$ $apacitors
5;
A$ $apacitors
Power *actor $orrections $apacitors 9P*$ Gas *ailed: MII.
Power *actor $orrection 3esign *iled 9P*$:.
MARET POSION
In the field of electronic components and modules #P$%& regard itself as num!er ;
world wide and num!er 5 in #urope.
EPCOS INDIA P-T LTD
#P$%& has two manufacturing facilities in IndiaB
5: Mum!ai 9Maharashtra: founded in 566A
;: Ialyani 9Iolkata (.C.:
ORGANIZATIONAL CHART
PERSONNEL
MADAG#M#D" ,I3#$"%3
5-
57

G#D#3A' MADAG#3
MADAG#3
&#DI%3
#H#$/"I@#
MADAG#M#D"
&#$3#"A3E
#H#$/"I@# %**I$#3& A&&I&"AD" %**I$#3
CHAPTER 3: OBJECTI-ES O! THE STUDY
5. "o study the $ompensation &tructure and administration in #P$%&.
;. "o know the satisfaction level of the executives and the workers regarding the
facilities and allowances given !y the #P$%&.
-. "o know the satisfaction level of the salary distri!ution process carried out in
#P$%&.
5?
CHAPTER .: INTRODUCTION TO THE TOPIC
DE!INITION O! COMPENSATION
According to 3ynes J56G8K, compensation is particularly important as a recruitment
tool !ecause
5. It is vehicle for satisfying a wide array of human needs,
;. &alary offers are expressed in clear and compara!le terms
-. &tating salaries have for future salary progressive, and,
7. Pay system communicate so much a!out an organi)ation>s philosophy, values,
and practices.
OBJECTI-ES O! COMPENSATION:
"he o!jectives of any payment systems are numerous and might include the
following=
5. "o ena!le the employees to earn a good and reasona!le salary or wageL
;. "o pay euita!le sums to different individuals, avoiding anomaliesL
-. "o reward and encourage high uality work and outputL
7. "o encourage employees to develop !etter methods of working and their
acceptanceL
?. "o discourage wastage of materials or euipmentL
A. "o encourage employees to use their initiative and discretionL
8. "o discourage overtime working unless it is very essentialL
G. "o raise morale and increases efficiency of the staff and finally keeping
them contended.
5A
TYPES O! COMPENSATION:
$ompensation provided to employees can direct in the form of monetary !enefits
and+or indirect in the form of nonBmonetary !enefits known as perks, time off, etc.
$ompensation does not include only salary !ut it is the sum total of all rewards and
allowances provided to the employees in return for their services. If the
compensation offered is effectively managed, it contri!utes to high organi)ational
productivity.
5. ,irect $ompensation
;. Indirect $ompensation
58
COMPENSATION MANAGEMENT
DIRECT COMPENSATION INDIRECT COMPENSATION












