Wages and Salary Management

Reg. No: 0755301

Roll.No.122

A
PROJECT REPORT
ON
WAGES & SALARY MANAGEMENT AT HOSPET ISPAT
PVT LTD
ALLANAGAR, KOPPALA

Submitted to Gulbarga University Gulbarga in partial

fulfilment of B.B.M Degree for the Academic year
2008-09 by student of B.B.M. Final Year

Submitted by
Name

Kotraiah.A.M.

Class

B.B.M. Final Year

Address

Vijayanagar College, Hospet.

Under the Guidance.

Dr.M.J.Basavaraj

M.com, Ph.D

Selection Grade Lecturer

& Head

Department of Commerce and Management

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Vijayanagar College, Hospet -583 201Academic Year

2008-2009.

CERTIFICATE
This is to certify that Kotraiah. A.M, Student of B.B.M. Final year
of Vijayanagara College has undergone In Plant Training at
HOSPET ISPAT PVT. LTD. ALLANAGAR. On the topic
WAGES AND SALARY MANAGEMENT.
He has prepared PROJECT REPORT under our supervision
and guidance.

Principal
Vijayanagara College,
Hospet.

Co-ordinator
Department of Commerce
& Management
Vijayanagara College,

Hospet
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As Kotraiah.A.M, here by declares that the project entitled

Wages & Salary Management was projected in Hospet Ispat
Pvt. Ltd., Allanagar, Hospet, which I the result of my own
effort under the guidance of Mr. Thirumala Reddy, (HR
Manager), Dr.M.J.Basavaraj M.com, Ph.D (Lecturer & Head,
Department of Commerce and management studies,
Vijayanagar College) in the in-plant training that I have under
gone as a part of curriculum leading to the award of Bachelors
Degree in business management.
I also declare that I have fulfilled to some extent all the
provision of convenient governing of In-Plant Training.
This is further to declare that I have not submitted this project
report for the award of any other diploma or degree course
elsewhere.

Place: Hospet
Date:
Kotraiah.A.M.

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The successful accomplishment of any task is incomplete without

acknowledge the contributing personalities who both assisted and
inspired and lead us to visualize. The things that can turn them into
successful of our successors.
At the outset, I would like to acknowledge my sincere gratitude and
thanks to Mr. R.P. Prakash & Mr. R.P. Sharan Basaweswar,
M.DS of Hospet Ispat Pvt. Ltd., Allanagar,KOPPAL and all the
staff for their constant support and guidance, which was certainly
a motivating factor towards the successful completion of the
project. I wish to place on record my profound indebtedness and a
deep sense of gratitude to Mr. Thirumala Reddy (Deputy HR
manager) who were very much supportive and constant source of
help for my project.
I am thankful to Dr.R. MaregowdM.Com, M.Phil,Ph.D,FDPM(IIMA) principal of
VNC, Hospet and all learned faculties for giving me the opportunity
to do this project.
I would fail in my duty if I forget to acknowledge and thank our
most beloved faculty and my internal guide Dr. M.J.Basavaraj, M
com, PhD, (Lecturer & Head, Department of Commerce and
management) for his constant encouragement high inspiration,
valuable guidance and his personal involvement in making this
project a success.
My expression extend unbounded which is to thank my most
beloved Parents and my brother and sister and all my other family
members and my loving friends who have been always a moral
support and strong pillars at all walks of my life, at every stage
with cheer enthusiasm I dedicate my work to them.

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At last, I wish to express my sincere gratitude to one and all that

who have helped me directly or indirectly for my project.
KOTRAIAH.A.M.

CERTIFICATE
This is to certify that, report entitled Brand Awareness of
Omkar packaged drinking water in Hubli city at
SANKESHWAR MINERALS PVT. LTD.

has been prepared by Mr.JADESH.K.M. Under my

guidance and supervision, this project embodies the result
of him effort. Investigation and visits to the various
departments concerned.

Date:

Guide
Place: Hospet

Mr. SIKANDAR BASHA.

MBA.

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Dept. of Commerce &
Management
Vijayanagar College, HOSPET.

CONTENTS
I.

Chapter
INTRODUCTION

II.

Objectives of study.
Design of the study.
Methodology and limitations.
Chapter

COMPANY PROFILE

Company Profile.
Objective of the Company.
Boards & Directives.
Vision Mission
Production.
Raw Material.
Machinery.
Information System
Man power.
Marketing Area.
Stock House.
Competitors.
Departments
Organization Chart.
Job Description of HRD.

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III. Chapter
POLICIES

Human Resource Policies

Recruitment Policies
Selection Policies
Safety Policies
Quality Policies
Quality Objectives
HR Plans

IV. Chapter
THEORETICAL FRAME WORK

V.

Introduction.
Wage SYSTEM.
Objectives.
Theories of Wages.
Methods of payment.
Principals of Salary Fixation.
Incentives
Chapter

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WAGES & SALARY MANAGEMENT

VI.

Method
Advantages & Disadvantages.
System of Salary Distribution.
Pay Slip.
Principal of Salary Fixation.
Leave
Facilities to employees
Distribution of Salary
Annual Attendance.

Chapter
FINDINGS & SUGGESTIONS

Findings & Suggestions.

SWOT analysis

Bibliography.
Questionnaire.

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CHAPTER-I

INTRODUCTION
Industries are the most vital of all sectors to all
the economies of the world whether developed or
developing; industries provide support to the
agriculture on one hand and on another hand produce
goods and by exporting these goods earn foreign
currency for the country. Thus they also be called as
the backbone of the economy. The establishment of
the industries demands many facilities such as power,
communication system, transport facilities, nearness
to market and to the source of raw materials and
several other facilities. The need for power and
communication facilities gave birth to the electronics
industry the industrial revolution took place in 17 th
century in Britain. The industry initially operated with
coal as fuel but in late 18th century with the birth of
iron industry all this changed. Now the industries
became more inclined towards iron.
With the passage of time the involvement of iron in
ones life has become inevitable. All of us in some
form or other, directly or indirectly are consuming
iron materials, iron has made life simpler. For
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example consider earlier the transport vehicles made

by wooden material would exist at least 1-2 years but
now with the arrival of iron made vehicles can be
exist for long period.
Because of such a wide applications of iron products
there are several producers in different fields of iron
production.
We have kirloskar, Tata, jindal, mittal etc, what this
competition does is it gives the consumer the goods
with better quality at an affordable price. That is why
this industry is growing rapidly in the world.
Another reason for the wide scope is due to the fast
improvement in the technologies. The large number
of the consumers in India has given too many
investors to invest in India. The study is carried on in
the company by collecting information from various
heads of the department.
OBJECTIVES OF THE STUDY

To know the HRM department functions

And structure of Hospet Ispat pvt Ltd
(HIPL)

To know the system of wages and salary

Distribution to employees in HIPL

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To know the practical aspects of an

Organisation (HIPL) and thus increases

Managerial skills
To relate theoretical knowledge with

Practical

DESIGN OF THE STUDY

The

industrial

competition
resources

organization

requires

human

management

is

face

global

resources.

helps

the

Human

employees

to

perform the job effectively.

