Wages in India

Once jobs have been evaluated and all the points have been summed up, the next step is placing of all evaluated jobs according to points in terms of money. This is the point when rated jobs are translated into monetary values. To conduct wage survey the existing rates are taken for comparison.

The main purposes of wage survey, is to find out the fair for various jobs in order to establish the entire wage structure. Selection of key jobs whose duties are clearly defined, not unstable and mostly representing all level of jobs worth is the very first step in building a wage survey. For the wage survey two types of samples are needed. First sample of key jobs and second a sample of firms in the labor market. Jobs require different personnel, in terms of skill, ability etc and thus it varies from local to regional level. Selection of a sample of firms should be from those firms which operate under similar market conditions.

The job content and available data are carefully analyzed and averaged out, and in this way the rupee values of jobs are prepared and plotted on the chart.

By plotting key jobs against their existing wages, we get a wage trend line lies close to all the jobs plotted on the graph. The wage trend line should be drawn in such a way that it covers most of the points. Those which lie below the line should be paid more to come on the line of best fit. But simultaneously the authority and responsibility should also be increased in line with the wage increase. And as all those which are above the best fit line cannot be paid lower than the existing wage rates all such rates should be freezed.

In construction of wage structure similar jobs are grouped and treated as a job class. All the jobs, which come under that job class are paid the same wage. In the point system, suppose, 120 points to 150 points make a job class. In such case, all the jobs which fetch total between 120 and 150 would carry the same monetary compensation. The purpose of grouping of jobs is to facilitate wage administration.

Factors affecting the designing of the wage structure are:

–Labor market condition: if supply of labor is higher than demand the wage would be relatively low.

–That is, if standard of living is high it calls for higher wage.

–Wage structures of other firms in the same industry directly affect the company’s wage structure.

–Sometimes, even though the competitors pay relatively higher wage, due to weak collective bargaining power of the trade union, management may settle wage at a relatively low rate.

All wages should be paid within limits which are given by the standard set through a wage structure. A cardinal principle of wage and salary administration is that wage rate shall not be cut, as a result of installation of job evaluation. Adjustments in the total rate structure should also be similar to the percentage increment in order to maintain equitable relationship.

Improved method of ranking system is known as factor comparison system where job factors are compared rather than the whole jobs. It consists of the following steps:

–Selection of job characteristics

–Selection of key jobs

–Determination of correct rates of key jobs

–Ranking of key jobs under each job factor

–Allocation of correct  rate to each key job

–Evaluation of all other jobs.

–Designing, adjusting and operating the wage structure

From the employee’s point of view wages determines his standard of living. Wage policy., therefore is an important issue and recognizing  its importance the Constitution of India guaranteed    equal pay for equal work for both   men and women. All workers     living with a wage and conditions  of work which ensure  a decent standard  of life

Minimum wage: Minimum age is that wage which must invariably be paid whether the company, big or small makes profits or not It is the bare minimum that a worker can expect to get for services rendered by him.

In calculating  the minimum wage, the standard  wage, the standard working class family  should be taken to comprise  three consumption units for one    earner, the earnings  of women, children and adolescents being disregarded.

Minimum food requirements should be calculated on the basis    of asset intake of calories for average adult of moderate activity.

Clothing requirements should be estimated on the basis of per capital consumption of 18 yards per   annum which would give 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 age. Fuel, lighting and other miscellaneous items of expenditure should constitute 20 per cent  of the total minimum wage.

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  • Raju

    what is the minimum statewise wage for pharmaceutical industry.

  • Sushma

    Please let me know the new wage applicable effective April 1, 2011 to date

  • Anugupta

    in case feasabile pls give a demo of converting the job into point rating and than the money part

  • Akshay

    what is the minimum gujarat state wage for Chemicals  industry.

  • Satish Chavan

    Also we have to consider inflation rate, CPI that directly affects the cost of living e.g grocery, HRA, fuels, loans (housing , educational, personal loan etc.)

  • Raghavendra

    Thank you very much.

  • Mannranvir

    Pl let me know the min wages of skilled and unskilled worker in Haryana and in Delhi and also the actual meaning of skilled/non skilled worker.


  • Mannranvir

    A person joined the company without deposited any professional/Qualification certificate now after one month said sorry I have lost my all the certificates, sorry, I am unable to provide ,can the company take any action or this is punishable act kindly advice me.


  • Natraj 38

     Hi Ranvir,

    Usually in such cases, the terms contained in the offer letter should be followed. Certificates and testimonials verification is a must at the time of interview and if postponed due to some reason, it is at the discretion of the HR manager and in this instant case, the employee has to produce the certificates and if he says he is unable to produce them, then the company depending upon the employees work put in by him during the one month could  take a decision, but again at the discretion of the HR manager/departmental head

  • Vrajeshkruti

    I am working in an edu. institution. i would like to know the minimum wages applicable in Gujarat for skilled and unskilled staff.

  • Hemlata Maheshwari

    Pl. let me know what is the petrol allowance given in software company in Gujarat


    Yes company will take action after allowing you a substantial time period which may even lead to the termination of your service….

  • Drpartho

    Kindly let me know, what are structure of salaries in Pharmaceutical industry.

  • Moinul Mirdha

    please let me aware of the fact about the current salary graph of software marketing in india

  • Narendra Singh Sisodiya

    I like it.

  • Mannranvir

    Dear All,

    Can you help me about the leave structure of a interior company in Delhi. Nos of days like E/L, C/L and S/L please.

    About the PF and ESI but there is an problem, the employees of the Company is not permanent for an example today joined by someone and after month or two they leave the company without any information kindly suggest me please.



  • Rokendro Nongmaithem

    Why differential wage determine? How wage can be determine differentially to employees of an organisation? What are the  Factors to determine such type of wage?