theoretical perspective of wage and salary administration
TRANSCRIPT
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INTRODUCTION OF THE STUDY
NEED FOR THE STUDY :
The wage and salary administration plays a vital role in Human
Resource Management. The Human Resource Management is also
plays a vital role in any organization. One of the biggest factors
affecting industrial relations is the salary or wage of an employee
receives for a fair day’s work.
It is necessary to understand clearly the implications of various
concepts and `principles that are related to the area of wage and
salary administration.
The wage and salary structure is the most important element in the
Management of the employees. It includes areas as job evaluation,
maintenance of wage structure, incentives, profit sharing,
supplementary payments and control of compensation and other
related pay items. The attention has been devoted to the study of
internal structure and Human Resource Management Policies.
Need for Sound Salary Administration:
Management has to formulate and administer the salary policies on
sound lines as:
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Most of the employees’ satisfaction and work performance are based
on pay.
Internal inequalities in pay are more serious to certain employees.
Employees compare their pay with that of others.
Employees act only to gross external inequalities.
Employee comparisons of pay are uninfluenced by levels of aspirations
and pay history.
Employees compare the pay of different employees with their skill,
knowledge, performance, etc.
Evaluating the unsatisfied wants and unreached goals of the
employees.
Finding out the dissatisfaction arising from unfulfilled needs and
unattained goals.
Adjusting the salary levels accordingly with a view to enabling the
employees to reach unreached goals and fulfill the unfulfilled needs.
OBJECTIVES OF THE STUDY
To know about the Wage and Salary administration of the CICB-
Chemicon Pvt Limited, Baikampady, Mangalore.
To know about the different types of allowances in the CICB-Chemicon
Pvt limited, Baikampady, Mangalore.
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To study about the employees’ Pay structure in the company.
To assess the employees perception about the Wage and Salary
structure of the company.
To identify problems, if any, in the Wage and Salary administration of
the company and to make suggestions.
METHODOLOGY OF THE STUDY
The information for the study has been gathered from two sources
namely
Primary data
Secondary data
Primary data:
Primary data have been collected through personal
observations, discussions and interviews with various officials
and management and from the Human Resource Department.
To evaluate the effectiveness of Wage and Salary
administrations of the company a survey was conducted on a
sample of 30 employees. For this purpose, a structured
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Questionnaire with close-ended questions was prepared.
The results were tabulated, interpreted and the findings were
drawn.
Secondary data:
Secondary data have been collected from the books, company
records, manuals and the reports provided by Human Resource
Department, websites and magazines.
FRAME WORK OF THE STUDY
The Project Work has been organized in five Chapters:
The First chapter deals with the theoretical perspective of wage and
salary administration, followed by objectives, methodology frame work
and limitations of the study.
The Second Chapter contains profile of the CICB-Chemicon Pvt Limited.
The Third Chapter contains profile of CICB-Chemicon Pvt limited,
Baikampady, Mangalore.
The Fourth Chapter deals with wage and salary administration in CICB-
Chemicon Pvt limited, Mangalore.
The Fifth and last chapter embodies findings, suggestions and
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conclusion.
LIMITATIONS OF THE STUDY
Time had been a constraint for completion of present study and
making out a detailed analysis.
The present study is limited only to M/s. CICB-Chemicon Pvt limited,
Baikampady, Mangalore.
The employees are scared to quote their name and suggestions.
The employees were not willing to give the detailed information,
because of their busy work schedule.
The study of project work was only 6 weeks. This period is not
sufficient to cover entire area.
THEORETICAL PERSPECTIVE
OF WAGE AND SALARY
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ADMINISTRATIONOne of the most important areas of Human Resources Management is
Compensation Management. The soundness of Compensation
Management depends upon the amount of Wage and Salary paid to an
Employee for a fair days work. Despite the conclusions of morale
studies wage or salary is significant to most of the employees as it
constitutes a major share of their income pay in one form or another is
certainly one of the main springs of physical needs. It provides
recognition a sense of accomplishment and determines social status.
Hence formulation and administration of sound remuneration policy to
attract and retain right personnel in right position is the prime
responsibility of any organization. Wage And salary Administration is
essentially the application of a systematic approach to the problem of
ensuring that employees are paid in a logical, equitable and fair
manner.
Wage:
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Wage and Salary are often discussed in loose sense, as they are used
interchangeably. But ILO defined the term wage as “the remuneration
paid by, the employer for the services of hourly, daily, weekly and
fortnightly employees.” It also means that remuneration paid to
production and maintenance or blue collar employees.
Salary:
The term salary is defined as “the remuneration paid to all clerical and
managerial personnel employed on monthly or annual basis.” “The
direct compensation paid to an employee compensating his services to
an organization”. Salary is also known as ‘basic pay’.
Earnings:
Earnings are the total amount of remuneration received by an
employee during a given period. These include salary (pay), dearness
allowance; house rent allowance, city compensatory allowance, other
allowances, overtime payments etc.
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Nominal wage:
It is the wage paid or received in monetary terms. It is also known as
money wage.
Real Wage:
Real wage is the amount of wage arrived after discounting Nominal
Wage by the living cost. It represents the Purchasing Power of Money
Wage.
Take Home Salary:
It is the amount of salary left to the employee after making authorized
deductions like contribution to the provident fund, life insurance
premium, income tax charges, and other charges.
Minimum Wage:
It is the amount of remuneration, which could meet the “normal needs
of the average employee regarding as a human being living in a
civilized society.”
It is defined as the amount of remuneration, “which may be sufficient
to enable a worker to live in reasonable comfort, having regard to all
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obligations to which an average worker would ordinarily be subjected
to.”
Statutory Minimum Wages:
It is the amount of remuneration fixed according to the provisions of
the Minimum Wages Act, 1948.
The Need-Based Minimum Wage:
It is the amount of remuneration fixed on the basis of norms accepted
at the 15th session of the Indian Labour Conference held at New Delhi
in July 1957. The Conference recommended that minimum wages
should ensure the minimum human needs of industrial workers. The
norms laid down by it are:
In calculating the minimum wage, the standard working class family
should be taken to comprise 3 consumption units for 1 earner, the
earnings of women, children and adolescents being disregarded.
Minimum food requirements should be calculated on the basis of a set
in takes of calories as recommended by Dr. Aykroyd for an average
Indian adult of moderate activity.