In any organization in order to have a smoother
and efficient flow of working and for the progress of
any

organization

the

first

and

the

for

most

consideration to be given.
Should

be

towards

employees

of

the

organization the same the progress become standard

comes to a pause and downfall which may load to
shutdown.

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METHODOLOGY
The methods adopted to study the salary and
wages in Hospet Ispat (pvt) ltd. At the time of study
analysis of the salary and wages and I randomly
selected the employees and done project successfully.
The field study:
The study was conducted at HIPL, Allanagar in
HRM department.
Source of DATA
Primary

as

well

secondary

data

has

been

collected for the purpose of the study.

Primary data:
Primary data is collected from the personas
interview with the officers.
Secondary Data:
It is collected from company profile and with the
help of the records of the current year.

LIMITATIONS

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The study of the plant is restricted only to workers

and officers of the HIPL.

Due to time constraint detailed study was not

possible.

Lack of communication with employees.

Because of their busy schedule employees were not

able to provide the information asked for.

CHAPTER-II
COMPANY PROFILE
HIPL is started from 21/12/2004 with investment of
Rs.31 corers. The founder of this company is Mr.Vinay Biyani
and Mr.Suresh Kumar Lakhotia.
It has certified under 149(3) of company act 1956, firstly
it is established by public but now it transferred to private
limited company. Its licence no. MY/KPL-26.
It has fully purchased by R.P.P. Mines Hospet. The M.Ds
of HIPL are Mr. R. Prakash and Mr. R. Basaveswara who
are brothers.
Hospet Ltd. Converted into Hospet Ispat Pvt. Ltd., in
2007 April.
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The location of HIPL

The location of the company is good for normal business
activities especially it is 2 Km away from NH-63 and 12 Km
from Koppel and 20 Km from Hospet.
Address of the HIPL
Sy.no2 ALLANAGAR, BAGANAL ROAD
TQ&DIST KOPPALKARNATAKA
INDIA

Reason for selecting location:

Special economic zone.

Consumer for HIPL product like Kalyani etc.

Close to Iron Ore Belt.

Near to River of Thungabhadra (20.km).

Low cost of transportation (NH-63, Railway etc)

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OBJECTIVES OF THE COMPANY

To carry on the business of importers, exporters,
manufacturers and reseller of coke, fire baiks
mortars, magcarbons bricks and grog all types of
high carbons, medium carbons, low carbon, ferro
alloy, all types of refectories lancing pipes, EBI
mass, caseables, calcined petroleum coke, raw
pertolieum coke graphite flake graphite electrode,
ferros, non ferrous steel and its product.

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To carry on the business as manufactures resellers,

importers exporters of heat treatment plants and
marcling job of all types.

To

generate

purchase,

accumulate,

sell

and

transmit,

supply

distribute,

electricity

from

conventional non-conventional energy sources on a

commercial basis and to construct lay down,
establish,

operate

and

maintain

power/energy

generating stations, power plants and plants based

on

conventional

or

non-conventional

energy

sources solar energy plants wind energy plants and

similar projects.
To repair process, assemble, procure buy, sell,
alter, improve, exchange, let out on hire import,
take on lease, factories, works, plants machineries,
jigs,

disks

equipments,
apparatus,

moulds, material
fixtures,

fittings

handling systems
tools

appliances,

frodults and all kinds of vehicles,

capable of being used in the business which the

company is competent to carry on or required by

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the customer or persons having dealings with the

company.

To buy take on lease on licence or otherwise to

acquire lands and to acquire in any manner or to
construct, erect, alter, build, renovate, decorate,
maintain roads, streets, brick works, factoris sheds,
buildings, flats, houses, shops, showrooms, offices,
warehouses, mid floor, landings tents and other
temporary or permanent structures for the purpose
of the business of the company and to demolish,
re-erect and to alter or otherwise deal with land
and buildings in possession or belonging to the
company or in respect of which the company has
power in any manner to deal with.

To purchase acquire or under take or take the

where or on part of few business, professions,
goodwill, property, contents, agreements, rights,
privileges effects and liabilities of any person, firm
or company carrying on proposing to carry or
ceasing to carry on any business, profession or
activity which the company is authorized to carry
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on upon such terms and subject to such stipulation

and

conditions

consideration

and
(if

at
any)

or
in

for

such

price

money,

of

shares,

debentures, moneys worth or otherwise as may be

deemed fit.

To borrow or raise money or secure the payment of

money or to receive money on deposits whether as
secured loan and or unsecured loans with or
without interest with or without right, consent such
borrowed monies into shares of this or any other
company or otherwise in such manner as the
company may think fit and proper and in particular
by the issue of debentures debenture stock, bonds
either convertible into share of this or any other
company or otherwise or perpetual debenture
annuities, and in security of any such money so
borrowed or received to mortgage pledge of charge
the whole or any part of the property, assets or
revenues

of

the

company

present

or

future

including its uncalled capital, by special assignment

or otherwise or to transfer or to convey the same
absolutely or to create interest and to give the
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lenders power of sale and other power as much

deem expedient and to purchases, redeems or pay
of any such loans, debentures, debenture stock,
bonds deposits, subject to payment of principals
and interest in a manner to be stipulated in relation
to issue of such debentures, debenture stock,
bonds or acceptance stock, bonds or acceptance or
such loans, deposits and subject to the provisions
of law in this regard.
To pay of the funds of the company and the issue
of its show capital, debentures, debentures stocks
bonds, other securities and acceptance or renewal
of deposits including brokerage and commissions
for taking placing shares debentures, debenture
stock bonds, deposits or other securities of the
company.
To draw, accept and make to endure discount or
negotiate or transfer promissory notes, handiest or
bills

of

exchange,

bills

of

lading

and

other

negotiable instruments in connection with the

business of the company.

