MS27 Wage and Salary Administration December 2006

MANAGEMENT PROGRAMME

Term-End Examination

MS-27 : WAGE AND SALARY ADMINISTRATION

Time : 3 hours
Maximum Marks : 100
(Weightage 70%)

Note : (i) There are two Sections A and B.
(ii) Attempt any four questions from Section A. Each question carries 15 marks
(iii) Section B is compulsory and carries 40 marks.

December 2006

SECTION A

1. What are the considerations for compensation policy at macro and micro level ? Explain the practical difficulties in translating these policies into action.

2. Give an account of various individual and group reward systems in an organisation. Critically examine the emerging trend in reward system.

3. Explain the institutional mechanism of wage and salary fixation in industrial sector in India. Any system of wage fixation must be judged by how it works in practice. Discuss.

4. Attempt any two of the following
(a) Job evaluation system
(b) Profit sharing and stock options
(c) Corporate compensation policy

5. Write briefly on any two of the following
(a) Salient features of the Payment of Wages Act, 1936.
(b) Salient features of the Payment of Bonus Act, 1965.
(c) Salient features of the Provident Fund Scheme, 1952.

6. Write short notes on any three of the following:
(a) Principles of wage and sabry administration
(b) Competency based compensation
(c) Classification of incentives
(d) Compensation issues
(e) Downsizing and VRS

SECTION B

7. Read the case given below and answer the questions given at the end.

CASE

A financial institution has just decided to open a branch at Bhimunipatnam, an exdusive resort located about 20 miles from Visakhapatnam, a large city. There is no bank at present in Bhimunipatnam.

The financial institution is anxious to determine the appropriate salary for the clerical staff it expects to hire. Clerks in the city office at Visakhapatnam receive a starting salary of Rs. 3,000 per month. As a matter of company policy these salary rates have been set at mid-point of the range for financial institutions in Visakhapatnam.

A survey of local establishments at Bhimunipatnam indicates that the 'going rate' for qualified clerical personnel varies between Rs. 3,500 to Rs. 3,800 a month. This higher rate in Bhimunipatnam may be attributed, in part, to the substantially higher cost of living in this resort town, the limited number of young people seeking employment, and the fact that there are no other financial institutions in Bhimunipatnam. Banks in Visakhapatnam have traditionally paid lower salaries than other establishments, on the ground that banks offer better working conditions and higher prestige.

Questions

(a) Identify the main features of the case in general.

(b) What amount should the financial institution fix as its hiring rate for clerical personnel ?

(c) What factors should be considered in making the decision ?