Clothing requirements should be estimated on the basis of per capita
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consumption of 18 yards per annum, which would give for the average
worker’s family of four a total of 72 yards.
In respect of housing, the rent corresponding to the minimum area
provided for under Government Industrial Housing Scheme should be
taken into consideration in fixing the minimum wage.
Fuel, lighting and other miscellaneous items of expenditure should
constitute 20 percent of total minimum wage.
The Living Wage:
According to the committee on fair wages, the living wage is the
highest amount of remuneration and naturally it would include the
amenities which a citizen living in a modern civilized society is entitled
to expect, when the economy of the country is sufficiently advanced
and the employer is able to meet the expanding aspirations of his
workers.
The Fair Wage:
Fair wages are equal to that received by workers performing work of
equal skill, difficulty or unpleasantness.
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Incentive Wage:
This is the amount of remuneration paid to a worker over and above
the normal wage as an incentive for employee’s contribution to the
increased production or saving in time or material.
Wage Rate:
It is the amount of remuneration for a unit of time excluding
incentives, overtime pay, etc.
Standard Wage Rate:
It is the amount of wage fixed for a unit of time fixed on the basis of
job evaluation standards.
Rewards:
An incentive or a reward can be any thing that attracts the workers
attention and stimulates him to work. Rewards are of two types:
Intrinsic
Satisfaction that the employees get from the job itself such as
pride in one’s work, having a feel of job accomplishment, job
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enrichment, being a member of a team.
Extrinsic
External to the job and comes from the management namely
wage / salary, fringe benefits, welfare measures, promotions,
incentives etc.
Financial Vs. Non-Financial Rewards:
Rewards are two type’s viz., financial rewards and non-financial
rewards.
Financial
Wages/Salaries, allowances, incentive payments, bonuses, profit
sharing etc.
Non-Financial
Canteen facilities, Conveyance facilities, Medical care, paid
vacations, paid sick leave etc.
Performance based Vs Membership based Rewards:
The rewards that the organization allocates are based on either
performance criteria or membership criteria.
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Performance based
Performance based rewards are exemplified by the use of
Commissions, incentive pay, piece work; pay plans, Group
bonuses etc.
Membership based
Membership rewards are allocated to all employees as they are
the employees of the organization. These include basic salary or
pay, dearness allowance based on the cost of living index, house
rent allowance, city compensatory allowance etc.
Fringe Benefits:
Fringe benefits refer to various extra benefits provided to the
employees, in addition to the compensation paid in the form of wage /
salary. These include employee benefits like
Provided fund, Gratuity, Medical care, Hospitalization, Accident relief,
Health and Group, insurance, Canteen, Perquisites:
These are allowed to the executives and to retain competent
executives.
Company car
Club membership
paid holidays
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furnished house
Stock option schemes.
Wage and Salary Objectives of Management
To establish a fair and equitable remuneration: There
should be internal and external equity in remuneration paid
to employees. Internal equity means similar pay for similar
work. External equity implies pay for a job should be equal
to pay for a similar job in other organizations.
To attract competent personnel: A sound wage and
salary administration helps to attract qualified and
hardworking people by ensuring an adequate payment for
all jobs.
To retain present employees: By paying at competitive
levels, the company can retain its personnel; it can
minimize the incidence of quitting and increase employee
loyalty.
To improve productivity: Sound wage and salary
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administration helps to improve the motivation and morale
of employees which in turn lead to higher productivity.
To control costs: Through sound wage and salary
administration labour and administrative costs can be kept
inline with the ability of the company to pay. It facilitates
administration and control of pay roll.
To improve Union management relations: Wages and
salaries based on systematic analysis of jobs and prevailing
levels are more acceptable to trade unions. Therefore,
Sound wage and salary administration simplifies collective
bargaining and negotiations over pay. It reduces grievances
arising out of wage inequities.
To improve public image of the company: Wage, Salary
administration programme also seeks to project the image
of a progressive employer and to comply with legal
requirements relating to wage and salary administration.
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Principles of Wage and Salary Administration:
There are several principles of wage and salary plans, policies and
practices. The important among them are:
Wage and salary plans and policies should be sufficiently flexible or
responsive to changes in internal and external conditions of the
organization.
Wage and salary administration plans must always be consistent with
overall organizational plans and programs.
Wage and salary administration plans and programs should be in
conformity with the social and economic objectives of the country like
attainment of equality in income distribution and controlling
inflationary trends.
Management should ensure that employees know and understand the
wage policy of the company. Workers should be associated in
formulation and implementation of wage policy.
All wage and salary decisions should be checked against the standards
set in advance in the wage policy.
Wage and salary plans should simplify and expedite other
administrative processes.
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Factors affecting wages:
1. Demand for and supply of labour: Wage or salary is the price for the
services rendered by a worker. Forces of demand and supply of labour
determine the going wage rate. When there is no dearth of labour (as
in India) wages tend to be low. On the other hand, executive salaries
have increased in India after liberalization due to rise in demand for
professionally trained managers.
2. Ability to pay: An organizational ability to pay its employees is an
important determinant of wage level. Ability to pay depends upon the
profit earning capacity of the enterprise. Multinational corporations pay
relatively higher salaries due to their higher paying capacity.
3. Labour unions: well-organized trade unions exert pressure for higher
wages and allowances. This pressure is exercised through collective
bargaining, strikes and other methods. Salary levels in commercial
banks are high due to higher bargaining power of bank unions.
4. Cost of Living: Due to inflation, the real wages decline affecting the
purchasing power of workers. Therefore a dearness allowance is given
according to the consumer price index. Labour arrangements generally
have a clause providing for automatic increase in pay as cost of living
rises.
5. Prevailing wage rates: While fixing wages, prevailing wages in the
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particular industry / region are taken into account. This is necessary to
retain and attract qualified workers.
6. Job requirements: Basic wage largely depends upon the difficulty
level and physical and mental effort required in a particular job.
7. Productivity: There is an increasing trend towards linking wage
increases to gains in productivity or performance of workers. In some
concerns annual increment in wages is based on merit. While in other
companies pay increase every year without any relation to the
performance of a worker.
8. State regulation: wage policy and law of the Govt. exercise a
significant influence on Wage levels. Government has enacted laws to
protect the interests of the working class. No organization can violate
laws relating to minimum wages, payment of bonus, dearness
allowances and other allowances, equal pay for equal work.