5G
&alary Casic
<ouse 3ent
Allowance
Medical
3eim!ursement
$onveyance
'eave "ravel
Allowance
Conus
&pecial
Allowance
%vertime (age
3etirals Cenefits
'eave Policy
<ospitali)ation
Insurance
*lexi!le "imings
IMPORTANCE O! COMPENSATION:
$ompensation and 3eward system plays vital role in a !usiness organi)ation. &ince,
among four Ms, i.e. Men, Material, Machine and Money, Men has !een most
important factor, it is impossi!le to imagine a !usiness process without Men. #very
factor contri!utes to the process of production+!usiness. It expects return from the
!usiness process such as rent is the return expected !y the landlord, capitalist
expects interest and organi)er i.e. entrepreneur expects profits. &imilarly the la!our
expects wages from the process.
'a!our plays vital role in !ringing a!out the process of production+!usiness in
motion. "he other factors !eing human, has expectations, emotions, am!itions and
egos.
'a!our therefore expects to have fair share in the !usiness+production process.
"herefore a fair compensation system is a must for every !usiness organi)ation. "he
fair compensation system will help in the following=
An ideal compensation system will have positive impact on the efficiency and
results produced !y employees. It will encourage the employees to perform !etter
and achieve the standards fixed.
It will enhance the process of jo! evaluation. It will also help in setting up an ideal
jo! evaluation and the set standards would !e more realistic and achieva!le.
&uch a system should !e well defined and uniform. It will !e apply to all the
levels of the organi)ation as a general system.
56
"he system should !e simple and flexi!le so that every employee would !e a!le to
compute his own compensation receiva!le.
It should !e easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, !eing
just and fair would provide satisfaction to the workers.
&uch system would help management in complying with the various la!our acts.
&uch system should also solve disputes !etween the employee union and
management.
"he system should follow the management principle of eual pay.
It should motivate and encouragement those who perform !etter and should
provide opportunities for those who wish to excel.
&ound $ompensation+3eward &ystem !rings peace in the relationship of employer
and employees.
It aims at creating a healthy competition among them and encourages employees
to work hard and efficiently.
"he system provides growth and advancement opportunities to the deserving
employees.
"he perfect compensation system provides platform for happy and satisfied
workforce. "his minimi)es the la!our turnover. "he organi)ation enjoys the
sta!ility.
;F
"he organi)ation is a!le to retain the !est talent !y providing them adeuate
compensation there!y stopping them from switching over to another jo!.
"he !usiness organi)ation can think of expansion and growth if it has the support
of skillful, talented and happy workforce.
"he sound compensation system is hallmark of organi)ation>s success and
prosperity. "he success and sta!ility of organi)ation is measured with payBpackage
it provides to its employees.
;5
INTRODUCTION TO SALARY ADMINISTRATION
W<*3 (6 S*7*%8?
"he 3oman word salarium linked employment, salt and soldiers, accepting
salt from a person was synonymous with drawing sustenance, taking pay, or !eing
in that personMs service. &oldiers were known to have !een paid, and maintain
instead that the salarium was an allowance for the purchase of salt, at that time salt
production was strictly controlled !y the monarchy or ruling elite. "oday, the idea
of a salary continues to evolve as part of a system of all the com!ined rewards that
employers offer to employees. &alary 9also now known as fixed pay: is coming to
!e seen as part of a Ntotal rewardsN system which includes varia!le pay 9such as
!onusesO incentive pay, and commissions:, !enefits and peruisites 9or perks:, and
various other tools which help employers link rewards to an employeeMs measured
performance. A salary is a form of periodic payment from an employer to an
employee, which is specified in an employment contract.
*rom the point of view of running a !usiness, salary can also !e viewed as the cost
of acuiring human resources for running operations, and is then termed personnel
expense or salary expense. In accounting, salaries are recorded in payroll accounts.
&alary is compensation to an employee for services rendered on a weekly, monthly
or annual !asis. &alary is usually associated with office employees, supervisors,
managers and professional and technical staff. In any organi)ation, salaries and
wages constitute a significant portion of the cost of operation of the !usiness.
;;
D(::,%,2), @,3;,,2 S*7*%8A W*+, *24 C&9',26*3(&2:
&alary refers to the monetary payment on a monthly or annual !asis.
(ages are the remuneration paid !y the employer for the service of a worker who is
engaged !y the hour, days, week or fortnight. (ages are payments to hourlyBrated
production and maintenance employee.
$ompensation refers to all forms of financial returns, tangi!le services and !enefits
employees receive as a part of an employment relationship. $ompensation may !e
received directly in the form of cash 9wage, !onus, incentives: or indirectly through
services and !enefits 9pensions, health insurance, vacations:.
;-
W<*3 (6 S*7*%8 A49(2(63%*3(&2?
&alary administration refers to the esta!lishment and implementation of sound
policies and practices of employees> compensation. &alaries represent a significant
portion of the total costs in most of the organi)ations and so it reuires sound
administration. "he control of salary level is of paramount importance even though
the amount of control which can !e exerted may vary among organi)ations and
within an organi)ation.
Pay can influence employees> work !ehaviours and attitudes. It !ecomes crucial for
managers to ensure that pay systems are designed and administered in fair and
euita!le manner. "he salary administration is thus concerned with the monetary or
financial aspects of needs, motivation rewards. "he
responsi!ility for salary administration usually lies with the top management.
;7
O@B,)3(=,6 &: S*7*%8 A49(2(63%*3(&2
5. $ontrol of cost
;. #sta!lishment of fair and euita!le structure of remuneration
-. /tili)ation of wages and salaries as an incentive to greater employee
productivity
7. Maintenance of a satisfactory pu!lic image
?. ,etermination of the system of jo! description and jo! evaluation
A. ,ecision of what and how people will !e paid
8. $hecking all activities of the salary administration group
G. "o recommend changes in the salary policy and specific raises for executives
at various levels
6. "o review salary scheme
5F. "o attract and encourage staff to make full use of their a!ilities and develop
their potential.
;?
SALARY AND WAGE ADMINISTRATION PROCESS IN EPCOS

#.1 I23%&45)3(&2: -
&alary is a form of Periodic Payment from an employer to an employee which is
specified in an employment contract. It refers to the employee compensation policy.