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To establish branches offices and appoint agents,

dealers,

selling

agents

sale

selling

agents,

representatives in India or in any part of the world

for in connection with any other person, individual
firm,

association,

corporate

body,

government

semi-government or any statutory authority.

To carry on the activity of iron masters, iron

founders, iron workers steel makers, blast, electric
and ferrous non-ferrous founders, metal makers,
alloy makers, galvanizers, welders, enamellers,
platters, cutters of metals, stones, precious stones
and inorganic substance.
To carry out in India or any part of the world all or
any of the object as principals, agents, factors,
trustees, contractors or otherwise with any other
person,

individual,

firm

association,

corporate

body, govt. semi govt or any statutory authority.

To design manufacture produce, process, develop,

re-condition,
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alter,

repair,

improve,

fabricate,
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substitutes on hire or otherwise deal inflows proof,

explosion proof and general purpose electrical
electrome chanical or electronic instruments and
equipments panels and the spares, accessories and
fittings aged there in.
To

design

manufacturing

fabricate

assemble

machinery work on process, repair, alter, convert,

on process, repair alter convert buy deal in import
export or consult for plants machineries such
assemblies, machine parts, tools, jigs, gauges,
instruments, appliances, components, accessories
and finished or semi finished engineering products
for industrial agricultural or domestic use.

BOARDS & DIRECTIVES IN HIPL.

Sl Departments
No
1
Managing
Directors

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Names

Join

Resign

Mr. R. Prakash
2007
Mr. R. Sharana
2007
Basaweshwara
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H.R.
Department
3
Accounts
Department
4
Dispatch
Section
5
Machinery
Section
6
Environment
Dept.
7
Stores
Department
8
Electrical
Dept.
9
Lab
Department
10 RMHS
11 Security
Department

Mr. Thirumala
2008
Reddy
Mr. K. Purushotham 2007
Reddy
Mr. Murali Babu
2007
Mr. Siddalingappa

2008

Mr. Somaiah Poojari 2004

Mr. Vishwambara

2004

Mr. Dhanjaiah

2008

Mr. R.V.S.N. Murthy 2004

Mr. Devaraj
Mr. D.J. Jayashilan

2008
2004

VISSION

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To be a world class product leader through the

state of the art manufacturing technologies and
processes.
MISSION
HR department will facilitate achievement of the
highest

level

of

organization.

Productivity

by

achieving cost effectiveness in administration activity

and by sourcing the best human talent available.
And add value to them through practice prompt
and continuous programs by realization of employer
potential to achieve excellence in company business,
results through these programmes will end ever to
ensure in fulfilling a quality of life to the employee.

Production:
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HIPL produces Sponze Iron which is semi

finished goods.
It requires to manufacture steel almost HIPL is
using modern technologies of production.
Through this they are manufacturing 200 tonnes
per day. The sponze iron costs Rs.25, 000 per ton.

Raw Materials:
To produce Sponze Iron they require raw
materials as follows:
1. Iron Ore (Fe2O3) (4 to 18 mm).
2. Coal (4 to 18 mm)
3. Dolomite / Lime Stone (0.2%).
To make ready Sponze Iron they are heating
Iron Ore by coal and Diesel and after completion of
first process they want to remove sulfer constraints.
So what they are using lime stone.
Raw material has tested by company
laboratories

Coal Product - Proximate analysis.

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The testing of coal it must contain like Ash, VM,

FC, which is satisfying to company required that will
take grade A.

Iron Ore

Test of Iron Ore it contains Fe, Cilica, Alumina,

CaO, MgO. So Fe must be present in Iron Ore above
60%. This ore called as good up to 68% above.
But bellow the 60% of Fe it is called low quality
and requires lot of raw ore of Iron to produce, and
cilica, alumina, CaO MgO, bellow 10%. Hematite Ore
(Fe2O3).

Source of Raw Materials:

HIPL has been going to supply of raw material
from these sources.

Iron Ore

- R.P.P. Mines, Hospet.

Coal

South Africa, Indonesia,

South Korea, & Singapore.

Lime Stone

- Lokapura which comes

under Bagalkot (Dist).

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Machinery:
1. Kiln
- 42 Mtrs long.
- 10500C requires melting Iron Ore.
2. Cooler.
3. Cranes.
4. Crushers.

Information System
1. Tally:
To maintain accounting records.
2. Auto CAD:
To make sketches, Drawings etc.
3. Matt Rick System:
To make attendance of employees by pressing
their thumb on machine.
4. Normal Windows Software:
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MS-Office required for official uses.

Man Power:
Man power is major aspects of any business or
organizational activity. Without man no production
and no business. So at all work, all activities of
business

is

organization.

depending
Success

on
of

manpower

every

of

the

organization

is

depending on man power of that organization.

Man power or human resource of HIPL is very
good.

They

have

177

workers.

172

are

male

employees and remaining 5 are female employees.

They divide workers according to their skill,
knowledge, qualification and work. They are totally 3
types of employees.

Technical.

Non-Technical.

Labour Group.

1. Technical: The Technical workers are the base of

production. They must qualified as any technical
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course

like

BE,

BSc,

ITI

etc.

The

workers

or

employees of technical are:

Engineers.

Section or shift in charge.

Lab Attainder etc.

2. Non-Technical: Non-Technical employees are

those whoever comes or works all related jobs of
marketing,

store,

dispatch

accounts,

security,

management etc.
The majority of workers in HIPL are NonTechnical workers because technical workers are
doing their work in production but, non technical
workers are handling all related work of organization
non technical workers are:
- Management.
- Security
- Accounts
- Stores
- Marketing etc.
Requirement of employees is depending of their
work.
3. Labour Group:

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These are the employees of HIPL who works

under or who works as assistant of employees.
They are just for normal or minor works as
cleaning helping etc.

Employees Strength:
There are 177 employees and there are 65
labours

in

the

administration

factory.

section?