Wage Theories:
There are a number of theories on wages. Important among them are
discussed here under:
The Just Wage Theory: This was the first theory on wages
advocated during medieval period. The essence of this theory is
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that the worker should be paid on the level of maintaining
himself and his family.
Subsistence Theory: According to Ricardo “the laborers are paid
to enable them to subsist and perpetuate the race without
increase or diminution.”
Standard Of Living Theory: Karl Marx pointed out that the “Wage
of labour is determined by a traditional standard of living, which,
in turn, is determined by the mode of production of the country
concerned.”
The Wage Fund Theory: According to J.S Mill, the wages are
determined on the basis of the relationship between the amount
of fund allocated for the purpose of usage payment and number
of workers in a country.
Amount of fund allocated for wage payment
WAGE =
Number of workers
Residual Claimant Theory: According to Walker, the wages are
determined on the basis of the amount left after the payment of
rent, profits and interest to land, entrepreneur and capital
respectively out of the production value.
The Amount of Wages = Production – (Rent + Profits + Interest).
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Marginal Productivity Theory: According to J.B. Clark, the wages
are determined on the basis of marginal contributions of the
worker to the production. The employer stops employing further
workers where the contributions of the most recently employed
worker are equal to his wages.
The Bargaining Theory of Wages: According to this theory the
wages and other terms of employment are determined on the
basis of the relative bargaining strength of the 2 parties, viz., the
employer and the employees. Webb’s stated that, “the haggling
of the market which under a system of free competition and
individual bargaining determines the conditions of employment.
Contribution of Behavioural Scientists to the Wage Theories:
According to behavioural scientists, wages are determined on
the basis of several factors like the size, nature, prestige of the
organization, and strength of the union, social norms, Traditions,
customs, prestige of certain jobs in terms of authority,
responsibility and status, level of job satisfaction, morale, desired
lines of employee behavioral and level of performance.
Thus, the first five wage theories influenced the wage
determination until 19th century. But the influence of these
theories had been reduced to a greater extent during the 20th
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century. The bargaining theory of wages and the behavioral
theory of wages influence much the determination during the
present century. The modern and important system of salary
administration is job evaluation.
Wage Fixation institutes in India:
Collective bargaining and Adjudication
CB is procedure in which Compromise is reached through
balancing of opposed strengths. It is a means through which
employee prol-leiw, relating to various issues including wages
are settled, if these problems are settled through CB they may
be settled through voluntary arbitration or adjudication.
Wage Board:
Government of India sets up tripartite wage board on industry
wise basis to fix and revise pay. The boards are set up on ad-hoc
basis on the demand of trade unions and employees as there is
no low providing for their establishments.
A wage board consists of an impartial Chairman, two
independent members and 2 or 3 representatives of workers
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each. The recommendation of wage boards is first submitted to
the government. Government may accept, modify or reject the
recommendation.
While determining wages, wage boards take in to accounts the
following factors:
Need based minimum wages.
Industries capacity to pay.
Productivity of labor.
Prevailing rates of wages.
Various wage legislation.
Level of income and its distribution.
Place of the industry in the economy.
Needs of industry in a developing economy.
Requirements of social justice.
Need to provide incentive for improving productivity.
Pay Commission
This is another institution which fixes and revises the wages and
allowances to the employees working in the government and
government departments. Pay Commissions are separately
constituted by Central, and State Governments. Central
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Government so far has appointed five pay commissions.
The process of wage determination:
The wage determination process consists of the following steps
Job Analysis: First of all, the contest and requirements of a job
are analyzed. The data collected through job analysis is used to
prepare job description and job specification. On the basis of
these statements standards of job performance are laid down.
Job Evaluation: The relative value for every job is determined
through job evaluation. The relative job value is then converted
into money value so as to fix basic wage for the job.
Wage Survey: wage or salary surveys are conducted to find out
wage /salary levels prevailing in the region or industry for similar
jobs. Other organizational problems such as recruitment, policy,
fringe benefits, etc., are also considered.
Developed wage system: On the basis of foregoing steps an
equitable wage structure is prepared. While determining such a
structure several points need to be considered:
Legislation relating to wages.
Payments equal to more or less then prevailing wage rates.
Number and width of pay grades.
Jobs to be placed in each pay grade.
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Provision for merit increases.
Differentials between pay plans.
Wage Administration rules: Rules are required to determine the
degree to which advance will be based on length of service
rather than merit. The frequency with which pay increments will
be awarded, the rules that will govern promotions from one pay
grade to another and the way control over wage /salary costs
can be maintained. Once the rules, are framed these should be
communicated to employees.
Employee Appraisal: In order to reward men: performance is
necessary to evaluate the performance of the individual
employees. Some differentials in pay are maintained on the basis
of employee’s performance. This is necessary to provide
incentive for hard work and superior performance is evaluated
against predetermined standards of performance.
set out in the memorandum of association as under:
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? To establish factories for manufacturing of sugar
? To establish the sugar cane units properly and to increase the production of the sugar cane.
? To supply least variety of cane seeds.
? To give maximum price to suppliers of sugar cane.
? To export sugar and other products to the farmers.
? To introduce the agriculture development schemes and other subsidiary schemes for the
farmers.
? Other objectives like facilities for employees and development of area.
QUALITY POLICY
We are committed to achieve continual improvement and
Enhance satisfaction of customers through:
Manufacture and supply of consistent quality of Sugar and its by-products at an optimum cost
complying with customer requirements.
Generation of reliable power with maximum Plant Load Factor.
Extending necessary support to cane growers to optimize per acre yield that would result in
larger volumes of supply.
Continually improving the effectiveness of management systems and practices.
Compliance with applicable statutory and regulatory requirements.
Seeking participation of employees at all levels, to inculcate total quality culture.
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WELFARE FACILITIES PROVIDED BY THE COMPANY
Statutory safety facilities
Staff shoes
Uniforms
Other safety equipment.
Statutory Welfare facilities
Washing facilities
Canteen facilities
Restrooms and lunchrooms
Dispensary
Facilities for sitting
Non – Statutory Welfare facilities
School bus
Arranging Picnics
Other benefits and allowances
bonus
Gratuity
Workmen Compensation
Medical expenses for insured persons
Retaining allowances
Provident fund
TRADE UNIONS
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In the NCS sugars limited there are four unions. All unions are registered- there is no
recognition of any unions since the establishment of new plant.