#.# O@B,)3(=,:-
"o define the procedure for Gross Pay and deduction calculation
"o ensure the correctness of salary calculation and create General 'edger.
;.- PROCESS :-
#.3.1 E9'7&8,, M*63,% D*3* E23%8 (2 PAMS :-
Personnel %fficer enters #mployee Master ,ata in PAM&. "he 3eference
,ocuments are Appointment 'etter and P#3+F5 form which the employee fills
when he joins the organisation. "he 3elevant *ields for PAM& entry are as follows=
Personal ,etails
Cooking ,etails
Po! ,etails
&alary ,etails
Accommodation ,etails
*amily ,etails
Qualification ,etails
%ther ,etails
;A
#.3.# A)3(=(38 I2'536:
Personnel #xecutive passes initial appointment Activity for new entrants. "his
activity is essential to regularise the employees> details in the system. "his will ensure
to give salary effect from the date of joining of the new employee. "he Path to enter
this activity is=B

PAM& Master Maintenance #mployeeActivity Input %ther Activity
Input 9select from the drop down list availa!le:
"he reference document for a!ove activity is appointment letter and P#3+F5. "his
ensures that the employee is in payroll system.
&ystems &upport *acility is availa!le in PAM& to maintain Allowances and "a!les
various grade &tructures.
;8
#.3.3 U'7&*4(2+ &: T%*26*)3(&26:
"he "ransactions which are uploaded are as follows=
,etails of A!senteeism, particularly unpaid leaves are counted.
%vertime ,etails
&aturday (orking. &aturday working allowance is ?FR of Casic S@,A S Adhoc
Casic:
Attendance Conus ,etails
Production Incentive ,etails
3eversals to deduct the paid for payment on a!sence
Miscellaneous 3ecoveries= - /nion 3ecovery, Mediclaim payment 3ecovery,
,eath 3elief fund and other deductions.
Activity inputs= B "his includes Pro!ation activity, confirmation activityL
separation activity to !e entered in system as per monthly transaction data.
#.3.. -,%(:()*3(&2 :
Personnel #xecutive verifies all input data !efore salary processing.

#.3./ S*7*%8 P%&),66(2+: -
Personnel #xecutive processes the salary. ,uring salary processing PAM&
calculates standard and non standard salary of active employees !ased on payment
deduction "a!les in system support facility and varia!le inputs entered. After
verification further corrections are made, if necessary.
;G
;.-.A C<,)C L(63:-
After salary processing is over for all the employees, Personnel #xecutive checks
the processed data thru salary uery screen as per inputs given. In case of
correction, Personnel #xecutive restores the specific employee details and does
necessary corrections and reprocesses the same.
;.-.8 C%,*3(&2 &: G,2,%*7 L,4+,% *24 S*7*%8 S599*%8 : -
Personnel #xecutive processes G' and then after prepares the salary summary and
General 'edger 3eport. Personnel #xecutive verifies the General 'edger. Previous
months and current months> salary is compared to ensure correctness. "he de!it and
credit amounts shown at the end of G' report is checked and ensured that the de!it
and credit amounts are same and there is no variance in General report.
;.-.G G%&66 P*8 *24 D,45)3(&2 C*7)57*3(&2: -
In salary summary, Payment and deduction details with Det &alary must !e
checked. Also ensure that the Cank &alary, $ash &alary and cheue Payments are
considered while calculating the salary summary.
;6
;.-.6 G,2,%*3(&2 &: B*2C A4=(6,:-
Personnel #xecutive prepares Cank Advise. <e then sends this Cank advise to
Accounts ,epartment to release the salary $heues. "he Personnel #xecutive
checks and verifies the !ank advise and salary summary !efore sending it to the
Accounts ,epartment.
;.-.5F G,2,%*3(&2 &: C*6< N&3, : -
Personnel %fficer prepares $ash &alary &tatement. $ash salary details are then sent
to Accounts ,epartment for necessary $ash Provisions. "he $ash &alary is
dis!ursed !y the Personnel ,epartment.
After receiving cheues from accounts department, personnel department prepares
*orwarding 'etter and deposits cheues, !ank 'ist to respective !ank to credit the
salary of every employee as per the list provided !y the Personnel %fficer.
;.-.55 A53<&%(6*3(&2 &: S*7*%8 P*89,23 A4=(6,:-
"he authorisation of salary payment Advise is done !y the Personnel Manager.
-F
#.3.1# T%*26:,% &: GL !(7, 3& ! " A D,'*%39,23:-
"he General 'edger prepared !y the Personnel #xecutive, is then transferred to
finance and accounts ,epartment.
#.3.13 U'7&*4(2+ G,2,%*7 L,4+,% !(7, (2 SAP: -
Personnel %fficer generates the &AP compati!le General 'edger 3eport and sends
to accounts ,epartment for necessary Posting in &AP.
#.3.1. S*7*%8 D(63%(@53(&2 :-