Who

The

works

working

in

the

hours

for

employees are 8 hour and who works as general,

working hours 8 to 12.
The company holds 4 shifts per day.
Sl.
No.
1.
2.
3.
4.

Shift
A
B
C
D

In time
06:00
02:00
10:00
08:30

am
pm
pm
pm

Out time
02:00
10:00
06:00
05:30

pm
pm
am
pm

Wages are given on time basis. The wages are

given before 10th of the month. The salary is paid

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directly to the employees through cheque or by

credit the amount to employees bank account.

STOCK HOUSE
The stock house of HIPL is made up as their
average of turn over. They can store 850 tonnes in 1
bunker. It includes
1. Two bunkers of Iron Ore.
2. Two bunkers of Coal.
3. Three bunkers of coal fines.
Totally 7 bunkers are existing in plant.
MARKETING AREA
Company produces semi finished material or we
can call as raw material for steel makers. So there is
no need of market their self just they are receiving
order from other companies and manufacturing as per
as their requirement.

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There is much demand for sponge Iron in todays

market but they are receiving order as per their
capacity (100t/p).
Mainly they are marketing their products to
1. Pune-Kalyani Corporation.
2. Ahmadabad.
3. And

for

companies

such

as

Kalyani

Steel

industries etc.
These are the permanent customers to company.
COMPETITORS
The

following

are

the

competitors

to

the

company.
1. Hare Krishna Company.
2. Druvadesh Company.
3. HKT Company.

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DEPARTMENTS OF THE COMPANY

Department
HRD
Accounts
Dispatch
Mechanical
Stores
Civil
Electrical
Lab
Pay load
Product house
Security
Weight bridge
Drivers
RMHS
Total
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No. of Employees
04
08
02
30
06
12
21
24
16
03
26
04
06
15
177
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ORGANISATION CHART
Managing Director

Plant in-charge

General Manager
(Works)

Manager
(Maintenance)

Manager
(Electrical)

Manager
(Production)

Manager
(QA/Cal)

Manager
Accounts

Manager
H.R/Admin

Manager
Marketing

Manager
stores

Shift in-charge

Shift incharge

Shift in-charge

Shift incharge

Accountant

Assistant

Assistant

Assistant

Fitter

Electrician

Assistant

Chemist

Assistant

Helper

Helper

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JOB DESCRIPTION OF HR MANAGER IN HIPL

Job title: HR Manager and Administration officer
Location: Office
Supervision: As per standing orders
Equipments: Computer, Telephone, Mobile phone etc
Supervisors And subordinate: HR assistance
Salary: Around 10,000
Condition of work: Time 9.00 and to 6.00 pm with
one hour lunch
Promotional channel: Internal promotion.

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CHAPTER-III

POLICIES
HUMAN RESOURCE POLICIES
The following are the some of the policies:
1. Recruitment and selection.
2. Training and development.
3. Job analysis.
4. Salary administration
5. Performance appraisal.
6. Governance.

RECRUITMENT POLICIES:
1. Provide formal statement of corporate thinking.
2. Establish consisting in application of policy over
a period.
3. Offer guidelines to manager for thinking action.
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4. Improve communication and secure co-operation

from employee.
5. Provide

criteria

(measuring

yards)

for

performance evaluation of persons involved in

recruitment.
6. Build employees enthusiasm and loyalty and
increase their confidence.

SELECTION POLICIES:
1.

Selection Criteria.

2.

Selection process.

3.

Decision-making.

4.

Communication.

SAFETY POLICIES:
Safety and health measures implemented for the
study of workman mentioned below
1.

Safety Shoes.

2.

Safety Helmet.

3.

Nose Mask.

4.

Safety Goggles.

5.

Ear plugs.

6.

Jogger (0.75 gar/month)

7.

Safety belt for high level.

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8.

Aprons upper works.

9.

Safety hand glows.

10.

First aid facility.

11.

Medicine checkups (every week)

12.

Safety awareness programmes.

13.

Hygienic fob in canteen.

QUALITY POLICIES
Hospet Ispat Manufactures and
supplies Sponze Iron and are committed to
Understanding & Meeting Customer Requirement
Continually improve product process and system
to satisfy customers, employees, stake holders
and other interested parties.
Involve people at all levels to achieve
organizational objectives.

Derived

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Date: 02nd August 2007.

Managing
Director.

QUALITY OBJECTIVES
Enhance customer satisfaction.
Effective Planning, provisions and utilization of
resource.
Continually improvement or process.
Providing, Training and Motivating Employees
at all levels.
Improving reliability of suppliers.
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Ensure safe working environment.

Derived
Date: 02nd August 2007

Managing
Director.

HR PLANS, PROGRAMMES AND ACTIVITIES

Sl.
No.
1.

2.

Derivative Plans
Acquisition plan

Absorption plan

Programmes

Activities

HR planning

HR Inventory, HR

requirements

Forecast, Job analysis

Selection,

etc.
Markets Survey and

Indication,

advertisement,

placement,

consultant,

workers, trainings.

employment
exchanges, selection
process, selection
texts induction,

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3.

4.

5.

6.

7.

8.

Development

Management

training socializing.
Off the job training

plans

development,

evaluation, career

carrier

stage.

development
Promotion transfer

Analysis and

etc. wages and

dimension resource

salary

levelling, evaluation of

Maintenance

administration
Discipline rewards

job.
Redress of grievances

plans

and benefit

(ROG) Merit rating,

Retention plans

programme
Incentive scheme

annual confidential.
Reports work, study

performance

time, standard

appraisals
Rewards moral and

feedback
Leadership/

motivation steps

supervision on duty

safety programme,

intervention safety

welfare

week safety.

Empowerment

programme.
Participation, social

Works committees

plans

security scheme,

W/M Housing

attitude, survey,

committees,

intrinsic motivation

Operative MBO

steps

Hospital facilities,

Utilization Plans

Motivation plans

insurance cover,
retirement benefits,
work redesigning,
work reschedule.