Elections are also not held between the unions since a long time.
Union leaders are outside leaders only. The details of various unions are furnished below
The NCS sugar factory staff and workers union latchayya peta registered.
NO- D/11/7/90 – CITUC
The NCS sugar Karmic Sangh Union
Regn.NO.- 3/11/76 BMS
The NCS sugar workers & employee union
Regd.NO- 1558/96
Independent union
Sri Rama Sugar mills Labor Union
Regd- NO-715/47- AITUC
Awards and honors of the company:
NCS Sugars Limited is the recipient of Best Cane Development award for 2007, presented in R
& D workshop at Vijayawada by Acharya NG Ranga Agricultural University & Commissionerate
of sugar, Government of Andhra Pradesh.
2nd place in Best Cane Development Award by SISSTA-2007. This is the FIRST Sugar Factory to
have associated with 22000 farmers covering half the district of Vizianagaram.
Board of directors of the company:
Sri N. Nageasara rao Managing Director
Sri N. Murali Director
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Sri N. Srinivas Director
Sri Janaki manohar Chief executive
Organizational chart of NCS sugars limited
Departments in the NCS sugars limited
Cane department.
Process department.
Engineering department.
Purchase and stores department.
Sales department.
Co-generation department
Finance department
Personnel department.
Electronic data processing center.
Cane department:
The functions of this department are followed by under the directions of the cane manager.
The main function of this department is procuring raw material and supply to the production
department for crushing to produce sugar. In addition to this function here they give incentives
to the formers and so on.
Key functions:
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(Raw Material Supply – Fixing Incentives – Fixing Cane price – Bills Payment to farmers)
Procuring and supply of raw material:
This department will procure raw material (cane) from the farmers and supply the same to the
Process department.
Provide incentives to the farmers:
They are offering subsidiaries to the farmers in the form of fertilizers, seed cane, bank loans,
and transport facilities. They allocate 100 to 120 Lorries every year to the farmers for
transportation of sugar cane
Fixing of cane price
Central government fix the price of the sugar cane across India called as “Fair and
remunerative price” (FRP) formerly known as statutory minimum price(SMP) is rs1312 per
tonne and purchase tax rs6o, in addition to this the company paid 378rs to encourage the
farmers towards sugar cane production
Cane price paid from 2005 to 2010
Bills paid through accounting department:
This department maintains separate accounting department for the financial transactions of
sugar cane purchasing. The bills are paid to the farmers through cane accounting department
with in 10 days from the purchasing time.
Supportive/off seasonal functions:
Technology development:
Controlling methods of sugar cane diseases
Seed cane providing
Awareness programs:
Structure Of Cane Department:
Deputy manager (Area manager)
Manager (HOS)
Deputy general manager (HOD)
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Agricultural assistant
Field men
Production Department:
The production department is the key department for the organizations development if it
performs well the company will grow, if the department not performs well it may be leads to
organization wealth decrease. The entire income incurred to the organization from product
sales only. That’s why this department has such importance.
The function of this department is to produce sugar and its byproducts from the cane as well
as from raw sugar.
To operate machineries well.
Particulars of cane crushed:
Duration 2008-09 2009-10
No of Days 175 189
Cane Crushed(Tonnes) 11,96,365 12,83,994
Sugar Produced(Qts) 13,95,11s0 13,93,770
Recovery (%) 11.14 10.85
Turnover (Rs in Lakhs) 22,319 16,792
NCS SUGAR’S LIMITED TOTAL PRODUCTION
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Year Production (in quintals)
2003-2004
2004-2005
2005-2006
2006-2007
2007-2008
2008-2009
2009-2010 11,26,400
13,09,340
9,23,650
10,75,620
12,24,740
13,95,110
13,93,770
Sugar manufacturing process:
Sugar Cane
Weigh Bridges
Cane carriers
Cane cutter
Mascreation water- Shredder Mills-Bagasse to boiler as fuel (through water weighing scale)
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Raw/Juice (Mixed)
Juice Hearts
Timing –juice treatment tanks- sulphation So2 gas
Clarifies-Filter cake through rotary vaccum filter
Evaporators
Syrup-Sulphited
Vaccum pans
A-1, B-1, B-2, C Massecuites Crystallizers
Centrifugal Machines – (AH, AC, BH, CL, FM, AB, Heavy & Light Molasses)
Sugar Grader
Sugar bagging (Grade Wise)
Sugar Godowns (For storage)
Engineering department:
This is the department for maintaining all machineries, which are used in the production
process. Here the chief engineer is the head of the department and he is the responsible
person for the function in that department.
The key function of the engineering department is maintaining of machineries. The
maintaining types are
Periodic maintenance
Break down maintenance,
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General maintenance.
Checking of the machineries at time to time and observing the performance of the machinery
in the process function are also the functions of the department.
Another function of this department is managing production process.
Machinery installation.
Structure of the department:
Deputy manager (engineering)
Senior manager engineer
Chief engineer
Engineers
Work men
Purchase and stores department:
This department is managed by material manager. He is the responsible for all the functions in
the department. The main function of this department is purchasing the general items like
material oil, lubricant of nuts and bolts, electrical items basing on the requirement of general
department.
If an item required then the user department member give information to purchase
department. The enquiry will be done by the purchasing department for that item. After
enquiry the purchasing committee analyzes and decides to purchase.
When the chief executive gives orders then they go for purchasing of item required.
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The time for item required to supply that item is maximum 1 week, its called as pipe line.
The company mostly purchase items from Gujarat , Karnataka.
They prefer brand items only and go to manufacturer directly to purchase. They go to traders
for purchase in few cases.
The stores department function is to store the purchased items safely based on the item or
chemical.
clerks
Manager purchase
Manager material
Purchase and stores
Department chart:
Sales department:
Sales
The sales department is controlling by the deputy general manager (accounts). The company
goes to two types of sales as per the central government orders, those are free sales and levy
sales.
Levy sales
Free sales
Levy sales:
10% of the total production is goes to levy sale. This sugar is for the public distribution. The
price for levy sales is fixed by the central government of India.
Free sales:
90% of the total production of the sugar sold in the form of free sales. The sales of this sugar
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done according to the sales orders given by the central government.