Accounts ,epartment verifies and sends the cheues to the respective Cank of the
#mployee, which is then distri!uted to their respective accounts. "his is salary
distri!ution through Cank. If the employee does not hold any !ank account, then his
salary is encashed !y Personnel %fficer and distri!utes to them.
-5
SALARY AND WAGES ADMINISTRATION STRUCTURE IN EPCOS
&alary and wages administration structure of the #P$%& India Pvt. 'td. mainly
depends upon,
5. $ategory
;. Grades
1. CATEGORY:
$ategory is mainly divided into four types,
Management
&taff
(orkmen
"rainees
I. M*2*+,9,23:
Management people are the professionals engaged for supervisory work and
commercial executives work of the company. "hese are !asically %fficers,
#xecutives, ,eputy Manager, &enior Manager, President and Managing ,irector.
"his Management $ategory is classified on the !asis of Grades, starting from M$5
to M$6.
-;
II. S3*:::
"he &taff people are the clerical personnel working in commercial functions, stores.
"hese include Assistance, senior assistant etc. this category is classified into two
Grades=B
%#5
%#;
III. W&%C9,2:
Average age of the workmen is -; years. "hese are the operating hands on working
on shop floor for manufacturing activities of the company. (orkmen are covered
under la!our laws. "here are;?7 workers, the ualifications of these workers are I"I
9Industrial "raining Institute: and D$"@" 9Dational $ouncil for "echnical
@ocational "raining:. All the engaged workmen are recruited after completing one
year training with the $ompany.
(orkers are mem!ers of Dashik (orkers /nion, registered under the "rade /nion
Act 56;A and is representing the permanent monthly rated workmen in Grade &, &F
and &5, in the factory of the company. A settlement dated ;A
th
%cto!er ;FF8 was in
existence !etween the parties, i.e. Dashik (orkers /nion and #P$%& India Pvt.
'td.
It is agreed that the total amount of 3s. -5FF+B 93upees "hree "housand %ne
<undred only: over the operative period of this settlement as follows=
--
Period
3ise
Given per
Month
"herein
Casic+
Adhoc
Casic per
Month
"herein
Allowances
per Month
"otal per
Month
5.7.;FF8 to -5.-.;FFG 3s.;7FF+B 3s.5;FF+B 3s5;FF+B 3s.;7FF+B
5.7.;FFG to -5.-.;FF6 3s.-?F+B 3s.58?+B 3s.58?+B 3s.-?F+B
5.7.;FF6 to -5.-.;F5F 3s.-?F+B 3s.58?+B 3s.58?+B 3s.-?F+B
It is agreed !etween the parties that the uantum of !enefits to !e distri!uted over
various heads for a period of three years commencing from 5
st
April ;FF8 and
ending on -5
st
March ;F5F.
I-. T%*(2,,:
"rainee is the fresher student coming with the technical stroke commercial
!ackground. "hese people are engaged to gain hands of working experience. "he
company has full fledged training scheme for all these people. "he company
offers systematic training plan for all these trainees. "he $ompany recruits
different types of trainees like "echnical "rainees, Graduate $ommercial
"rainees, Management "rainees, Graduate #ngineer "rainees, ,iploma #ngineer
"rainees, etc. "he company offers training to these fresh graduates for the
duration of one year. "he company offers stipend and learning allowances to all
engaged trainees. "o meet with the needs of educational material and facilities, the
company also offers statutory !enefits like Provident *und and #&I$ to the
trainees. After all successful training period, the company offers employment
opportunities are depend on all availa!le vacancies.
-7
3. GRADES:
Grades are distri!uted to each employee on the !asis of category.
Management
&taff
(orker
"rainees
I. MANAGEMENT :
Grade M$5, M$; and M$- B %fficers and #xecutive, &enior #xecutives.
Grade M$7, M$? and M$A B ,eputy Manager, Manager to &enior Manager
Grade M$8, M$G and M$6 B Gm, &enior Gm, President
Grade ,3 2 Managing ,irector
II. STA!! :
Grade %#5 B Assistant
Grade %#; 2 &enior Assistant
-?
III. WORER :
Grade & 2 &emiskilled (orkers
Grade &F 2 &killed (orkers
Grade &5 2 &enior operator or Punior #ngineer
I-. TRAINEES :
"echnical "rainees 2 I"I
Graduate $ommercial "rainees 2 Any Graduates
Management "rainees 2 MCA, MPM
Graduate #ngineers "rainees 2 C#
,iploma #ngineers "rainees 2 ,iploma #ngineers
SALARY ALLOWANCES GI-EN TO THE EMPLOYEES
I. MANAGEMENT AND STA!!:
A. PER MONTH:
Casic
<ouse 3ent Allowance
Medical 3eim!ursement
&upplementary allowance
-A
B. ANNUAL:
'eave "ravel Allowance 9'"A: 2 Annual Payment as per Grade
Conus 2 %nly for eligi!le employees, those having !asic S ,A less than 3s.
5F,FFF
II. WORMEN:
A. PER MONTH:
Casic
@aria!le ,earness Allowance 9@,A:
<ouse 3ent Allowance 9<3A:
$onveyance Allowance
Dews Paper Allowance
(ashing Allowance
#ducation Allowance
Adhoc Casic
B. ANNUAL:
Conus
#xgratia
-8
III. TRAINEES:
AD ANNUAL:
&tipend
'earning Allowance
!ACILITIES PRO-IDED TO THE EMPLOYEE:
1. Mediclaim facility for spouse and parents 9*or &taff, Management, (orkmen:
#. GetBtogether 2 twice in a year
Get together with *amily
Get together without family
3. &hoes, Aprons
.. &weets distri!ution for each employee on ,asara and ,iwali
/. ,eath relief scheme
6. &uperannuation &cheme 2 %nly for Management.
-G
STATUTARY RE>UIREMENT
Do employer is allowed to pay any employee Tthe compensation>, which is less than the
prevailing rate prescri!ed under the TMinimum (ages Act 567G>. $ompensation to the
,irectors of Pu!lic 'td. $ompanies should !e paid according to the provisions of the
$ompanies Act 56?A. Apart from the legislations, following important legal enactment>s
determines the amount of compensations=
"he Minimum (ages Act, 567G
"he #mployee &tate Insurance Act, 567G
"he Payment of Gratuity Act, 568;
"he #mployee Provident *und And Miscellaneous Provisions Act, 56?;
"he Payment %f (ages Act,56-A
"he *actories Act, 567G
"he Payment %f Conus Act, 56A?
"he *actories Act, 567G stipulates the amount of compensation to !e paid in respect of
overtime work.
-6
CHAPTER /: RESEARCH METHODOLOGY
I23%&45)3(&2:
3esearch is an art of scientific investigation through search of new facts in any !ranch
of knowledge. It is movement from unknown to known. "he study of research
methodology gives the student the necessary training in gathering materials reuired,
and also training in techniue for the collection of data appropriate to particular
pro!lem. It helps in the use of statistics, uestionnaire and controlled experimentation
and in recording evidences, sorting it out and interpreting it. Inowledge of research
methodology is helpful in various fields. 3esearch methodology plays key role in
project work. It consists of series of actions or steps necessary to effectively carry out
research and the desired seuencing of these steps.
Casic features of a research process are=
3esearch always starts with a uestion or a pro!lem.
Its purpose is to find answers to uestions through the application of scientific
method.
It is a systematic and intensive study directed towards a more complete
knowledge of the su!ject studied.
7F
M,3<&46 &: D*3* C&77,)3(&2
,ata collection is an ela!orate process in which the researcher makes a planned search
for all relevant data and is the foundation of all researches. It is the raw material with
which a researcher functions. "he task of data collection !egins after a research
pro!lem has !een defined and research plan is chalked out. (hile deciding a!out the
method of data collection to !e used for the study the researcher should keep in mind
two types of data vi)., primary data and secondary data.
S&5%),6 &: D*3*
A. S,)&24*%8 4*3*:
&econdary data is the data already collected !y others for purposes other than solution
of the pro!lem at hand. In case of &econdary data the nature of data collection work is
merely that of compilation. &econdary data has several supplementary uses.
1. I23,%2*7 6&5%),6:
$ompany 3ecords.
&ervice 3eports.
Annual 3eport.
$ompany Crochure.
$ompany 'i!rary.
75
#. EE3,%2*7 6&5%),6
(e! pages of organi)ations and journals.
3eference Cooks.
Maga)ines.
Dewspapers.
B. P%(9*%8 4*3*:
"he data that is !eing collected for the first time or to particularly fulfil the o!jectives
of the project are known as primary data. In my study work, stratified simple random
sampling was the method of ,ata $ollection.
D*3* E=*75*3(&2
All the data and information collected from the secondary sources and company
officials was filtered . only relevant data is introduced in the report which helped in
achieving o!jective of the project. "his relevant data is finally evaluated to make the
final report and to draw the conclusion
7;
CHAPTER 6: DATA ANALYSIS
"he data used for analysis is secondary data through internal sources.
A survey was carried out within the executives and workers of the company itself to
analyse the data.
&ample si)es of -F for each were taken to carry out the survey and following
uestionnaire were provided for the survey.
7-
!OR E$ECUTI-ES
&r.
Do.
Questions
asked
Dot
&atisfied
Dot Much
&atisfied
"o &ome
#xtent
&atisfied
Quite
&atisfied
*ully
&atisfied
5 (hether the executives
were satisfied with the
salary distri!ution process
adopted !y #P$%&O
- B B

