PROJECT REPORT ON
WAGES AND SALARY ADMINISTRATION
SUBMITTED BY
MS. ASHLEEN ANAND
ADMISSION NO. :- DPGD/JL09/1063
SPECIALIZATION : - HUMAN RESOURCE
WELINGKARS INSTITUTE OF MANAGEMENT & RESEARCHMUMBAI.
JUNE 2011
ACKNOWLEDGEMENT
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
DAITHANKAR, 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 required, without which this project would have
been a different story.
Ashleen Anand
i
INDEX
Sr. No Topic Page No.
1 EXECUTIVE SUMMERY 1
2 COMPANY PROFILE 6
3 OBJECTIVES OF THE STUDY 13
4 INTRODUCTION TO TOPIC 14
5 RESEARCH METHODOLOGY 38
6 DATA ANALYSIS 41
7 FINDINGS OF THE STUDY 49
8 SUGGESTIONS AND CONCLUSION 51
9 LIMITATIONS 54
10 BIBLOGRAPHY 55
CHAPTER 1: EXECUTIVE SUMMERY
The project was carried out at EPCOS India Pvt. Ltd, Mumbai. The title of this project
is The Study of Salary and Wage Administration. The objective of the study is to
analyze the Salary Administration in EPCOS India Pvt. Ltd.
The study was conducted to know the structure and salary provided by the Company
to its employees. In this project, I studied about the present salary compensation of
EPCOS along with the evaluation of the incentives, bonus, and allowances given to
the employees.
I also studied the execution of Provident Fund, Gratuity, and Encashment of leave for
the final payment of the employee when he/ she leave the company. During the course
of project, I got the clear idea about the salary structure and about the overall
functioning of the organization.
1
Introduction:
The payment of wages and salary is an inbuilt system with human force for their
activity performed. To what extent the payment of wages & salary is reasonable and
adequate in consonance to the nature of the work performed, is a question mark.
The reason attributed, is the existence of very large labour force and availability of
abundant work force whether it is a farm sector of industrial sector. The supply of
labour is more then the demand and with the result there is exploitation of cheap
labour policy. Later the advent of trade unionism helped to improve the working
conditions of labour. Until the Second World War, event the Government adopted a
“LAISSEZ – FAIRE” policy in this regard. It was as late as in 1947, that the
industrial unrest become so uncontrollable that a tripartite conference was convened
of (1) Central and State Govt. (2) Employers, and (3) Employees, which resulted in
the industrial trade resolution. It was realized that increase in production was not
possible without the fullest cooperation between management and labour. This led
to appointment of the fair wages committee and profit sharing bonus committee.
Thus, the lot of the worker began to improve of the living.
Wages Vs Salary:
Payment made to labour is generally referred to as wages. Money paid periodically
to persons whose output cannot to be easily measured, such as clerical staff as well
as supervisory and managerial staff, is referred to as salaries. Salaries are thus paid
generally on a monthly basis 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.
2
However, it is in area of labour that there are several types of methods of wage
payment. Systems of Wage Payment:
In case of worker, the wages are depend generally on the rates of wages which may
be barely rate or time rate or leased on a piece rate, that is, dependent on worker’s
output. There are also various combinations of not only time & piece rate systems,
but 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.
Time of wage Payment:
Under 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. The main advantages under this system are
the followings:
I. It is simple in calculation
II. The worker does not rush the job and spoil the quality through a temptation
of earning more
The following are however the drawbacks of the system:
I. The worker being 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. The superior worker often tries to protect his slower colleagues by the
slacking off himself.
III. The superior worker is discouraged as, although he is more productive, he
is paid the same amount. He therefore slackens’ off over a period time.
3
The system is satisfactory from the viewpoint of providing incentive to
work harder and more productivity
The piece wage system:
In this system, the worker is paid a fixed rate per unit produced or job completed.
The rate is normally developed on the basis of analysis of previous performance and
establishment of average performance of a particular standard of workmanship.
The following are the advantages of The Piece Wage System:
I. As the worker is paid more when he produces more, he is inclined to put
forth his best efforts. This results in increased productivity, which benefits
both the employer and employee.
II. The employee helps management in avoiding delays through breakdown.
III. The superior worker is induced to work hard as at the end of the period he
finds that his pay is large than that of lazy of worker.
