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