Factors Job-A Job-B Job-C Job-D
Education 5 10 15 20
Training and experience - 5 10 10
Skill 10 20 30 25
Efforts 20 15 - 10
Responsibility 5 10 20 30
Working conditions 20 15 10 10
Total points 60 75 85 105
II. GRADING AND PAY SCALE
Points range Grade Monthly pay-scale (Rs.)
40- 70 IV 1000-50-1500 71 - 90 III 1400-100-2400 91 - 100 II 2000-150-3500 101 - 110 I 3000-200-5000
The point rating method is very simple to understand and operate, but the assignment of points to the factors are arbitrary and may differ from person to person. To obviate such weakness, it may be required to collect a number of observations and then remove the element of business from the results.
Factor Comparison Method
Like point rating method, this method also considers a few key factors common to a few key jobs which are evaluated. The key jobs at each level within the existing wages/salaries structure are ranked against each factor at a time. Instead of ranking them as a whole, each of the factors is assigned by adding up the money value of all factors. All other jobs are evaluated against the key jobs on the basis of money values assigned to various factors in the key jobs.
Merit Rating
Merit rating is a systematic evaluation of an employee’s personality and performance by his
superior in his existing job. The assessment is made to find out the worth of each employee considering his suitability on the job in relation to various factors, namely,—
(a) Education, training and experience, (b) Job knowledge,
(c) Initiative and aptitude for work, (d) Cooperation,
(e) Attendance and discipline, and (f) Ability to get along with others,
It will be evident that some of the factors are directly related to the employees work, while others are not related to his work but his association with others as a member of the group or organisation. Points are allotted to each factor and the total points scored will be his merit rate. The object of merit rating is to reward an employee on the basis of his merit. Increments and promotions are the normal outcome of merit rating system.
Merit rating is different from job valuation, as the former rates the employees on the job, while the latter rates the job itself. Job evaluation is the assessment of the relative worth of jobs within an organisation, while merit rating is the assessment of the performance of employees in relation to their jobs. Job evaluation helps to set up a rational wage and salary structure, whereas merit rating helps to determine fair wages for each employee.
Further advantages of merit rating system are noted below: .
1. Since reward is related with merit rating, it acts as an incentive to the workers to improve himself as well as his productivity.
2. Merit rating creates competition among member of staff and workmen.
3. It eliminates discrepancies among workers by linking reward to merit, and hence, tends to improve labour relations and reduces labour turnover.
The only limitation that merit rating system suffers comes from human factor involved in deciding the points. Thus, the rating may be arbitrary, influenced by past records, and therefore, may not attract the workers.
3.8 PAYROLL PROCEDURE
Salaries and wages are prepared in payroll department, which is normally a section of accounts department. All permanent records of an employee is maintained in the payroll department starting from his letter of appointment and report of resumption of duty by the departmental foreman concerned. Periodical change in wage rate arising out of normal increment or promotion is intimated by the personnel department. Thus, all permanent details such as name, token No., department, wage-rate, provident fund membership No., E.S.I.C. No. etc. are recorded on the wages sheet in advance i.e. before the details of actual work during the wage-period are prepared by Personnel department, and sent to payroll. When wages are paid on the basis of time, Time-Cards are sent to payroll department after tallying the hours present with hours worked and idle and rest time. Similarly, piecework cards are authorised by the department concerned certifying accepted units of production and such cards form the basis for wage payment under Piece-rate. For monthly paid staff, a copy of the attendance register is sent to payroll department for the preparation of wages sheet.
A third set of information is sent to payroll department for various deductions to be made from the wages. It is important to note that deductions from wages are required to be authorised. Some of the deductions are statutory viz. income-tax, professional tax, E.S.l .C. contribution, provident fund contribution, etc. Other allowable deductions are house rent, cooperative society dues, advance taken by workers, etc.
Prime Cost
Payroll is prepared with the aforesaid information either serially by token numbers or department wise. It is advisable to prepare departmentwise payroll due to the following advantages :–
a) Payroll preparation work can be divided. b) Departmental labour rate can be developed. c ) Reconciliation can be easier.
d) Wage payment can be made in respective departments with the payroll. e) Assist in the preparation of budget and control of departmental labour cost.
In the payroll, the employee’s name, ticket No., hours worked - normal and overtime, Wage rate and dearness allowance rates shall be mentioned. His gross earnings shall be computed with each component such as basic wages, dearness allowance, overtime wages, overtime premium, house-rent allowance, shift allowance, attendance bonus, incentive bonus, etc. Similarly, details of all deductions and net wages payable are indicated. Payee’s signature is obtained against net wages figure. A specimen of wages sheet is reproduced below :–