IV. In his effort to produce more, the worker may disregard the spoiling of his
tools and machinery used by him for the production.
V. It is paid merely on the basis of the number of items produced without regard
to quality. The quality of the production is likely to decline. There is thus a
tendency to sacrifice quality in favour of quantity.
VI. This 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.
4
Premium Bonus Method:
As in the piece wage system, the employee is not guaranteed any minimum wage
in case the supply of labour is abundant, the piece-wage rate could be so lowered
as to lead to sweating and other evils. Because of this, trade unions began to object
the piece-wage system. They pressed for a guarantee of a fair minimum wage in
connection with certain trends. As a result, of this, a number of systems of wage
payments emerged technically known as progressive wage systems.
5
CHAPTER 2: COMPANY PROFILE
Name of the Company EPCOS India Pvt. Ltd
Year of Acquisition 1996
Factory Office Plot No. E 22-25, MIDC, Andheri
Mumbai- 400059/ Maharashtra.
Annual Turnover 250 crores
Products Manufacturing of film capacitors
Plants of Manufacturing 5 All over the World
Total No. of Plants in India 1
Plant Head Mr. B. Mitra (President)
Managing Director Mr. H. S. Banerjee
Personnel Manager Mr. Anil Daithankar
Total No. of Employee 1036
Whit Collar 235
Blue Collar 254
6
HISTORY:
EPCOS develops, manufactures and markets electronic components modules and
systems, focusing on fast-growing leading-edge technology markets: in IT and
telecommunications, but also in automotive, industrial and consumer electronics. A
uniquely broad product portfolio and truly global presence have made EPCOS a global
market leader in products that account for 60 percent of our sales. A further 30 percent
is generated by products in which we are the number one in Europe.
EPCOS was floated simultaneously on the Frankfurt and New York Stock Exchanges
on October 15, 1999. The listed company emerged from Siemens Matsushita
Components, a joint venture founded in 1989 by Siemens and Matsushita. Because of
the low trading volume, EPCOS has decided to delist and to deregister from the New
York Stock Exchange in November 2007. Since March 2003, EPCOS has been one of
the largest companies in the TecDAX index of German technology stocks.
7
EPCOS
ELECTRONIC PARTS AND COMPONENTS
CORPORATE CHARTER
1. Vision : The aim of EPCOS India Pvt. Ltd is to make the name EPCOS
synonymous with excellence in electronic components to customers, employees and
investors alike.
2. Business : EPCOS develops, manufactures and markets electronic components
and modules. These products process electronic signals, control power supplies and
protect electronic circuitry.
3. Goals : The Company wants to generate lasting profits and constantly increase
shareholder value. It wants to be a leader in every market that we serve. Their success
is based on strict customer orientation, comprehensive and outstanding innovative
strength.
4. Customer Orientation : Providing products and services that make their
customers more competitive is their top priority. The personal commitment of every
EPCOS employee makes a vital contribution to customer satisfaction.
8
5. Cost and Process Competence : They are continuously improving their work
processes and working hard to keep cutting our cost while increasing their speed and
reliability.
6. Innovative Strength : They create innovative products that provide new solutions
for their customers and help to strengthen existing or establish new business
relationship. Innovation is the lifeblood of their company.
7. Investor Orientation : EPCOS shareholders provide the capital for and are the
owners of their company. They do their utmost to maintain and increase shareholder
value.
8. Employee : Their employees are their most precious assets. Their resourcefulness,
competence, motivation and drive are essential to their company’s success. They are
committed to a corporate culture that promotes creativity, teamwork and enterprise.
9
EPCOS: A company that opens up new prospects to customers, investors and
employees.
QUALITY POLICY
It is their endeavour to make the name EPCOS synonymous with world leadership in
passive components by opening up new prospects to customers, investors and
employees through customer orientation, innovation cost consciousness and continual
improvement in all their business processes.
QUALITY OBJECTIVES
Customer Orientation: Knowing their customers’ needs, requirements and
expectations and giving them outstanding prospects and services.
Innovation: Shaping constantly their innovations for the benefits of their customers by
giving their employees the freedom to unfold their creativity.
Cost Consciousness: Opening to new approaches and constantly cutting their cost.
Continual improvement: Institutionalize the approach in all functions by updating
their quality management system.
Above objectives are quantified by individual functions and measured and reviewed to
align with quality policy.