B
; (hether the executives
were satisfied with the
allowances given !y
#P$%&O
- -

- -
- (hether the executives
were satisfied with the
facilities given !y #P$%&O
- B B

B
!OR WORERS
7 (hether the workers were
satisfied with the salary
distri!ution process
adopted !y #P$%&O
B B

B B
? (hether the workers were
satisfied with the
allowances given !y
#P$%&O
B B

B B
A (hether the workers were
satisfied with the facilities
given !y #P$%&O
B B

B B
77
I. (hether the executives were satisfied with the salary distri!ution process
adopted in #P$%&O
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
%ptions a ! c d e "otal
3esponse F - A 5? A -F
Percentage F 5F ;F ?F ;F 5FF
0
10
20
30
40
50
60
a b c d e
3esponse
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2= B Most of the executives were uite satisfied with the salary
distri!ution process adopted !y #P$%&.
II. (hether the workers were satisfied with the salary distri!ution process
adopted in #P$%&O
7?
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
%ptions a ! c d e "otal
3esponse F - 5? A A -F
Percentage F 5F ?F ;F ;F 5FF
0
10
20
30
40
50
60
a b c d e
3esponse
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2= B Most of the workers were satisfied to some extent with the
salary distri!ution process adopted !y #P$%&.
III. (hether the executives were satisfied with the allowances given !y
#P$%&O
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
7A
%ptions a ! c d e "otal
3esponse F - 5; 6 A -F
Percentage F 5F 7F -F ;F 5FF
0
10
20
30
40
50
a b c d e
Response
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2= B Most of the executives were satisfied to some extent with
the allowances given !y #P$%&.
I@. (hether the workers were satisfied with the allowances given !y #P$%&O
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
%ptions a ! c d e "otal
3esponse F - 5G 6 F -F
78
Percentage F 5F 7F -F F 5FF
0
20
40
60
80
a b c d e
3esponse
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2= B Most of the workers were satisfied to some extent with the
allowances given !y #P$%&.
@. (hether the executives were satisfied with the facilities given !y #P$%&O
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
%ptions a ! c d e "otal
3esponse F - 6 5G F -F
Percentage F 5F -F AF F 5FF
7G
0
10
20
30
40
50
60
70
a b c d e
3esponse
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2= B Most of the executives were uite satisfied with the
facilities given !y #P$%&.
@I. (hether the workers were satisfied with the facilities given !y #P$%&O
a: Dot satisfied !: Dot much satisfied c: "o some extent satisfied d: Quite
satisfied e: *ully satisfied
%ptions a ! c d e "otal
3esponse F - 5G 6 F -F
Percentage F 5F AF -F F 5FF
76
0
10
20
30
40
50
60
70
a b c d e
3esponse
P
e
r
c
e
n
t
a
g
e
3esponse Percentage
I23,%'%,3*3(&2: - "o the some extent workers are satisfied with facilities given !y
#P$%&.
CHAPTER 1: !INDINGS O! STUDY
According to this survey, I could conclude following= B
5. $ompensation has major impact coming out of age and experience i.e. more age,
more experience, more $"$. "herefore, more the length if the service, higher the
wages.
?F
;. As the industry goes num!er of settlements, it reaches to saturation point, then the
increase in the direct wages is minimum.
-. As it matures to saturation point, more !enefits come out of facilities and !enefits
rather than rise in direct wages.
7. Any entrepreneur !usiness organi)ation is run to earn profits and ultimately to make