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CHAPTER-IV
THEORETICAL FRAMEWORK OF WAGE AND
SALARY MANAGEMENT
INTRODUCTION
A sound wage policy is an essential part of personnel
management the employees working in any unit expect that
any wage differentials that exist in a plant are due to
favoritism, lack of uniformity or judgment between supervisors
in granting increases or the result of the "Squeaky Wheel
getting the grease". They expect wage rates to be consistent,
dissatisfaction is prevalent and grievances over wages are
common. The task of wage administration is to iron out the

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grievances of the workers and provide them contentment. The
usual function of the wage administration department may be
summarized a below:
Aid information of wage and salary policies.
Analysis and classification of hobs according to their
requirements.
Wage and salary survey.
Employee merit rating.
Approval of wage rate changes.
Studies of the wage incentives, profit sharing, cost of
living, bonuses, and other special wage plants, on the
morale and performance of employees.
Wage theory.

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ESTABLISHING A WAGE SYSTEM

All wage systems must satisfy the basic needs of
the employees for food, shelter, clothing and a
reasonable enjoyment of life. The wage earner should
regard his earnings as equitable compensation for his
efforts. Because of fluctuation in the price level of the
things that his earnings will buy, he is interested in
his 'real wage', that is the buying power of his 'money
wage'.

If

price

level

rise,

management

should

consider adjustment of the cost of living, provided

such adjustment is feasible because of a simultaneous
increase in the proceeds from an enterprise.
TERMINOLOGY AND CONCEPT
What is wage and salary management?
Wage and salary management is essentially the
application of a systematic approach to the problem
of ensuring that employees are paid in a logical,
equitable and a fair manner.
WAGE:
The term Wage is "the remuneration paid by the
employer for the service of hourly, daily, weekly and
fortnight employees".

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SALARY:
The term salary is defined as the remuneration
paid

to

the

clerical

and

managerial

personnel

employed on monthly or annual basis.

OBJECTIVES OF WAGE AND SALARY MANAGEMENT
1. To acquire qualified and competent personnel
2. To retain the present employees.
3. To secure internal and external equity.
4. To ensure desired behavior/output.
System to achieve the objectives:
1. Job evaluation.
2. Wage and salary ranges.
3. Wage and salary adjustments.
The Elements of Wages and Salary system:
1. Relating salary to needs and goals.
2. Developing quality, quantity and time standards
relating to work and goals.
3. Measuring the actual performance.
4. Determining

the

efforts

necessary

to

achieve

standar

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TWO THEORIES OF WAGES:

a) The Classical theories of wages.
b) Modern theories of wages.
A)

THE CLASSIC THEORIES OF WAGES:

1. Wages fund theory: according to Adam Smith, a

pre-determined

fund

of

wealth

existed

for

the

payment of wages. The fund was the surplus income

of wealthy man.
What they could save beyond the needs of their
families and trade. This was their capital which they
could use to employee others for more economic
activities if the fund was large, wages would be high,
if small,

and wages

would

be

reduced

to the

subsistence level.
2. Residual Claimant Theory: the theory is that
there were four factors of business activity i.e., land,
labor, capital and entrepreneurship. The shares of the
landlord, of the capitalist and of the entrepreneur
where determined independently and taken out of
what business produced, leaving the form of wages.
These make labor the residual claimant, the idea
since priority-wise, labor had the lowest choice.

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B) MODERN THEORIES OF WAGES:

1. Bargaining theory of Wages: The bargaining
theory pre-supposes that there is range of wage rates
and

conditions

of

work

that

have

financial

or

monetary implications. The upper limit of this range is

that beyond which the employer cannot go for he
would then have to shut down his business. The lower
limit is set either by the minimum wages prescribed
under statutes like minimum wages act.
2. Behavioral scientist on wages and salaries:
The economic theories of wages, whether classical or
modern, cannot fully explain the various phenomena
or pressures or process that lead to wage and salary
fixation, revisions or their administration. Some of the
gaps in our knowledge of the operation of these
factors are provided by the studies, research, action
program's etc., conducted by behavioral scientists,
notably industrial psychologists and sociologists.
1. The employment's acceptance of a wage level.
2. The internal wage structure.
3. Wage and salary as motivators.

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PARAMETERS OF A COMPANIES WAGE POLICY:

Up to date as many as 24 wage boards have
been setup by the Central Government and several by
the State Government.
a) Principal of external and internal Consistency:
However, for the Wage and Salary administrator
the theories or the practices of external consistency
and internal consistency remain obviously valid. The
wage board machinery also gathers such comparable
data.

So

while

the

arrangement

of

external

consistency enables some employers to refuse to pay

more, generosity on the part of one employer gives
an opportunity to the trade unions to apply the
technique of "Coercive comparison" to pressurize the
resisting or less generous employer.
A Micro level wage policy:
1. However,

every

industrial

enterprise

aims

at

evolving with a good of deal of pragmatism, no

doubt, a discernible or workable wage policy, such
a policy seeks.
2. To define the value of all jobs in relation each other
within the company.
3. Tries to ensure that the employees to reach his full
earnings potential.

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4. To enable every employees to reach his full

earnings potential.
5. To

ensure

that

the

employees

share

in

the

companies gain in productivity.

The characteristics of an efficient wage and salary
management generally are:
1. The wages and salaries offered must be such as to
attract the skills required by the organization.
2. Prompt and correct payment of the dues of the
employees

must

be

ensured

and

arrears

of

payment should not accumulate.

3. As for the mechanics of wage revision within the
organization,

to

the

extent

feasible,

wage

revision committee should always be preferred to

the individual judgment, however unbiased, of a
manager.

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METHODS OF PAYMENT
The compensation that an employee can expect
for his work is based either on the length of time at
work or on the production of the worker. The first
method is usually characterized as day work because
the rate of pay is most usually by the day, or per
diem. The second is usually called piece work because
compensation is bought the piece or job. All other
wage systems are combination of these two principles
in varying proportion, some of the combinations are
occasionally

termed

as

"Profit

sharing

schemes"

because of certain gain-sharing features that are

incorporated in them. Profit sharing schemes are in
the nature of an extra reward not only for skill and
industry, but for faithfulness of service over a
considerable period of time, usually a year. Gain
sharing is a correct name for the element of gain
sharing

is

nevertheless,

embodied

in

combinations

them,
of

but

the

they

two

are,

primary

methods named above. Let us know deep into the

principal characteristics, merits and demerits, of these
primary of wage payment.