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PRODUCT PORTFOLIO:
EPCOS is mainly engaged with manufacturing of film capacitors.
Following types of film capacitors are manufactured in Nashik Plant:-
DC Capacitors
AC Capacitors
Power Factor Corrections Capacitors (PFC Gas Failed) MKK.
Power Factor Correction Resign Filed (PFC).
MARKET POSION
In the field of electronic components and modules EPCOS regard itself as number 2
world wide and number 1 in Europe.
EPCOS INDIA PVT LTD
EPCOS has two manufacturing facilities in India-
1) Mumbai (Maharashtra) founded in 1996
2) Kalyani (Kolkata W.B.)
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ORGANIZATIONAL CHART
PERSONNEL
MANAGEMENT DIRECTOR
12
GENERAL MANAGER
MANAGER
SENIOREXECUTIVE
MANAGEMENT SECRETARY
EXECUTIVE OFFICERS ASSISTANT OFFICER
CHAPTER 3: OBJECTIVES OF THE STUDY
1. To study the Compensation Structure and administration in EPCOS.
2. To know the satisfaction level of the executives and the workers regarding the
facilities and allowances given by the EPCOS.
3. To know the satisfaction level of the salary distribution process carried out in
EPCOS.
13
CHAPTER 4: INTRODUCTION TO THE TOPIC
DEFINITION OF COMPENSATION
According to Rynes {1987}, compensation is particularly important as a recruitment
tool because
1. It is vehicle for satisfying a wide array of human needs,
2. Salary offers are expressed in clear and comparable terms
3. Stating salaries have for future salary progressive, and,
4. Pay system communicate so much about an organization’s philosophy, values,
and practices.
OBJECTIVES OF COMPENSATION:
The objectives of any payment systems are numerous and might include the
following:
1. To enable the employees to earn a good and reasonable salary or wage;
2. To pay equitable sums to different individuals, avoiding anomalies;
3. To reward and encourage high quality work and output;
4. To encourage employees to develop better methods of working and their
acceptance;
5. To discourage wastage of materials or equipment;
6. To encourage employees to use their initiative and discretion;
7. To discourage overtime working unless it is very essential;
8. To raise morale and increases efficiency of the staff and finally keeping
them contended.
14
TYPES OF COMPENSATION:
Compensation provided to employees can direct in the form of monetary benefits
and/or indirect in the form of non-monetary benefits known as perks, time off, etc.
Compensation does not include only salary but 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 contributes to high organizational
productivity.
1. Direct Compensation
2. Indirect Compensation
15
COMPENSATION MANAGEMENT
DIRECT COMPENSATION INDIRECT COMPENSATION
16
Salary Basic
House Rent Allowance
Medical Reimbursement
Conveyance
Leave Travel Allowance
Bonus
Special Allowance
Overtime Wage
Retirals Benefits
Leave Policy
Hospitalization
Insurance
Flexible Timings
IMPORTANCE OF COMPENSATION:
Compensation and Reward system plays vital role in a business organization. Since,
among four Ms, i.e. Men, Material, Machine and Money, Men has been most
important factor, it is impossible to imagine a business process without Men. Every
factor contributes to the process of production/business. It expects return from the
business process such as rent is the return expected by the landlord, capitalist
expects interest and organizer i.e. entrepreneur expects profits. Similarly the labour
expects wages from the process.
Labour plays vital role in bringing about the process of production/business in
motion. The other factors being human, has expectations, emotions, ambitions and
egos.
Labour therefore expects to have fair share in the business/production process.
Therefore a fair compensation system is a must for every business organization. The
fair compensation system will help in the following:
An ideal compensation system will have positive impact on the efficiency and
results produced by employees. It will encourage the employees to perform better
and achieve the standards fixed.
It will enhance the process of job evaluation. It will also help in setting up an ideal
job evaluation and the set standards would be more realistic and achievable.
Such a system should be well defined and uniform. It will be apply to all the
levels of the organization as a general system.
The system should be simple and flexible so that every employee would be able to
compute his own compensation receivable.
17
It should be easy to implement, should not result in exploitation of workers.
It will raise the morale, efficiency and cooperation among the workers. It, being
just and fair would provide satisfaction to the workers.
Such system would help management in complying with the various labour acts.
Such system should also solve disputes between the employee union and
management.