money. In a typical manufacturing set up the !uyer i.e. customer decides the product
price. A product consists of following cost put on it.
3aw material cost
'a!our cost
%verheads
&cheduled profit out of that product
In the a!ove cost, the end customer has always expectation of lowering it or to
maintain at same level. <owever, out of a!ove item, raw material cost and la!our
cast will have always incremental effect. &o to have !etter profit out of
manufacturing, you need to have control over overheads as well as la!our cost.
?5
CHAPTER 0: SUGGESTIONS " CONCLUSION
SUGGESTIONS: -
"ake care of changes in I" rules
$ompany does compensation restructuring !ased on change in income tax rules.
?;
According to survey, to maintain the morale of the employees, management should keep
their compensation plan competitive with similar industry.
T%*26'&%3 !*)(7(38:-
"he company may provide transport facility rather than giving $onveyance allowance.
%n giving an informal talk with employee of the company, it was found that the
employees are more interest in having pickB up and drop facility.
!,63(=*7 A4=*2),:-
$ompany may provide a festival advance facility which will prove more !eneficial for
the employees and which will help them in fulfilling their needs arising during the course
of any festive occasion.
S*7*%8 S5%=,8:-
$ompany should conduct salary survey to find out and study recent patterns in similar
industry. Cased on the finding of such surveys they should restructure the compensation.
!7,E(@7, T& S5(3 A44,4 L(*@(7(3(,6:-
?-
As employees grow in the organi)ation, simultaneously his family lia!ilities also grow.
"o accommodate such lia!ilities like children education, dependent family mem!ers>
marriage, and medical expenses this should !e considered in deriving compensation
package.
C&23(25&56 T%*(2(2+ A24 R,;*%46:-
In the competitive era, to keep feet one need to continuously upgrade him !y way of
knowledge !ase and develop things which may utili)e for organi)ational development.
"hus, there has to !e proper consideration for rewarding such things.
CONCLUSION: -
*rom this project report, I could conclude that compensation management plays integral
role in o!taining organi)ational goals.
5. Any compensation program must have the strong linkage to the profita!ility at the
production level and !usiness level.
?7
;. "he program should ensure that it esta!lishes accounta!ility, ownership and
service orientation at all level.
-. "he key to motive employees is compensation package i.e. direct wages are low
!ut other !enefits are more which are !ased on productivity. "hey vary according
to productivity.
7. $ompensation helps to retain competent employees in the organi)ation.
?. Attractive compensation package also enhance the competitiveness of the
company.
CHAPTER 9: LIMITATIONS
5. "he study was restricted to main !ranch of #P$%& India Pvt. 'td.
??
;. ,ue to company>s norms and regulations some of the official and financial data
which was important for my project could not !e availa!le.
-. Many times the officials were so !usy that they could not answer the ueries
related to the topic.
CHAPTER 10: BIBLOGRAPHY
BOOS:
?A
P. &u!!a 3ao 9;FF8:L #ssentials of <uman 3esource Management . Industrial
3elationsL <imalaya Pu!lication <ouseL Mum!aiL pp 7FFB7F?.
$. C. Mamoria, &. @. Gankar 9;FF8: Personnel ManagementL <imalaya Pu!lishing
<ouseL Dew ,elhiL pp 7-;B7?G
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?8