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1. TIME WAGE SYSTEM:

General Characteristics: It is the oldest system of
remunerating labor. Under the day work system of
wages, the employer buys the time of the worker,
i.e., the worker is guaranteed a definite sum of
money for a specified period of his working time. The
unit of time bought may vary from one year, so that
the term 'day work' is in a way, a misnomer, handed
down to us from the time day was a more common
unit for wage payment.
The amount of work to be rendered must depend
upon the net effect of employee's willingness and
employer supervision. The employee guesses at an
amount

of

production

below

which

he

will

be

discharged, and at an amount for which he might be

given a raise. Within these limits the time-rate pays
exclusively for workmen time, taking no account of
the quantity of work done. According to section 4 of
the payment of Wage act 1936, the payment of wage
may be made at the end of the day, the week, the
fortnight, are the month accordingly, as it is mutually
agreed, provided that not more than one month must
elapse between two wage periods.

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Advantages:
Some of the eliminating advantages of this system
are:
1. It is very satisfactory of the rates reflect the value
of the time spent on the work.
2. Due to the care full attention of the worker, the
quality of the work is also not degraded and all the
big three-producers, workers and consumers-gain
there by.
3. Time rate type is the only system of payment that
can be used where the output of the individual
employees or groups of employees cannot be
readily measured.
4. In short, time wage system is the best system
provided it is used only proper job evaluation and
merit rating.
Disadvantages:
1. It leads to reduces quantum of work, unless a strict
supervision is arranged.
2. This method realize upon the driving power of
foreman in the plant for the purpose of obtaining a
satisfactory output.

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3. The

herding

together

of

men

into

classes

regardless of personal character and performance

leads to employer-employee relation's problems.
Measured day work:
H.L. Gantt has recommended the "Multiple Time Plan"
as an improvement over the time wages system.
Under this plan the worker is paid a day rate up to a
standard production and a higher day rate if this
standard is exceeded. More recently the idea, in a
more developed form, as appeared under the name of
"Measured Day Work" in this modern system a care
full study is made of each and operation to determine
to fair base rate by evaluating its characteristics and
requirements and rating these in terms of percentage.
The characteristics that may be considered are:
1. Skill required.
2. Responsibility involved.
3. Mental application required.
4. Physical application required.
5. Working conditions.
This process, it will be noted, is merely an evaluation
of the worth of the several operations to each other.
The final basic day rates are set in accordance with
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prevailing wage rates, labour conditions and company

polices.
2. PIECE WAGES SYSTEM:
Characteristics: Since time base lends to encourage
soldering, piece rate system, the second oldest
method of remunerating labour, is introduced. "Under
this plan workman, working in given conditions and
with given machinery, are paid exactly in proportion
to their physical out put. A workman is paid from the
stand point of the movement; in direct proportion to
his out put the actual amount of the pay per unit of
service being approximately equal to the marginal
value of his services in assisting the machinery to
make this output". Under this system the workers
makes all the gain or loss of his time. Piece rate
wages are applicable to repetitive work and tasks,
which

can

be

readily

measured,

inspected

and

counted. It is particularly suitable for the standardized

processes. It appeals to skilled and efficient workers
who can increase their earnings by their greater
ability and skill.

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Advantages:
1. The cost of supervision becomes comparatively
less, as the workers lend to drive themselves in
their own interest.
2. As the direct labor cost per unit of production
remains fixed and constant, calculations of costs
are making of lenders and estimates become
easier.
3. The workers themselves to speed up work may
improve the working arrangements.
Disadvantages:
1. This introduced antagonism and creates a gap
between men and management.
2. Too much emphasis on the quantity of production
may lower the quality of products.
3. Forced stoppage in work may reduce the earnings
of the workers unless there is a provision of a
guaranteed minimum wage.

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PRINCIPLES OF SALARY FIXATION:

1. External relatives:
A salary is a price indicating, like any other price the
value of the service to buyer and seller, the employer
and employee. The going rate for a job is its market
rate money will claim.
2. Internal relativities:
Salary

relativities

between

jobs

within

the

organization depending values attached to different

jobs.
3. Individual worth:
The value of the person in the job is something very
specific to that individual. Hence, His salary should be
influenced by his performance. The salary system
should, as for as possible enable the individual to be
rewarded according to the contribution and not

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restricted by the artificial barriers contained in a rigid

salary structure.

DETERMINATION OF WAGES:
The salary structure of an enterprise is built on the
premise that each job has its own price. This is
determined by the scientific job evaluation method
and or by the going rate in the area. The wages that
an employer is willing to pay depends on his
philosophy, his capacity to pay, his competitive
position and his ability to attract and retain a work
force by factors other than wages.

INCENTIVE SYSTEM OF PAYMENTS:

The relative advantages of time and speed as bases
of wage payment suggest a compromise between
them that may combine the good point s of each.
Systems which attempt to do this generally known, as

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'Incentive

Plans'

incentive

scheme

acceptable

standard
is

quality

definition

"Payment

produced

for

over

of

work
and

wage
of

above

an
a

specified quantity or standard.

ADVANTAGES:
1. To stimulate production by encouraging workers to
earn more than average wages.
2. To obviate the tendency of cutting down of rates by
combining the workmen's bonus with some benefit
in the savings of wages to the employers.
3. To help towards economical production by reducing
wage and production cost per unit.
4. To unify the conflicting interest of the employers
and the employed so as to promote and sustain
increased and smooth working.
DISADVANTAGES:
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1. Incentive earnings are often not adequate.

2. There may be, as we have indicated above, a lack
of consistency in the incentive earnings causing
upsets in the monthly budget of the workers or in
their expectations of carry home pay.

FOUR TYPES OF INCENTIVE SCHEME:

1. Earnings are in the same proportion as output.
2. Earnings are proportionately less than output.
3. Earnings are proportionately more than output.
4. Earnings are in proportions that differ at different
level of output.

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CHAPTER-V
Wage and salary system in HIPL
METHOD OF WAGE AND SALARY
HIPL

has

only

time

wage

system

because

production of out put unit takes so many stages and

also it will take lot of time to deliver as out put.
Advantages to Employees
In the process of wage and salary system
employees have benefits those are:
1. Employee can do work with relief.
2. Employee may take risk of high product or may
not.
3. Employee wont take risk or tension when delay
in supply of power and raw materials etc.
Advantages to Employers
Employer also beneficial from this system

Employer can take systematic and good working

environment.

Employer can improve the productivity by way of

good

maintenance

of

employee

without

extra

employee cost.

