Salary Calculation for a Position
Hello, I am Ashutosh, and I am from Guwahati, Assam. I wish to know how a salary is calculated for a position. Is there any specific formula, or is it based on minimum wages or industry trends? How are the slabs and grades created? Can anyone guide me?
Thanks,
Ashutosh Sharma
From India
Acknowledge(0)
Amend(0)
Hello, I am Ashutosh, and I am from Guwahati, Assam. I wish to know how a salary is calculated for a position. Is there any specific formula, or is it based on minimum wages or industry trends? How are the slabs and grades created? Can anyone guide me?
Thanks,
Ashutosh Sharma
From India
Acknowledge(0)Amend(0)
Dear Colleague,
As rightly guided by our colleague, Mr. Umakanthan, this is a subject that needs to be studied deeply for a full understanding. Sharing a few thoughts:
Workmen Wages:
Regarding the workers who mostly perform manual, skilled, semi-skilled, unskilled, and technical jobs, and are employed in "Scheduled Employment" (a list of industries specified in the notifications) under the Minimum Wages Act of 1948, their wages are determined by the minimum wages notifications released from time to time. There is another concept called National Floor Wage (NFW), which is the bare minimum to be paid, with all minimum wages generally fixed above the NFW levels.
In the case of large/medium-sized industries where trade unions are present, there will be "settlements" between employers and employees that determine the wages and other benefits. In some cases, it is based on "awards" passed by labor courts or industrial tribunals, which are to be followed.
For executives and managerial employees, the compensation and benefits are purely based on the job role, job analysis, the value of the job and skills required, demand in the market, and market surveys of compensation and benefits to retain employees with effective components of compensation and benefits. Many consulting firms work on this to provide data analysis on aspects such as:
- Job Band
- Job Value
- Levels 1, 2, 3, 4, 5
- Pay structure for each band and layer or level, etc.
There is a lot of information available on websites that you can explore. There are also excellent books on "Wage and Salary Administration" that provide a comprehensive understanding of the subject and are worth looking into for complete knowledge.
All the best,
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
Acknowledge(2)
Amend(0)
321As rightly guided by our colleague, Mr. Umakanthan, this is a subject that needs to be studied deeply for a full understanding. Sharing a few thoughts:
Workmen Wages:
Regarding the workers who mostly perform manual, skilled, semi-skilled, unskilled, and technical jobs, and are employed in "Scheduled Employment" (a list of industries specified in the notifications) under the Minimum Wages Act of 1948, their wages are determined by the minimum wages notifications released from time to time. There is another concept called National Floor Wage (NFW), which is the bare minimum to be paid, with all minimum wages generally fixed above the NFW levels.
In the case of large/medium-sized industries where trade unions are present, there will be "settlements" between employers and employees that determine the wages and other benefits. In some cases, it is based on "awards" passed by labor courts or industrial tribunals, which are to be followed.
For executives and managerial employees, the compensation and benefits are purely based on the job role, job analysis, the value of the job and skills required, demand in the market, and market surveys of compensation and benefits to retain employees with effective components of compensation and benefits. Many consulting firms work on this to provide data analysis on aspects such as:
- Job Band
- Job Value
- Levels 1, 2, 3, 4, 5
- Pay structure for each band and layer or level, etc.
There is a lot of information available on websites that you can explore. There are also excellent books on "Wage and Salary Administration" that provide a comprehensive understanding of the subject and are worth looking into for complete knowledge.
All the best,
Dr. P. Sivakumar
Doctor Siva Global HR
Tamil Nadu
From India, Chennai
Acknowledge(2)Amend(0)
Remuneration Structures in Organizations
Based on the type of organization, capacity to pay, prevailing rate of remuneration in the market (similar industries), market availability of candidates, etc., the remuneration structures are framed differently by different organizations.
Minimum Wages for Workmen
For the workmen category, the basic guideline is minimum wages. However, there is no harm in paying more if the organization has the capacity to do so. In new organizations, there is no union initially, and the employees are typically divided into two categories: bargain-able staff and management staff, including supervisors.
Determining Remuneration for Management Staff
For management staff, the remuneration package may be determined based on different grades of employees and market availability. There is no specific law or rule in this regard; it is mostly driven by common sense.
Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)
Based on the type of organization, capacity to pay, prevailing rate of remuneration in the market (similar industries), market availability of candidates, etc., the remuneration structures are framed differently by different organizations.
Minimum Wages for Workmen
For the workmen category, the basic guideline is minimum wages. However, there is no harm in paying more if the organization has the capacity to do so. In new organizations, there is no union initially, and the employees are typically divided into two categories: bargain-able staff and management staff, including supervisors.
Determining Remuneration for Management Staff
For management staff, the remuneration package may be determined based on different grades of employees and market availability. There is no specific law or rule in this regard; it is mostly driven by common sense.
Regards, S K Bandyopadhyay (WB, Howrah) CEO - USD HR Solutions [Phone Number Removed For Privacy-Reasons] [Email Removed For Privacy Reasons] USD HR Solutions – To strive towards excellence with effort and integrity
From India, New Delhi
Acknowledge(0)Amend(0)CiteHR is an AI-augmented HR knowledge and collaboration platform, enabling HR professionals to solve real-world challenges, validate decisions, and stay ahead through collective intelligence and machine-enhanced guidance. Join Our Platform.
SALARY SHEET CALCULATION.xls
Salary calculation.doc