Help to rewrite or paraphrase with similar wordcount and meaning Determining Wag
ID: 428343 • Letter: H
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Help to rewrite or paraphrase with similar wordcount and meaning
Determining Wages and Salaries
It is important for small business owners to understand the difference between wages and salaries. A wage is based on hours worked. Employees who receive a wage are often called "non-exempt." A salary is an amount paid for a particular job, regardless of hours worked, and these employees are called "exempt." The difference between the two is carefully defined by the type of position and the kinds of tasks that employees perform. In general, exempt employees include executives, administrative and professional employees, and others as defined by the Fair Labor Standards Act of 1938. These groups are not covered by minimum wage provisions. Non-exempt employees are covered by minimum wage as well as other provisions.
It is important to pay careful attention to these definitions when determining whether an individual is to receive a wage or a salary. Improper classification of a position can not only pose legal problems but often results in employee dissatisfaction, especially if the employee believes that execution of the responsibilities and duties of the position warrant greater compensation than is currently awarded.
When setting the level of an employee's monetary compensation, several factors must be considered. First and foremost, wages must be set high enough to motivate and attract good employees. They must also be equitable—that is, the wage must accurately reflect the value of the labor performed. In order to determine salaries or wages that are both equitable for employees and sustainable for companies, businesses must first make certain that they understand the responsibilities and requirements of the position under review. The next step is to review prevailing rates and classifications for similar jobs. This process requires research of the competitive rate for a particular job within a given geographical area. Wage surveys can be helpful in defining wage and salary structures, but these should be undertaken by a professional (when possible) to achieve the most accurate results. In addition, professional wage surveys can sometimes be found through local employment bureaus or in the pages of trade publications. Job analysis not only helps to set wages and salaries, but ties into several other Human Resource functions such as hiring, training, and performance appraisal. As the job is defined, a wage can be determined and the needs for hiring and training can be evaluated. The evaluation criteria for performance appraisal can also be constructed as the specific responsibilities of a position are defined.
Other factors to consider when settling on a salary for a position include:
- Availability of people capable of fulfilling the obligations and responsibilities of the job
- Level of demand elsewhere in the community and/or industry for prospective employees
- Cost of living in the area
- The attractiveness of the community in which the company operates
- Compensation levels already in existence elsewhere in the company
Explanation / Answer
There is a clear difference between wage and salaries. The difference is important as these two words are used for different types of employees. The one is the executive class or employees with managerial or high position in the company and they hold a designation in the company on merits and skills. These employees are generally not protected by welfare labor legislations. However court always tends to favor these employees as well in a suit between the company and employee as the company is at dominant position.
The other type of employees is those receiving wage and not salaries and thus these are protected workmen and receive the benefit of various welfare labor legislations like which might describe the minimum wage that these people should receive no matter what qualification they hold or skills they poses. These people are not in executive position or at managerial position. The courts always look at the nature of job the people carry at company to determine whether the person falls under the protected class of worker or not.
The understanding of these differences are important to company as these things if ignored might lead to legal issues at future which might be a loss deal for the company so the company has to decide in advance as to what they pay and whom do they pay.
Setting the wages for employee is big thing for the company to do. Generally it is set to motivate and make sure that employee gets attracted and remain dedicated to work and company as it is paying good amount. However, the compensation shall be equal or reasonable to the labor one puts into the company. The human resource also plays important role in deciding, analyzing the market, and assess various factors to set the wage of the employee. Other factors may include surveys, cost of living at around workplace, demand and availability of candidate for job, market competitive salaries etc. that helps to set the salaries.
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