Punjabi University 2008 M.B.A WAGE AND SALARY ADMINISTRATION - Question Paper

Punjabi University exam WAGE AND SALARY ADMINISTRATION ques. Paper 2008

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

Note : (i) There are 2 parts A and B.
(ii) Attempt any 4 ques. from part A. every ques. carries 15 marks
(iii) part B is compulsory and carries 40 marks.

June 2007

part A

1. explain the main features of reward system. How do the behavioural science theories influence reward management?

2. What is the rationale for job valuation ? explain the different methods of job valuation.

3. elaborate the requirements of the Payment of Wages Act, 1936 in respect of payment of wages ? provide an account of different deductions under the Act .

4. explain the different components of a compensation structure. elaborate the factors that are usually taken into consideration in determining compensation structure ?

5. Attempt any 2 of the following:
(a) Corporate compensation policy
(b) Compensation survey
(c) Minimum wage, fair wage and residing wage

6. explain different allowances and fringe benefits paid to industrial employees as an integral part of their compensation package. provide examples.

7. Write short notes on any 3 of the following:
(a) Tax implications of compensation to employees
(b) Equal Remuneration Act , 1976
(c) Downsizing and VRS
(d) Collective bargaining as a method of wage fixation
(e) Emerging problems and patterns in compensation

part B

8. learn the subsequent case and ans the ques. provided at the end.

The National Manufacturing Company reached an agreement with the Union on a production incentive scheme to increase production. The company had an unprecedented demand for its goods and the Union agreed for the incentive scheme. The management was pleased. with the assurance of the Union leader to personally undertake the task of implementing the scheme. The management promised to provide him a free hand if he could assist in increasing production.

The Union did increase production to alrnost double the original level. As a result, the Union gained importance. Any issue could be sorted out by the Union by its direct access to the Chief Executive. The incentive scheme benefitted primarily the Union members. The scheme was inequitable a few workers got disproportionately large incentives, a few low and a few no incentive at all. The 2nd feature was that as the incentive was linked to the Consumer Price Index (CPI), the distortion got further accentuated. However, when the Union tried to misuse its new obtained powers, the management struck back 1 day by taking disciplinary actions against all the leaders and the Union obtained all of a sudden that it was without a leader.

a different Union arrived on the scene and the leader had established a rapport with the Chief Executive, and this new Union faithfully followed the tenets of the management but as a price extracted a few benefits for its members exclusively. The Union saw to it that production became its exclusive responsibility and it had a hot-line with the Chief Executive for any issue resolution.

As the years passed, the Union started agitating for improvement in the wage scales. Because of the incentive scheme, the company obtained that any improvement in the basic wage would pose greater issues and the primary ques. before the management was to delink the CPI from the incentive scheme. The Union refused to delink the CPI from the incentive scheme as a few of its members were earning an amount equal to, if not more than the salary, as an incentive itself. At the identical time workmen with no incentive and being grade barred began to lose. And this resulted in discontentment amongst the workmen. But the dilemma could not be resolved and this led to an explosive situation.

A 3rd union emerged on the scene and this led to intense inter-union rivalry resulting in indiscipline, loss of production, and violence within the factory premises, as a outcome of which the company declared a lockout.

When the plant reopened after 4 months, the Union in power lost its creditility and th; new Union had the complete support of the workmen. The new Union leader could develop a rapport not only with the workmen bui also with the managementa nd expected the management to solve the issue of not having revised the wage scales for a long period. But this was not an easy task as there were a lot of inequalities that the management wanted to set right.

The union, though agreeing with the management, would not agree for a cut in the wage in any manner to set right the inequalities. The Union not only wanted to cling to the beneficial aspects of the incentive scheme but also insisted that the management somehow provide an increase in the basic wages. The management was being drawn into a vicious circle of the incentive scheme being inequitable but when the Union's attention was being brought to the high incentivec ategories, it reverted to the low basic wage theme. The management remained in a quandry as regards how to convince the workmen, to win over the constituency of workmen and make managers effectlve and regain supremacy in production.

ques. :

(a) Identify the issues and their causes in this case.
(b) Under the provided situation, how are the issues to be remedied ?
(c) Suggest different principles and strategies the management has to keep in mind while formulating a wage incentive scheme for the employees

Earning:   Approval pending.