The central government releases purchasing orders relating to quantity of sales to be sold on
the basis of total production of the sugar in the completed year.
It releases sales orders every month.
Sugar trade head is managing the total sales of sugars.
The company goes to sales through offering tenders at vizianagaram.
Most of the sugar (80%) exports to west Bengal and Calcutta.
Functions of this department:
Issuing gate pass to the Lorries for weighment after receiving the delivery orders by the
deputy general manager.
Reporting of sales transactions to the deputy general manager
Record keeping regarding to the sales transactions done in the company.
Maintaining accounts.
Structure of the department:
Deputy General Manager (ACCOUNTS)
Director
Sugar trade head
Assistant sugar trade
Accounts assistant
Go down in charge
Godwn assistant
Boys
CO-GENERATION DEPARTMENT :
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A co-generation plant was established beside the ncs sugar’s limited. It was commissioned
from 17th march 2007. Two departments are in the co-generation plant one is technical
department and the other one is executive office. Here the Deputy General Manager manages
the total co-generation plant.
The plant total capacity is 20mw/h, and they provide 4.5mw to the sugar plant in the seasonal
period and 1mw in the off season. 10% of the total production consumed for the axillaries of
the co-generation plant and the remaining should be exported.
The byproduct begasse of sugar production is used as the raw material for the power
generation. Coal is used as raw material while in the off season. This coal is imports from
Indonesia.
Executive office:
This is the head office of the co-generation plant, total functions which are not related to
technical are done here.
Functions of executive office
Equipment availability:
Here they arrange the equipments to the power generation like fuel, machinery, man power.
Maintenance of schedules:
The co-generation plant is 24 hours working plant that’s why they maintain schedules for the
workers. Here the workers follow three shifts A,B,C.
A shift-----6am to 2pm
B shift-----2pm to 10pm
C shift-----10pm to 6am
General shift-----8am to 5pm
Power export and import activities:
The power after consumed by the sugar and co-generation plant is exports to the other states.
The deputy general manager and the other staff maintain this function
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Technical office functions:
The main function of the technical department is operate and controlling of the machinery.
They operate the machinery from the separate room by using some panels are control panel,
generator panel. In that panels displays the information regarding to the working of
machineries and power generation based on that information they operates and control them
Structure of the co-generation department:
Electrical engineers
Chemist
Plant operators
Instrumental engineer
Technicians
Deputy general manager
Deputy manager (Q.C)
Deputy Manager (technical)
Manager
Maintenance
Operation
Finance and Accounts Department:
The main function of financial development is to arrange the funds for salaries, wages for the
employees and daily wages, to arrange payment to the sugar cane growers for the purchase of
other considering goods, oils, chemicals, spare parts of the machinery and they have to
receive sale proceeds by way of selling products.
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Finance Department Chart
Accounting Department
Manager
Finance & Accounts
Asst Manager Finance & Accountants
Asst Accountant Officer
Clerks
Personnel department:
The main function of personnel department is to look after with manpower planning,
recruitment, selection, placement, induction, promotion, and transfer, demotion, separation,
lay-off, retrenchment, training, wage & salary administration. The personnel functions also
include the welfare aspects of labour are concerned with the conditions of work and elements
such as the provision of canteens, housing, transport, medical, education and health & safety
provisions.
Industrial Relations:
One of the key functions of the organizations is industrial relation. If the relation between
management & employee are cardial, the production is good. Otherwise the production
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decreases. It may lead to indiscipline and other misconducts.
Disciplinary:
To keep up discipline in the organization is another function of personnel department. If any
worker commits a mistake, the management must take action according to the sending.
Charge Sheet
Enquiry
Suspension
Dismissal
Employment:
Recruitment: It is concerned with quantity and quality of man power. Technical staff is
recruited from employment exchange. Take apprentices from employment exchange for a
period of 1 year. They give stipend for that year. After 1 year they are revealed from service. It
is for lower cadre like filters, technical staff etc. To receive the executive rank officers they are
giving paper ads in a leading news paper. They recruit these employees based on experiences.
Selection: Selection process typically follows standard pattern beginning with an initial
screening interviews and including the final employment decision.
Placement and Probation: A proper placement of a worker reduces employee turnover,
absenteeism and accident rates and improves more probation period, is 1 year. It extended to
them on for with permanent employees.
Promotions and Transfers: Promotions are based on the seniority and ability. But most of them
are based on seniority. Transfers are due to convenience of the company employee.
Temporary transfer due to ill health. Permanent transfers arising out of ill health.
Time, Office Management:-
Procedure of Taking attendance: The attendance procedure followed in this organization in the
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case of workers they had given the token numbers in this come to the organization they inform
their token numbers in the time office. In the case of staff they are given token numbers they
directly sign in the register. And also use bio metric system.
Shift Timings: As the manufacturing process of the company is continuous in the nature, the
working hours for the employees and workers are as follows during the season. For the staff
includes executives, supervisors, clerks, office boys etc. who are not connected with
manufacturing process. i.e., General Shifts from 9am to 6 pm For the Sr.Engineers, A.E’S.,
J.E’S, Supervisors, manufacturing chemicals, lab chemists and workers who are connected with
manufacturing process
‘A’ Shift – from 6.00 am to 2.00 Noon
‘B’ Shift – from 2.00 Noon to 10.00 pm
‘C’ Shift – from 10.00 pm to 6.00 am
Structure of the personnel department:
ELECTRONIC DATA PROCESSING CENTER:
This department is the key department for the organization because the information relating to
the all departments is stored in this department. They maintain separate database for store
the all these data. EDP in charge is the head for this department and three EDP assistants are
working in this department.
Objective of this department:
Prevent data losses
Reducing network problems
Functions:
The most common function of this department is day by day incremental back up.
Network checking.
Total systems in the organization are controlling by this department.
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Bio-metrics- dual checking. Through this they record daily attendance of the executives,
employees and workers.
Video conferences are held in this department. Through this top management participate in
meetings with other executives in the outside of the organization.
They ready to develop ERP.
Pay lists are creating here.
Department structure:
EDP assistant (3)
EDP in charge (1)
Deputy General Manager
WAGE AND SALRY ADMINISTRATION IN CICB Chemicon PVT LIMITED
Human Resource Management is the part of the Management Process that is concerned with
the Management of Human Resources in an Organization.