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Employer can utilized employees to other work also

i.e. change the department. And disadvantages are
also there but it is need to maintain.

SYSTEM OF SALARY PAYMENT

Company has system of distribution of salary
that

If employee has bank account, salary goes to their

account directly.

Employee can earn salary of last month on the date

of 5th this month only.

If employee hasnt any account in bank they can

receive through directly hand over.

Employee want any detail about their salary,

company will provide salary slip that is as follows.

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HOSPET ISPAT LIMITED

Sy.No 2 ALLANAGAR, BAGNAL ROAD, TQ & DIST KOPPAL, KARNATAKA.
PAY SLIP
Emp. Name:
Emp.No:
P.F.No.
Department Environment
Leave details
CL
PL
Availed

Designation:

Month:

2008
Days

LWP

CL
Balance

SL

PL

Actual

SL
Present

Earning
Basic

Deduction

HRA

TDS

TOTAL EARNINGS

PF

PT

Adv

Pen.Adv

NET PAY

TOTAL DEDUCTIONS

PAY SLIP

CASUAL LEAVE (CL)

Employee can get 7 days in a year as casual
leave, before going to leave employee must
inform

to

authority

before

days,

every

employee can get leave continuously 3 days

only. And it
gives all allowances and salary.

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Wages and Salary Management

PRIVCILAGE LEAVE (PL)

Company gives to employee leave as privilage
leave, he must attend the work continuously 20
days including weakly off and other national
holidays like derail etc. this also give salary and
other allowances.
PL =

Working days/ 20 DAYS (ANNUALLY)

SICK LEAVE (SL)

Employee can get sick leave when they are
bothering from illness, but every employee must
present medical certificate to authority. Its also
limit to 7 days for one year. It also includes
salary and allowances.

WEAKLY OFF
Company

facilitate

to

every

employees

as

holiday for weakly one day with salary and

allowances and also it gives to employees
holiday of national festivals like diwali etc.
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LAPS OF WAGE PAY

When employee has no leave to get leave then
also he/she will gets leave he/she will loose his
pay
LEAVE DETAILS
Leave details column availed is proper available
leave to employee and balance is remaining leave to
employee.

EARNINGS
Basic is represents the salary of the employee
which is exact salary of employee and HRA is
represents house rental allowance which is giving by
company 30% to 40% on basic salary.

DEDUCTION
TDS is represents tax deduction on salary but
salary must greater than 20,000 the rate of deduction
is 12%.

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PROFESSIONAL TAX
Professional tax which is deciding on the basis of
salary as under
Sl.
No.
1.
2.
3.
4.
5.
6.

Employees whose
monthly salaries or
wages of both are
Less than Rs.3000/Rs.3000/- PM or more
but less than
Rs.5000/-PM
Rs.5000/- PM or more
but less than
Rs.8000/-PM
Rs.8000/- PM or more
but less than
Rs.10000/-PM
Rs.10000/- PM or more
but less than
Rs.15000/-PM
Rs.15000/- PM or more
Arrears
(Rupees Ten Thousand
Two Hundred Thirty
only)

No. of Rate of
Employ
Tax
ees
00
111

30.00

Amount of
Tax
deducted
(Rs)
3330.00

44

60.00

2640.00

100.00

800.00

150.00

1350.00

200.00

1000.00

177

9120.00

PROVIDENT FUND

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Provident fund which is deducting @8.33% on

basic salary of employee this amount can take by
employee

when

retirement.

And

company

also

contribute equal.
Advance
It represents employee advance which has taken
by employee for some of amount as advance and it is
deducting monthly.
Pending advance
Pending advance it is the balance which has to
payable by employee.

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PRINCIPLE OF SALARY FIXATION

HIPL has own principle to fix the salary of
employee for particular grade or job like that.
Employee of the HIPL can earn reasonable salary
and wage according to Range Sheet which is given
by the Government to (pvt.) ltd or HIPL.
HIPL has been paying satisfaction salary amount
to employees and also above the minimum salary.
HIPL will go to distribute the extra salary to
employees. In the end of the year when production
takes over the target employee earn on the basis of
tonne wise rate the rate which is fixes by company
end of the year.
Work Ethics:
HIPL has going to do progress and training for
the development of employees.
The program conducted by HIPL in Hospet.
1. Hotel Siddhartha (March-08)
2. Rotary Club (April-08)
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Under this programme company going to

find
1. Leadership Quality.
2. Maintenance Quality.
3. Commitment.
If there is near in any way train to them and
improve them, it helps to increment and job rotation
etc.
Leave to Employee
The company has Leave days to employees.
Commonly every employee can take holyday in
National festivals like Diwali, etc with salary.
Every Employee can take 7 days casual leave
with salary and allowances but employee can take
holyday to one or two days only otherwise he must
take permission from authorities.
And from the company side employee can take
another 7 days per year when employee is sick.
Condition this is also restricted as employee want
take more than two days he/she must submit medical
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certificate for illness and this is also full salary and

allowances.
Otherwise employee will lose their salary and
allowances.
FACILITIES TO WORKERS
1. Canteen facility.
2. Safety share facility.
4. Loan facility.

CONTRIBUTION TO FACILITIES:

Increment

2,2,108-76

Bonus

8,50,000-00

65,000-00

Tea

35,000-00

Safety

3, 50,000-00

(One month Salary)

Canteen facility
(50% off rate)
Meals and Tiffin
P.M

P.M

2, 50,000-00 P.M.

Sports

2, 00,000-00 P.A.

Insurance

3, 00,000-00 P.A.

Production Incentive

3, 80,000-00 P.A.

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DISTRIBUTION OF SALARY
Sl.No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.

Departments
HRD
Account
Dispatch
Store
Drivers
Environment
Utility
Weigh Bridge
House Keeping
Lab
Electrical
Mechanical
RMHS
Total

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Amount of salary
16610.00
52294.00
30184.00
27787.00
18835.00
79095.00
30797.00
14244.00
8188.00
112325.00
106568.00
131561.00
117215.00
745703.00

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ANNUAL ATTENDANCE TABLE OF EMPLOYEES

Months
Apr-07
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08

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Actual Emp.