The system should follow the management principle of equal pay.
It should motivate and encouragement those who perform better and should
provide opportunities for those who wish to excel.
Sound Compensation/Reward System brings 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.
The system provides growth and advancement opportunities to the deserving
employees.
The perfect compensation system provides platform for happy and satisfied
workforce. This minimizes the labour turnover. The organization enjoys the
stability.
The organization is able to retain the best talent by providing them adequate
compensation thereby stopping them from switching over to another job.
The business organization can think of expansion and growth if it has the support
of skillful, talented and happy workforce.
The sound compensation system is hallmark of organization’s success and
prosperity. The success and stability of organization is measured with pay-package
it provides to its employees.
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INTRODUCTION TO SALARY ADMINISTRATION
What is Salary?
The Roman word salarium linked employment, salt and soldiers, accepting
salt from a person was synonymous with drawing sustenance, taking pay, or being
in that person's service. Soldiers were known to have been paid, and maintain
instead that the salarium was an allowance for the purchase of salt, at that time salt
19
production was strictly controlled by the monarchy or ruling elite. Today, the idea
of a salary continues to evolve as part of a system of all the combined rewards that
employers offer to employees. Salary (also now known as fixed pay) is coming to
be seen as part of a "total rewards" system which includes variable pay (such as
bonuses? incentive pay, and commissions), benefits and perquisites (or perks), and
various other tools which help employers link rewards to an employee's measured
performance. A salary is a form of periodic payment from an employer to an
employee, which is specified in an employment contract.
From the point of view of running a business, salary can also be viewed as the cost
of acquiring human resources for running operations, and is then termed personnel
expense or salary expense. In accounting, salaries are recorded in payroll accounts.
Salary is compensation to an employee for services rendered on a weekly, monthly
or annual basis. Salary is usually associated with office employees, supervisors,
managers and professional and technical staff. In any organization, salaries and
wages constitute a significant portion of the cost of operation of the business.
Difference between Salary, Wage and Compensation:
Salary refers to the monetary payment on a monthly or annual basis.
Wages are the remuneration paid by the employer for the service of a worker who is
engaged by the hour, days, week or fortnight. Wages are payments to hourly-rated
production and maintenance employee.
Compensation refers to all forms of financial returns, tangible services and benefits
20
employees receive as a part of an employment relationship. Compensation may be
received directly in the form of cash (wage, bonus, incentives) or indirectly through
services and benefits (pensions, health insurance, vacations).
What is Salary Administration?
Salary administration refers to the establishment and implementation of sound
policies and practices of employees’ compensation. Salaries represent a significant
portion of the total costs in most of the organizations and so it requires sound
administration. The control of salary level is of paramount importance even though
the amount of control which can be exerted may vary among organizations and
within an organization.
21
Pay can influence employees’ work behaviours and attitudes. It becomes crucial for
managers to ensure that pay systems are designed and administered in fair and
equitable manner. The salary administration is thus concerned with the monetary or
financial aspects of needs, motivation rewards. The
responsibility for salary administration usually lies with the top management.
Objectives of Salary Administration
1. Control of cost
2. Establishment of fair and equitable structure of remuneration
3. Utilization of wages and salaries as an incentive to greater employee
productivity
22
4. Maintenance of a satisfactory public image
5. Determination of the system of job description and job evaluation
6. Decision of what and how people will be paid
7. Checking all activities of the salary administration group
8. To recommend changes in the salary policy and specific raises for executives
at various levels
9. To review salary scheme
10. To attract and encourage staff to make full use of their abilities and develop
their potential.
SALARY AND WAGE ADMINISTRATION PROCESS IN EPCOS
2.1 Introduction: -
Salary 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.
2.2 Objective:-
23
To define the procedure for Gross Pay and deduction calculation
To ensure the correctness of salary calculation and create General Ledger.
2.3 PROCESS :-
2.3.1 Employee Master Data Entry in PAMS :-
Personnel Officer enters Employee Master Data in PAMS. The Reference
Documents are Appointment Letter and PER/01 form which the employee fills
when he joins the organisation. The Relevant Fields for PAMS entry are as follows:
Personal Details
Booking Details
Job Details
Salary Details
Accommodation Details
Family Details
Qualification Details
Other Details
2.3.2 Activity Inputs:
Personnel Executive passes initial appointment Activity for new entrants. This
activity is essential to regularise the employees’ details in the system. This will ensure
to give salary effect from the date of joining of the new employee. The Path to enter
this activity is:-
24
PAMS Master Maintenance EmployeeActivity Input Other Activity
Input (select from the drop down list available)
The reference document for above activity is appointment letter and PER/01. This
ensures that the employee is in payroll system.