Human Resource Management is a multidisciplinary activity, utilizing knowledge and inputs
drawn from Psychology, Sociology, Anthropology and Economics etc.
The scope of Human Resource Management is very large. Wage and Salary Administration
plays a prominent role in each and every organization. Wage And salary Administration is
essentially the application of a systematic approach to the problem of ensuring that employees
are paid in a logical, equitable and fair manner.
The basic purpose of wage and salary administration is to establish and maintain an equitable
wage and salary structure and maintenance of an equitable labour cost structure. So that
satisfaction of employees and employers is maximized and conflicts minimized.
The wage and salary administration concerned with the financial aspects of needs. The needs
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of the employees so that reward can be individually designed to satisfy some need. Before
they do anything, they look for a reward (or) pay-off. The reward may be money (or)
promotion, but more likely it will be some pay-off a smile acceptance by a peer, receipt of
information, as kind word of recognition etc.
The Management of CICB-Chemicon Pvt Ltd has designed a well structured Wage and Salary
system. In the organization the salaries are paid at three levels namely salaries to non
managers including permanent and seasonal employees, salaries to executives and salaries to
management staff.
List of grades & attached pay scale
S.NO Grade Pay Scale
1Un skilled-II
2Un skilled-I
3Semi-skilled
4Skilled & clerical grade-IV
5Skilled & clerical grade-III
6Highly skilled & clerical grade-II
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7Supervisory & clerical grade-I 5700-40-6100-50-6600-60-7200-70-7900
5850-50-6350-60-6950-70-7650-80-8450
6035-60-6635-70-7335-80-8135-90-9035
6225-70-6925-80-7725-90-8625-100-9625
6350-75-7100-85-7950-95-8900-105-9950
6470-80-7270-90-8170-100-9170-110-10270
6625-90-7525-100-8525-110-9625-120-10825
The above table –shows what grades are in the NCS Sugars Limited and the pay scale in the
NCS sugars Limited that is paid for workers.
The table shows the pay scale non-managers in the company. There are basically three types
of non-managing employees. One is Supervisory cadre and the second one is clerical cadre
and the third one is the skill-based category.
In the unskilled grade II’s pay scale starts with 5700/- basic in this yearly increment is 40/-
once the scale cross the 6100/- the increment will grow up to 50/- the scale ends at 7900/-
basic.
Unskilled grade I’s pay scale starts with 5850/- basic in this yearly increment is 50/- once the
scale cross the 6350/- the increment will grow up to 60/- the scale ends at 8450/- basic.
Semi skilled pay scale starts with 6035/- basic in this yearly increment is 60/- once the scale
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cross the 6635/- the increment will grow up to 70/- the scale ends at 9035/- basic.
In the skilled and Clerical grade-IV’s pay scale starts with 6225/- basic in this yearly increments
is 70/- once the scale cross the 6925/- the increment will grow up to 80/- once the scale cross
the 7725/- the increment will grow up to 90/- the scale ends at 9625/- basic.
In the skilled and Clerical grade-III pay scale starts with 6350/- basic in this yearly increments
is 75/- once the scale cross the 7100/- the increment will grow up to 85/- once the scale cross
the 7950/- the increment will grow up to 95/- the scale ends at 9950/- basic.
In the skilled & Clerical grade-II pay scale starts with 6470/- basic in this yearly increments is
80/- once the scale cross the 7270/- the increment will grow up to 90/- once the scale cross the
2990/- the increment will grow up to 100/- the scale ends at 10270/- basic
In the supervisory & Clerical grade-I’s pay scale starts with 6625/- basic in this yearly
increments is 90/- once the scale cross the 7525/- the increment will grow up to 100/- once the
scale cross the 8525/- the increment will grow up to 110/- the scale ends at 10825/- basic
EXECUTIVES PAY SCALE
SUGAR FACTORY EXECUTIVES
S.no Name Designation Scale of pay
1
2
3
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4
5
6
M. Janaki manohar
K. Srinivas
K. Ravi Kumar
T. Srinivas raju
M. Suryanarayana
S. Balasubramanyam
Chief executive
Personnel manager
Executive – HR
Liaison officer
Sr manager(operation)
Jr.officer-HR
66500
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23750
18387
14250
23750
7753
CO-GENERATION EXECUTIVES
1
2
3
4
5
6
Y.V. Subba rao
P.Nagaraju
K.Murali
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V.Suryanarayana
Syed abdul nabi
M.V.V.S. Srinivas
Deputy general manger
Deputy manager (electrical)
Chemist
Deputy manager (mechanical)
Assistant manager (Q.C)
Sr Engineer (electrical)
54150
33250
13350
30400
20900
19000
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Wage & Salary Structure for different categories in NCS sugars limited
Managerial staff supervising candidates
Workers & electrical staff
Trainees
Apprentices
PRW for below 175 bags
Next 25 bags
Next each bag Consolidate
Wage Agreement
Consolidate
Government
Each bag 70 paisa
Each bag 90 paisa
Each bag 1.05 paisa
PRW-Piece Rate Workers:-
In seasonal 25% retaining allowance will be given for Piece rate workers. The above table
shows the information about how NCS Sugars Limited pays the wage and salary for workers
and managerial staff, supervising candidates and trainees and apprentices and Piece rate
workers.
LIST OF EMPLOYEES ELIGIBLE FOR P.F CUTTING
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Sugar executive employees ------ 30
Co-gen executive employees ------ 1
Sugar permanent employees ------ 64
Co-gen permanent employees ------ 3
Sugar seasonal employees ------ 177
Co-gen seasonal employees ------ 28
Sugar probation employees ------ 13
Co-gen probation employees ------ 9
Head office employees ------ 22
Arrears of all category employees ------ 14
Total ----- 361
SALARIES STRUCTURE UNDER WAGE BOARD SCALES
(Confirmed permanent and seasonal employees)
PF wages ( for the purpose of provident fund and gratuity)
Basic : ****
Dearness allowance : ****
Fixed allowance : ****
Family planning : ****
Medical allowance : ****
Allowances
Washing allowance : ****
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House rent allowance : ****
Conveyance allowance : ****
Different allowances are listed shown in the given below table
GRADES D.A M.A W.A H.R.A C.A
(field staff)
Un skilled-II
Un skilled-I
Semi-skilled
Skilled & clerical grade-IV
Skilled & clerical grade-III
Highly skilled & clerical grade-II
Supervisory & clerical grade-I 1757.65
1757.65
1757.65
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1757.65
1757.65
1757.65
1757.65 265.00
265.00
265.00
265.00
265.00
265.00
265.00 110.00
110.00
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110.00
110.00
110.00
110.00
110.00
240.00
250.00
300.00
340.00
340.00
340.00
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340.00
200.00
200.00
200.00
200.00
200.00
200.00
200.00
The above table shows the information about the different types of allowances that are paid to
the Non- executives in the company.