Weekly

CL/SL

Present

178
178
179
178
179
179
178
177
180
180
181
182

Off
19
19
18
20
19
20
18
18
18
19
18
19

10
08
09
08
10
09
10
09
08
08
09
10

149
151
152
150
150
150
150
150
154
153
154
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200
180
160
140
120
100
80
60
40
20
0

7-Apr

7-Nov

8-Mar

Actual emp

178

177

182

Weekly off

19

18

19

CL/SL

10

10

Present

149

150

153

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on wards

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Wages and Salary Management

ANNUAL ATTENDANCE TABLE OF LABOURS

Months
April 07
May 07
June 07
July 07
August 07
Sept 07
Oct07
Nov 07
Dec 07
Jan 08
Feb 08
March 08

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Total labours
65
64
63
65
62
61
61
62
63
65
64
65

Attendance
52
53
52
55
51
50
49
50
51
51
55
53

Men
30
28
29
30
26
30
30
29
29
28
30
30

Women
22
23
23
25
25
20
19
21
22
23
25
23

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Wages and Salary Management

50

65

62

53

50

65

total workers

30

29
52

attendence

23

30

men

21

22

women

100
Apr-07

150
Nov-07

200

250

Mar-08

CHAPTER-VI
FINDINGS & SUGGESTIONS

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Findings
Punctuality maintained by employees is not
satisfactory.
The company is using scientific approach of job
design
Employees children dont have library facility
Bad smell due to dust
Lack of training programmes
There is no frequent collection of job data
Lack of HR policies and programmes for
employees
There are no quarter facilities

Suggestions:
Right candidate for right job
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Job rotation is helpful for employees as well as

company.
For all programmes feedback should be collected
The

time

for

in-plant

training

should

be

maximized, which helps the student to study the

company in detail
There-should be an optimum planning to avoid
the

maximum

and

minimum

strength

employees
As much as possible control the dust

SWOT ANALYSIS
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of

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SWOT Analysis means the analysis of the

opportunities and threats of an organisation. Let us
see the

STRENGTHS
Well experienced personnel
Advanced technology adoption
Well established and systematic rules and
procedures
Vast land area
Highly skilled and professional employees
Good refreshment facility
Good quality product, certified with ISO
WEAKNESS

Lack of training programmes

No proper trainers

Completion of assigned work is delayed

There is no frequent collection of job data

Lack of communication

Welfare facility should be improved

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For all programmes feedback wont collect by

company

Heavy dust, improper working environment

OPPORTUNITIES
Scope for expansion
Execution of new project
Research and development effort
Export market
THREATS

New competitors coming up in the market

Increase in the labours turn over

Workers absenteeism

Decreasing the demand to the SPONZE

IRON

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BIBLIOGRAPHY

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BOOKS AND AUTHOURS

Human Resource Management
(By SUBBA RAO)
Financial Management
(By G.B.BALIGAR)

WEBSITS
[email protected]
www.hipl.com

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Wages and Salary Management

[email protected]

QUESTIONNAIRE
Dear Respondents,
In partial fulfilment of the
equipment for BBM program. I have undertaken INPLANT

TRAINING

on

WAGES

&

SALARY

MANAGEMENT.
I need your co-operation .I would be grateful if you
could spare a few minutes and answer the questions
bellow.
The answers given by you would be kept confidential.

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Wages and Salary Management

Thanking you,
(KOTRAIAH
A.M.)
Final year BBM
Vijayanagara College
HOSPET,
1. Have you been feeling the company is
a) Good

b) Natural

c) Bad

2. Have you comfortable place in the plant to do

work effectively?
a) Yes

b) No

c) Suggestions

3. Have you any fear to do work while working in

plant?
a) Yes

b) No

4. Have you been satisfying in management?

a) Yes

b) No

5. Have you been living comfortably from your

earnings
a) Yes

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Final

b) No

c) Natural

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Wages and Salary Management

6. Do you feel is this company environment

healthy?
a) Yes

b) No

c) Normal

7. Have you been satisfied in working hour of the

company?
a) Good

b) Bad

c) Normal

8. What about mangers do you feel?

a) Good

b) bad

c) Normal

9. Company going to extend the unit, are you?

a) Happy
10.

b) Unhappy

Has company been contributing to

environment?
a) Yes

b) No

HIPL going to every year contribute to environment

20% of the profit
11.
a) Yes
12.

Has company any immature employees?

b) No
Has company offered to you any food

speciality for water lunch, dinner, breakfast?

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Wages and Salary Management

a) Yes
13.

b) No
Has been company going to find your

talent?
a) Yes

b) No

If yes what is the effect

Reg.No.0755301
A
PROJECT REPORT
ON
WAGES AND SALARY MANAGEMENT IN
HOSPET ISPAT PVT LTD
Project report submitted in partial fulfilment of the
requirement for the award of

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BACHELORS DEGREE IN BUSINESS

MANAGEMENT

of Gulbarga University,
Gulbarga
BY
KOTRAIAH A M
FINAL YEAR BBM

Under the Guidance of

Internal Guide

External Guide

Dr.M.J.Basavaraja
Mr.THIRUMALAREDDY
(Mcom, PhD)
Selection Grade Lecturer
Faculty Member

(H.R. Manager)

DEPARTMENT OF COMMERCE AND MANAGEMENT

VIJAYANAGAR COLLEGE, HOSPET-583201
ACADEMIC YEAR 2008-2009

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Chapter I
INTRODUCTION

Objectives of study
Design of the study
Methodology and limitation

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Chapter II
COMPANY PROFILE

Company Profile
Objective of the Company
Boards & Directives
Vision Mission
Production
Raw Material
Machinery
Information System
Man power
Marketing Area
Stock House
Competitors
Department
Organization Chart

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Chapter III
POLICIES

Human Resource Policies

Recruitment Policies
Selection Policies
Safety Policies
Quality Policies
Quality Objectives
HR Plans

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Chapter IV
THEORETICAL FRAME WORK

Introduction
Wage SYSTEM
Objectives
Theories of Wages
Methods of payment
Principals of Salary Fixation
Incentives

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Chapter V
WAGES & SALARY MANAGEMENT

Method
Advantages & Disadvantages.
System of Salary Distribution.
Pay Slip.
Principal of Salary Fixation.
Leave
Facilities to employees
Distribution of Salary
Annual Attendance.

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Chapter VI
Findings & Suggestions

Findings & Suggestions

SWOT analysis
Bibliography
Questionnaire

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