Systems Support Facility is available in PAMS to maintain Allowances and Tables
various grade Structures.
2.3.3 Uploading of Transactions:
The Transactions which are uploaded are as follows:
Details of Absenteeism, particularly unpaid leaves are counted.
Overtime Details
Saturday Working. Saturday working allowance is 50% of Basic +VDA + Adhoc
Basic)
25
Attendance Bonus Details
Production Incentive Details
Reversals to deduct the paid for payment on absence
Miscellaneous Recoveries: - Union Recovery, Mediclaim payment Recovery,
Death Relief fund and other deductions.
Activity inputs: - This includes Probation activity, confirmation activity;
separation activity to be entered in system as per monthly transaction data.
2.3.4 Verification :
Personnel Executive verifies all input data before salary processing.
2.3.5 Salary Processing: -
Personnel Executive processes the salary. During salary processing PAMS
calculates standard and non standard salary of active employees based on payment
deduction Tables in system support facility and variable inputs entered. After
verification further corrections are made, if necessary.
2.3.6 Check List:-
After salary processing is over for all the employees, Personnel Executive checks
the processed data thru salary query screen as per inputs given. In case of
correction, Personnel Executive restores the specific employee details and does
necessary corrections and reprocesses the same.
26
2.3.7 Creation of General Ledger and Salary Summary : -
Personnel Executive processes GL and then after prepares the salary summary and
General Ledger Report. Personnel Executive verifies the General Ledger. Previous
months and current months’ salary is compared to ensure correctness. The debit and
credit amounts shown at the end of GL report is checked and ensured that the debit
and credit amounts are same and there is no variance in General report.
2.3.8 Gross Pay and Deduction Calculation: -
In salary summary, Payment and deduction details with Net Salary must be
checked. Also ensure that the Bank Salary, Cash Salary and cheque Payments are
considered while calculating the salary summary.
2.3.9 Generation of Bank Advise:-
Personnel Executive prepares Bank Advise. He then sends this Bank advise to
Accounts Department to release the salary Cheques. The Personnel Executive
checks and verifies the bank advise and salary summary before sending it to the
Accounts Department.
27
2.3.10 Generation of Cash Note : -
Personnel Officer prepares Cash Salary Statement. Cash salary details are then sent
to Accounts Department for necessary Cash Provisions. The Cash Salary is
disbursed by the Personnel Department.
After receiving cheques from accounts department, personnel department prepares
Forwarding Letter and deposits cheques, bank List to respective bank to credit the
salary of every employee as per the list provided by the Personnel Officer.
2.3.11 Authorisation of Salary Payment Advise:-
The authorisation of salary payment Advise is done by the Personnel Manager.
2.3.12 Transfer of GL File to F & A Department:-
The General Ledger prepared by the Personnel Executive, is then transferred to
finance and accounts Department.
2.3.13 Uploading General Ledger File in SAP: -
28
Personnel Officer generates the SAP compatible General Ledger Report and sends
to accounts Department for necessary Posting in SAP.
2.3.14 Salary Distribution :-
Accounts Department verifies and sends the cheques to the respective Bank of the
Employee, which is then distributed to their respective accounts. This is salary
distribution through Bank. If the employee does not hold any bank account, then his
salary is encashed by Personnel Officer and distributes to them.
SALARY AND WAGES ADMINISTRATION STRUCTURE IN EPCOS
Salary and wages administration structure of the EPCOS India Pvt. Ltd. mainly
depends upon,
1. Category
2. Grades
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1. CATEGORY:
Category is mainly divided into four types,
Management
Staff
Workmen
Trainees
I. Management:
Management people are the professionals engaged for supervisory work and
commercial executives work of the company. These are basically Officers,
Executives, Deputy Manager, Senior Manager, President and Managing Director.
This Management Category is classified on the basis of Grades, starting from MC1
to MC9.
II. Staff:
The Staff people are the clerical personnel working in commercial functions, stores.