D.A - dearness allowance
M.A – medical allowance
W.A – washing allowance
C.A – conveyance allowance
The company gives dearness allowance to the employees based on the all India average
consumer price index points @ Rs 2.15 per point.
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Wage deductions:
The company deducts the wages of the employees in such cases provident fund, voluntary
provident fund, professional tax, life insurance policies taken by the employee, if the employee
took loans from the bank, if the company gives imprest allowance and festival allowance,
house maintenance, canteen tokens given by the company, group saving link insurance, cable
connection recovery.
Provident fund:
The EPF is a scheme intended to help employees from both private and non-pensionable public
sectors save a fraction of their salary every month in a saving scheme, to be used in an event
that the employee is temporarily or no longer fit to work or at retirement.
For P.F
Employee contribution is ------------------------- 12%
Employer contribution is ------------------------- 3.67%
Employer contribution for E.P.F ---------------- 8.33%
Voluntary provident fund ------------------------- 8%
Professional tax:
Professional tax is the amount levied on the income of the profession of the employee. This
amount is deducted based on the wage or salary earning of the employee.
Insurance policy:
If the employee take insurance policy from the insurance company he may liable to pay the
insurance term wise that’s why the company deduct his insurance premium amount and paid
directly to the insurance.
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Bank loans:
NCS provides bank loans for the employees based on their income capability through banks. If
any employees took bank loan, company deduct the amount which is liable to pay to recover
the bank loan and paid directly to the bank.
Canteen:
Company gives canteen tokens for subside to the employees. The amount for the tokens
collects from the salary of the employee.
SUMMARY OF SALARY BILL
Earnings:
Basic : ****
Fixed allowance : ****
f.p increment : ****
special pay : ****
V.D.A : ****
House rent allowance : ****
Medical allowance : ****
Washing allowance : ****
Conveyance allowance : ****
Other allowance : ****
Gross : ****
Recoveries:
Provident fund : ****
V.P.F : ****
Profession tax : ****
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Court attachments : ****
Life insurance policy : ****
Income tax : ****
Festival advance : ****
Education advance : ****
Canteen collection : ****
Cable T.V collection : ****
House rent recovery : ****
Electrical excess consumption: ****
R.D bank : ****
G.S.L.I : ****
L.W.F : ****
Club : ****
Others : ****
Imprest advance : ****
Salary advance : ****
Apco collection : ****
School : ****
M. club : ****
Dormitory : ****
Medicines : ****
Telephones : ****
Donations : ****
Net total : ****
SALARY BILL IN NCS SUGARS LIMITED
Earnings:
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Basic : ****
Fixed allowance : ****
F.P.Inc : ****
Special pay : ****
Dearness allowance : ****
House rent allowance : ****
Medical : ****
Washing allowance : ****
Conveyance allowance : ****
Others : ****
Gross : ****
Deductions:
P.V : ****
V.P.F : ****
P.Tax : ****
L.I.C : ****
Court : ****
Bank loan : ****
Imprest : ****
Fest : ****
Electricity : ****
H.M.R : ****
G.S.L.I : ****
Canteen : ****
Cable : ****
Po.rd : ****
Others : ****
Total deductions : ****
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Net salary : ****
REMUNERATION FOR THE EMPLOYEES IN NCS SUGARS LIMITED:
In the NCS sugars limited there are four types of employees. In those the remuneration is
different for the seasonal employees compared to the permanent.
They are:
Confirmed Permanent employees
Seasonal employees
Probation employees
Trainees
Confirmed permanent employees:
For these employees company give salaries for their work according to the wage agreement
between the workers and management of the company.
Seasonal employees:
For this type of Employees Company give salaries in the season. And in the off season they
provide retained allowance. The retained allowance is provided for the retaining of employees
in the company during the off season. This Retention allowance was given based on the
grades. It’s listed below.
Unskilled – II
25% in their salary in the season.
Unskilled – I
Semi skilled 35% of their salary in the season.
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Skilled & clerical grade – IV
Skilled & clerical grade – III
50% of their salary in the season.
Highly skilled & clerical grade – II
Supervisory & clerical grade – I
Probation employees:
For these employees company give salaries for their work according to the wage agreement
between the workers and management of the company.
Trainees:
Company paid remuneration for the trainees for their work according to the government rules
and provisions
Bonus given to the employees in NCS sugars limited:
NCS sugar’s limited prepare bonus bill for the following categories separately for the financial
year of every year (sugar & cogeneration plant)
1. Executive bill
2. Permanent bill
3. Seasonal employee’s bill
Company consider salary during season
Company consider retained allowance during season
Company considers the occupational wages during season
4. Probation employee bill
5. I.T.I apprentice bill
6. V.R.S employee bill
7. DIP trainees bill
8. Trainees bill
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NCS sugars have to calculate month wise the categories of the employees for bonus for 12
months ( i.e from periods 01.04.year to 31.03. year)
For calculation:
Total earned P.F wages × 8.33 % = one month bonus
100
For example:
Rs 3500/- × 8.33 % = Rs 291.55
100
( I.e bonus for 12 months = Rs 291.55 ×12 = Rs 3498.60 )
In the view of the above company take total earned pf wages and calculate month wise for 12
months. Bonus payable @ 8.33% maximum ceiling up to Rs 3500/-
Per annum those who have earned P.F wages subject to maximum ceiling up to Rs 10,000/- per
month salary based
Ex gratia for employees in NCS sugars limited:
NCS sugar’s limited prepare ex-gratia bill for the following categories separately for the
financial year of every year (sugar & cogeneration plant)
1. Executive bill
2. Permanent bill
3. Seasonal employee’s bill
Company consider salary during season
Company consider retained allowance during season
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Company considers the occupational wages during season
4. Probation employee bill
5. I.T.I apprentice bill
6. V.R.S employee bill
7. DIP trainees bill
8. Trainees bill
NCS sugars have to calculate month wise the categories of the employees for bonus for 12
months ( i.e from periods 01.04.year to 31.03. year)
For calculation:
Total earned gross wages
× 30 = One month ex-gratia
365 days
For example:
Rs 10,000/-
× 30 = Rs 821.91/-
365
( i.e ex gratia for 12 months = Rs 821.91 × 12 = Rs 9862/- ex gratia per year )
Manual option the above is subject to maximum for 15 days/ 30 days/45 days/ 60days for ex
gratia calculation
If company has paid any means the amount should be clubbed in concern month earnings and
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the same should be clubbed in grand total.
