Salary.

Money Matters - Salary.

This post is about salary. Millions of people across the world rely on income from salary. Job provides salary. It is a reliable income. Most people live their entire life with income from salary. Salary is the driving force of manpower in an organisation. The manpower required for business is acquired by providing adequate salary.

Importance of Salary.

People who seek jobs actually seek salary. Good job means good salary. Salary is the most easy form of money for an individual who qualify for a post. Salary is the fixed amount of money given by the employer to his employee every month as compensation for the work the employee undertakes.

Millions of people prefer jobs rather than doing their own business because a job does not require any investment and so, there is no risk of losing money. The other reason why people seek jobs is that the requirement for manpower in every industry is huge and in a competitive environment, businessmen are willing to pay good amount of money as salary for the right candidate. Everybody cannot become businessman but every businessman needs people who can work for his business.

Salary Perspectives.

Salary is often considered from the perspective of employees because they earn it. However, salary involves two entities - the giver and the receiver. The topic of salary won't be complete if anyone of them is left out. Salary has to be considered from the perspectives of employer and employee. Since employee is at the receiving end, we will discuss them first.

Salary from the Employee's perspective.

Employees perspectives on salary include those things which satisfy his financial needs without straining his body and mind too much. Some of them are:

• An employee works for his employer. His income is his salary. He works for a month and waits for his salary for that month. This is what he does the entire year along with his colleagues.

• An employee being a human being has many dreams and wishes to fulfill, but has only one source for earning money and that is his job which provides his salary.

• Every employee feels that his salary is less. Even a highly paid employee wishes for an even higher salary. As salary is decided by employer, staffs usually have no say in deciding their scale of pay.

• Employees have to obey all rules which the employer articulates. Sometimes rules, which are extremely unbending creates undue pressure on employees. It affects their productivity which in turn affects their salary.

Salary from the Employer's Perspective.

The employer's perspectives are just the opposite of employees.

• The employer employs people for his business. He has an obligation to pay salary to everyone who works for him. He has to arrange funds for salary and he has to do it every month.

• As salary depends on the number of days the employees have attended for work, it is a tedious task for the employer to monitor the performance of each and every employee in his organisation and pay them accordingly.

• Employers sometimes face difficulties in paying salary. It is a nightmare for businessmen when business does not generate adequate revenue. Revenue sustains business. Without adequate revenue, a business will become sick.

• The employer who shows too much consideration for his staff is more likely to be taken for granted and there are stories of many businessmen who got ruined this way.

Inequalities in the Administration of Salary.

Whenever inequalities in salary is discussed, we talk about those employees who are going to feel the pain of being paid less. Remuneration or salary depends on a lot of factors. Inequalities in salary could be due to lack of education, inefficient work culture, wrong selection of job, poor business performance, sociopolitical factors, economic slowdown and so on. Inequalities and shortcomings in salary administration are seen more in the unorganized businesses.

Salary in the Organized and the Unorganized Sectors.

Businesses could be divided into two sectors: organised and unorganized. Those businesses which are in the organised sector have a well defined salary structure. The rules and regulations are well defined in them. Salaries in this sector are competitive and have an advantage over unorganized sector. Delegation of authority is the main advantage in organised sector, which improves efficiency, brings transparency to business and are more likely to follow ethics which is the binding force of trust.

Unorganized sector also do business, but not in a professional way. Getting a job in this sector is easy as there are no formalities to follow. Businesses in this sector have few staff who agree to work for less pay. There are no structured pay scale in unorganized businesses. There are no appraisals or promotions for the staff.

Pay Scale.

Pay scales are not uniform in any industry. Some industries are better in serving salary and some are very poor in this regard which is understandable, because revenue decides everything and it is not the same everywhere. A manager in a 5 star hotel and a manager in an IT company may not have the same salary. A school teacher and a bank employee will have different pay scales. A salaried doctor will have far better earnings than other salaried people. Pay scales change with time. Pay scales increase as the economy grows. Wages and salaries are affected by sociopolitical and geopolitical factors. Salaries are better in cities than in semi-urban and rural areas. Differences can be seen in the remuneration pattern of some developed cities if we compare them. All cities are not alike. Some cities are better than other cities for generating employment and the same is true for villages too. Some villages have more scope for employment and remuneration than others.

Facts About Salary.

There are many aspects of salary which are interesting to note. The demand for educated and qualified people is growing in every field. More and more jobs with good pay-scales are available for aspiring candidates. The days are gone when people used to stick to a company for years, decades and even for their entire life because there were fewer opportunities. Today job seekers have more options to select. Increased competition in every field has also increased salary.

While employers are willing to pay good salary, the attrition of employees has gone up. Attrition has increased in almost all sectors and fields of business. This is a big problem. The time and effort put in to train employees goes in vain when they leave the company. Employers have to be more realistic and flexible in recruitment and retaining staff.

Some points which could be considered as facts about salary are:

(1) Salary helps build work culture: Salary acts as a binding ingredient in workplace. It binds or unites the employer and employee who are mutually dependent on each other. The success of a business organisation depends on smooth functioning of its day to day activities. A good work culture is important for this. Good salary plays a major role in creating good work culture. It helps in retaining efficient employees in an organisation. It helps to promote professional work culture and a sense of responsibility among staff.

(2) Salary sustains employees and jobs: Salary is the bread and butter for an employee. It nourishes the employee and his family. It sustains employees by removing their financial difficulties. When employees feel secure financially, they become more committed to their jobs. Jobs are sustained through commitments of employees.

(3) Salary is a cost for the employer: Salary is a cost for the employer. Salary is the unavoidable expense which every employer has to bear. It is costly. The annual salary is often referred to as CTC, which means cost to company. For the employer who is not making any profit from his business, the salary becomes the most painful expenditure. He faces a grave situation when he is not able to pay his employees. This can happen at any time because, the employer is surrounded by uncertainties. An efficient businessman will try to avoid such a situation by planning in advance.

(4) Salary decides job satisfaction: Job satisfaction for an employee is derived from salary. Nothing is as satisfying as good income. Good salary is a major morale booster for the employees. Good remuneration helps in reducing the attrition of quality staff to some extent.

(5) Profit in business satisfies the employer: An employer is satisfied when his business makes profit. Profit is the key objective of a business. When employees collectively make the business profitable, the employer becomes happy.

(6) Professionalism helps increase salary: A good employee is always valuable for a company. Good employees will always be paid higher than others. Professionalism makes the employee good. Self discipline, dedication, honesty and hard work increases the chances of getting paid higher.

(7) Good salary attracts professional employees: Providing competitive salary, recognition and good working environment are ways by which efficient employees could be hired and retained. Professional employees seek good remuneration.

(8) Businessmen need manpower: Businessmen need adequate and efficient manpower. They need people who can do the job for them. Every businessman needs staff for everything. A successful businessman is one who can rely on his manpower.

(9) Manpower wants money: Manpower want money. They are working for money and salary drives them.

(10) The salary drains quickly for an employee: Salary for an employee is like water in a leaking bucket. The moment it gets filled up, it starts flowing out.

(11) For the employer, the income drains fast as well: An employer pays salary in much the same way. The money his business makes flows out to employees as easily as water flows out from a broken bucket.

Salary will always be a point of discussion for the employer and his employee because it involves both of them. There may be differences in their viewpoints. However, as they are so much dependent on each other, differences should not become an impediment.

Future of Jobs and Salary.

Jobs and salary will always be there. There may be some changes in the way businesses and organisations will function, but salary, as a system, will exist. In fact, it will improve further. It has to be because businesses always need manpower and salary is the only way to get them.

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The previous post was about credit.

The next post is on tax.

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