These include Assistance, senior assistant etc. this category is classified into two
Grades:-
OE1
OE2
30
III. Workmen:
Average age of the workmen is 32 years. These are the operating hands on working
on shop floor for manufacturing activities of the company. Workmen are covered
under labour laws. There are254 workers, the qualifications of these workers are ITI
(Industrial Training Institute) and NCTVT (National Council for Technical
Vocational Training). All the engaged workmen are recruited after completing one
year training with the Company.
Workers are members of Nashik Workers Union, registered under the Trade Union
Act 1926 and is representing the permanent monthly rated workmen in Grade S, S0
and S1, in the factory of the company. A settlement dated 26 th October 2007 was in
existence between the parties, i.e. Nashik Workers Union and EPCOS India Pvt.
Ltd.
It is agreed that the total amount of Rs. 3100/- (Rupees Three Thousand One
Hundred only) over the operative period of this settlement as follows:
Period
Rise
Given per
Month
Therein
Basic/
Adhoc
Basic per
Month
Therein
Allowances
per Month
Total per
Month
1.4.2007 to 31.3.2008 Rs.2400/- Rs.1200/- Rs1200/- Rs.2400/-
1.4.2008 to 31.3.2009 Rs.350/- Rs.175/- Rs.175/- Rs.350/-
1.4.2009 to 31.3.2010 Rs.350/- Rs.175/- Rs.175/- Rs.350/-
31
It is agreed between the parties that the quantum of benefits to be distributed over
various heads for a period of three years commencing from 1st April 2007 and
ending on 31st March 2010.
IV. Trainee:
Trainee is the fresher student coming with the technical stroke commercial
background. These people are engaged to gain hands of working experience. The
company has full fledged training scheme for all these people. The company
offers systematic training plan for all these trainees. The Company recruits
different types of trainees like Technical Trainees, Graduate Commercial
Trainees, Management Trainees, Graduate Engineer Trainees, Diploma Engineer
Trainees, etc. The company offers training to these fresh graduates for the
duration of one year. The company offers stipend and learning allowances to all
engaged trainees. To meet with the needs of educational material and facilities, the
company also offers statutory benefits like Provident Fund and ESIC to the
trainees. After all successful training period, the company offers employment
opportunities are depend on all available vacancies.
3. GRADES:
Grades are distributed to each employee on the basis of category.
Management
Staff
Worker
32
Trainees
I. MANAGEMENT :
Grade MC1, MC2 and MC3 - Officers and Executive, Senior Executives.
Grade MC4, MC5 and MC6 - Deputy Manager, Manager to Senior Manager
Grade MC7, MC8 and MC9 - Gm, Senior Gm, President
Grade DR – Managing Director
II. STAFF :
Grade OE1 - Assistant
Grade OE2 – Senior Assistant
III. WORKER :
Grade S – Semiskilled Workers
Grade S0 – Skilled Workers
Grade S1 – Senior operator or Junior Engineer
IV. TRAINEES :
33
Technical Trainees – ITI
Graduate Commercial Trainees – Any Graduates
Management Trainees – MBA, MPM
Graduate Engineers Trainees – BE
Diploma Engineers Trainees – Diploma Engineers
SALARY ALLOWANCES GIVEN TO THE EMPLOYEES
I. MANAGEMENT AND STAFF:
A. PER MONTH:
Basic
House Rent Allowance
Medical Reimbursement
Supplementary allowance
B. ANNUAL:
Leave Travel Allowance (LTA) – Annual Payment as per Grade
Bonus – Only for eligible employees, those having basic + DA less than Rs.
10,000
II. WORKMEN:
34
A. PER MONTH:
Basic
Variable Dearness Allowance (VDA)
House Rent Allowance (HRA)
Conveyance Allowance
News Paper Allowance
Washing Allowance
Education Allowance
Adhoc Basic
B. ANNUAL:
Bonus
Exgratia
III. TRAINEES:
A) ANNUAL:
Stipend
Learning Allowance
FACILITIES PROVIDED TO THE EMPLOYEE:
35
1. Mediclaim facility for spouse and parents (For Staff, Management, Workmen)
2. Get-together – twice in a year
Get together with Family
Get together without family
3. Shoes, Aprons
4. Sweets distribution for each employee on Dasara and Diwali
5. Death relief scheme
6. Superannuation Scheme – Only for Management.
36
STATUTARY REQUIREMENT
No employer is allowed to pay any employee ‘the compensation’, which is less than the
prevailing rate prescribed under the ‘Minimum Wages Act 1948’. Compensation to the
Directors of Public Ltd. Companies should be paid according to the provisions of the
Companies Act 1956. Apart from the legislations, following important legal enactment’s
determines the amount of compensations:
The Minimum Wages Act, 1948
The Employee State Insurance Act, 1948
The Payment of Gratuity Act, 1972
The Employee Provident Fund And Miscellaneous Provisions Act, 1952
The Payment Of Wages Act,1936
The Factories Act, 1948
The Payment Of Bonus Act, 1965
The Factories Act, 1948 stipulates the amount of compensation to be paid in respect of
overtime work.
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CHAPTER 5: RESEARCH METHODOLOGY
Introduction:
Research is an art of scientific investigation through search of new facts in any branch
of knowledge. It is movement from unknown to known. The study of research
methodology gives the student the necessary training in gathering materials required,
and also training in technique for the collection of data appropriate to particular
problem. It helps in the use of statistics, questionnaire and controlled experimentation
and in recording evidences, sorting it out and interpreting it. Knowledge of research
methodology is helpful in various fields. Research methodology plays key role in
project work. It consists of series of actions or steps necessary to effectively carry out
research and the desired sequencing of these steps.
Basic features of a research process are:
Research always starts with a question or a problem.
Its purpose is to find answers to questions through the application of scientific
method.
It is a systematic and intensive study directed towards a more complete
knowledge of the subject studied.
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Methods of Data Collection
Data collection is an elaborate 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. The task of data collection begins after a research
problem has been defined and research plan is chalked out. While deciding about the
method of data collection to be used for the study the researcher should keep in mind
two types of data viz., primary data and secondary data.
Sources of Data
A. Secondary data:
Secondary data is the data already collected by others for purposes other than solution
of the problem at hand. In case of Secondary data the nature of data collection work is
merely that of compilation. Secondary data has several supplementary uses.
1. Internal sources:
Company Records.
Service Reports.
Annual Report.
Company Brochure.
Company Library.
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2. External sources
Web pages of organizations and journals.
Reference Books.
Magazines.
Newspapers.
B. Primary data:
The data that is being collected for the first time or to particularly fulfil the objectives
of the project are known as primary data. In my study work, stratified simple random
sampling was the method of Data Collection.
Data Evaluation
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 objective of the project. This relevant data is finally evaluated to make the
final report and to draw the conclusion
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CHAPTER 6: DATA ANALYSIS
The 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.
Sample sizes of 30 for each were taken to carry out the survey and following
questionnaire were provided for the survey.
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FOR EXECUTIVES
Sr. No.
Questionsasked
Not Satisfied
Not Much Satisfied
To Some Extent Satisfied
Quite Satisfied
Fully Satisfied
1 Whether the executives were satisfied with the salary distribution process adopted by EPCOS?
- - - -
2 Whether the executives were satisfied with the allowances given by EPCOS?
- - - -
3 Whether the executives were satisfied with the facilities given by EPCOS?
- - - -
FOR WORKERS
4 Whether the workers were satisfied with the salary distribution process adopted by EPCOS?
- - - -
5 Whether the workers were satisfied with the allowances given by EPCOS?
- - - -
6 Whether the workers were satisfied with the facilities given by EPCOS?
- - - -
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I. Whether the executives were satisfied with the salary distribution process
adopted in EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 6 15 6 30
Percentage 0 10 20 50 20 100
Interpretation: - Most of the executives were quite satisfied with the salary
distribution process adopted by EPCOS.
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II. Whether the workers were satisfied with the salary distribution process
adopted in EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 15 6 6 30
Percentage 0 10 50 20 20 100
Interpretation: - Most of the workers were satisfied to some extent with the
salary distribution process adopted by EPCOS.
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III. Whether the executives were satisfied with the allowances given by
EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 12 9 6 30
Percentage 0 10 40 30 20 100
Interpretation: - Most of the executives were satisfied to some extent with
the allowances given by EPCOS.
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IV. Whether the workers were satisfied with the allowances given by EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 18 9 0 30
Percentage 0 10 40 30 0 100
Interpretation: - Most of the workers were satisfied to some extent with the
allowances given by EPCOS.