PENSION AND GRATUITY
Under the provident fund act 1925 the company follows the pension scheme 1995. According
to this the employer contribution for the pension is 8.33% and the employee’s contribution is
12%. Pension is deducting and calculating up to 58 years of the employee’s age. In the NCS
sugars limited the employees working period is 60 years but the amount deducts up to 58
years only. The remaining two years there is no deduction from wages and pension is payable
to that employee from 58 years age of the employee.
Employer’s contribution for pension = 12%
Employee’s contribution for pension= 8.33%
Calculation of pension amount:
Pensionable salary × pensionable service
Pension =
70
For example:
6500/- × 35
Pension = = 50 % =3250/-
7
Calculation of gratuity:
P.F wages × no of years service × 7 or 15
Gratuity =
26
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SUMMARY
The Human Resource Department of an organization is very much significant in establishing
itself as a brand. The past one year has seen an increasing number of companies focus on
creating a unique HR brand for their organization. The scope of Human Resource management
is very large and expanded the scope of HR function into the areas as personnel aspect,
welfare aspect and individual relations aspect.
Human Resource management is now regarded as a “must” for the successful running of a
business or industrial enterprise. HRM helps management at enterprise level, industrial level
and at societal level.
The basic purpose of wage and salary administration is to establish and maintain an equitable
wage and salary structure and maintenance of an equitable labour cost structure. So that
satisfaction of employees and employers is maximized and conflicts minimized.
The wage and salary administration concerned with the financial aspects of needs. The needs
of the employees so that reward can be individually designed to satisfy some need. Before
they do anything, they look for a reward (or) pay-off. The reward may be money (or)
promotion, but more likely it will be some pay-off a smile acceptance by a peer, receipt of
information, as kind word of recognition etc.
According to “Beach, Wage and Salary Programmes have four major purposes.
To recruit persons for a firm.
To Control Pay roll Costs.
To satisfy people, to reduce the incidence of quitting, grievances and fractions over pay.
To motive people to perform better.
The study has been taken up with the following objectives: To
know about the Wage and Salary administration of the CICB Chemicon Pvt limited,
Baikampady, Mangalore. To know about the different types of allowances in the CICB
Chemicon Pvt limited, Baikampady, Mangalore.To study about the employees’ Pay structure in
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the company. To assess the employees perception about the Wage and Salary structure of the
company. To identify problems, if any, in the Wage and Salary administration of the company
and to make suggestions.
The data for the study have been collected from primary and secondary sources. As part of
primary data, a survey has been conducted on the employees of CICB Chemicon Pvt limited,
Baikampady, Mangalore. A sample of 30 respondents has been selected on the basis of
convenience and a structured questionnaire has been administered to them. The responses
have tabulated and analyzed with the help of percentages. The secondary data are collected
from text books, magazines, company records and websites.
FINDINGS
The following are the findings:
? The additional cane price given by the NCS sugar’s limited is good and attracts the farmers.
? NCS sugar’s limited, latchayya peta, is paid wage and salary according to the wage board.
? NCS sugar’s limited, latchayya peta management must ensure the employees know and
understand about the wage agreement.
? Half of the respondents are satisfied with the receiving the bonous.
? It is observed that majority of the employees 98% are very much satisfied with the salary
that they are receiving.
? Majority of the employees opinioned that their job was good, 17% however said that it is
average.
? It is found that, majority of the employees are feeling good about the overtime salary. While,
16% of employees felt that it is average, 10% however felt that it is poor.
? Majority of the employees 79% are feeling good about the house rent allowances that are
provided by the company.
? Majority of the employees 81% have the more satisfaction regarding the salary increments
rest of the responsents not satisfied.
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? It is observed that majority (81%) of the employees opined that the increments given are
good.
? Most of the the employees are very much satisfied with the payment of the salaries in time.
? NCS sugars limited conducts social activities like eye camp and so on.
CONCLUSION
The employees of the NCS sugra’s Limited are more satisfied with their wages and salaries.
The wage and salary structure and employee benefits and services is one of the vital area of
personal administration for sound wage and salary policies and programmes are essential to
maintain, develop, promote and transfer employees and to get effective results from them.
Wage and salary structure are perhaps the most important single element in the condition of
employees. Organizational morale cannot be maintained at high level without a fair equitable
and sound remuneration programme.
The wages and salary administration in NCS sugra’s Limited is a big task and it is being
managed by inviting lot of human resources. The little attention has been devoted to study the
internal structure and Human Resources Management policies.
Therefore it is felt that the study relating to wage and salary administration in NCS sugra’s
Limited help and understand and analyze the practices. Thus, policies and practices of wage
and salary administration should be structured effectively and efficiently.
SUGGESTIONS
? NCS sugar’s Limited management must to says to workers how much percentage to cut their
salary under the PF. The management must to essentiate the PF with wages or salaries.
? NCS sugar’s Limited management ask the opinion of the employees, before the implement
the wage agreement.
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? NCS sugar’s Limited management should wage settlement with in five days after the month.
? NCS sugra’s Limited management should be increase the payment for VRS of the workers.
? The compnay follows consolidating wages for the newly recruiting employees. But the salary
under the wage board gives job security to the employees.
BIBLIOGRAPHY
BOOKS:
Essential of the Human Resource Management and Industrial Relations
-P.Subba Rao.
Human Resource Management
-Dr. C.B.Gupta.
Library, Journals & personnel Department of CICB Chemicon Pvt Limited
WEBSITES:
www.cicb-chemicon.com
www.indiastat.com
www.google.com
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