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V. Whether the executives were satisfied with the facilities given by EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 9 18 0 30
Percentage 0 10 30 60 0 100
Interpretation: - Most of the executives were quite satisfied with the
facilities given by EPCOS.
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VI. Whether the workers were satisfied with the facilities given by EPCOS?
a) Not satisfied b) Not much satisfied c) To some extent satisfied d) Quite
satisfied e) Fully satisfied
Options a b c d e Total
Response 0 3 18 9 0 30
Percentage 0 10 60 30 0 100
Interpretation: - To the some extent workers are satisfied with facilities given by
EPCOS.
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CHAPTER 7: FINDINGS OF STUDY
According to this survey, I could conclude following: -
1. Compensation has major impact coming out of age and experience i.e. more age,
more experience, more CTC. Therefore, more the length if the service, higher the
wages.
2. As the industry goes number of settlements, it reaches to saturation point, then the
increase in the direct wages is minimum.
3. As it matures to saturation point, more benefits come out of facilities and benefits
rather than rise in direct wages.
4. Any entrepreneur business organization is run to earn profits and ultimately to make
money. In a typical manufacturing set up the buyer i.e. customer decides the product
price. A product consists of following cost put on it.
Raw material cost
Labour cost
Overheads
Scheduled profit out of that product
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In the above cost, the end customer has always expectation of lowering it or to
maintain at same level. However, out of above item, raw material cost and labour
cast will have always incremental effect. So to have better profit out of
manufacturing, you need to have control over overheads as well as labour cost.
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CHAPTER 8: SUGGESTIONS & CONCLUSION
SUGGESTIONS: -
Take care of changes in IT rules
Company does compensation restructuring based 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.
Transport Facility:-
The company may provide transport facility rather than giving Conveyance allowance.
On giving an informal talk with employee of the company, it was found that the
employees are more interest in having pick- up and drop facility.
Festival Advance:-
Company may provide a festival advance facility which will prove more beneficial for
the employees and which will help them in fulfilling their needs arising during the course
of any festive occasion.
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Salary Survey:-
Company should conduct salary survey to find out and study recent patterns in similar
industry. Based on the finding of such surveys they should restructure the compensation.
Flexible To Suit Added Liabilities:-
As employees grow in the organization, simultaneously his family liabilities also grow.
To accommodate such liabilities like children education, dependent family members’
marriage, and medical expenses this should be considered in deriving compensation
package.
Continuous Training And Rewards:-
In the competitive era, to keep feet one need to continuously upgrade him by way of
knowledge base and develop things which may utilize for organizational development.
Thus, there has to be proper consideration for rewarding such things.
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CONCLUSION: -
From this project report, I could conclude that compensation management plays integral
role in obtaining organizational goals.
1. Any compensation program must have the strong linkage to the profitability at the
production level and business level.
2. The program should ensure that it establishes accountability, ownership and
service orientation at all level.
3. The key to motive employees is compensation package i.e. direct wages are low
but other benefits are more which are based on productivity. They vary according
to productivity.
4. Compensation helps to retain competent employees in the organization.
5. Attractive compensation package also enhance the competitiveness of the
company.
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CHAPTER 9: LIMITATIONS
1. The study was restricted to main branch of EPCOS India Pvt. Ltd.
2. Due to company’s norms and regulations some of the official and financial data
which was important for my project could not be available.
3. Many times the officials were so busy that they could not answer the queries
related to the topic.
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CHAPTER 10: BIBLOGRAPHY
BOOKS:
P. Subba Rao (2007); Essentials of Human Resource Management & Industrial
Relations; Himalaya Publication House; Mumbai; pp 400-405.
C. B. Mamoria, S. V. Gankar (2007) Personnel Management; Himalaya Publishing
House; New Delhi; pp 432-458
INTERNET SITES:
<http://payroll.naukarihub.com/compensation/direct-compensation.html> assessed on
Monday 9th June 2008
<http://payroll.naukarihub.com/compensation/indirect-compensation.html> assessed on
Wednesday 11th June 2008
<http://payroll.naukarihub.com/compensation/importance-of-compensation.html>
assessed on Tuesday 17th June 2008
<http://www.epcos.com/web/generator/web/sections/components/page,locale=en.html>
assessed on Tuesday 29th July 2008
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