MS 27 Wage and Salary Administration Sample Paper

MBA - Master of Business Administration

Note: There are two sections A and B. Attempt any four questions from Section A. Each questions carries 15 marks. Section B is compulsory and carries 40 marks.

1. What is the role of wage supplements in the compensation policy and programmes of an organisation? Explain with suitable examples.

2. "Higher wages and inflexible wage costs could result in reduction in employment intensity," Critically evaluate the statement.

3. What do you understand by "Capacity to pay on industry-cum-region basis"? Explain with suitable examples.

4. Can the fine be deducted from wages of an employed person? If so, subject to what conditions. Explain.

5. What are the hazards of industrial life? Explain with suitable examples?

6. Explain the concept of tax planning? What is the distinction between tax planning and tax avoidance?

7. Write short notes on any three of the following:
(i) Point Rating Method
(ii) Stock option and profit sharing
(iii) VRS (Voluntary Retirement Scheme)
(iv) Time span of decision methods
(v) Collective Bargaining

SECTION B

Please read the case given below and answer the questions at the end.

Early in December, Mr. Anand was called in for his annual salary review. Mr. Anand was a staff engineer for Zee Engineering Company, which he had been with for just over 10 years. In the past Mr. Anand had usually received what he considered to be fair pay raise. During his salary review his manager Mr. Ash Kumar informed Mr. Anand that he was recommending a 10 per cent raise. Mr. Ashok Kumar went on to extol the fine job Mr. Anand done in the past year and to explain that r. Anand should be especially proud of the above-average pay raise he would be getting. Upon reflection, Mr. Anand was rather proud; in 10 years, he had been promoted twice and his annual salary had gone from 1,50,000 to 1,80,000.

Things were moving along just fine for Mr. Anand until he discovered few weeks later that a new engineer right out of college had just been hired by Zee at a starting salary of 1,70,000. It really had upset Mr. Anand to think that a new unproven engineer would be starting at a salary almost equal to his Mr. Anand's first move was to talk to several of his colleagues. Most were aware of the situation and didn't like it either. Mr. Sandeep Kumar who had been an engineer with zee for over 12 years asked Mr. Anand if he realized he was probably making less money, in actual Rupees than when he started at Zee. This really floored Mr. Anand and he realized inflation had eaten into everyone's paycheck, but he had never even considered the possibility that he had not kept up with inflation. That evening, on the local library and looked up the consumer price index (CPI) for the past 10 years. According to Mr. Anand's figures, if his pay had kept up exactly inflation it would be making at Rs. 2,05,000.

After a very restless night, the first thing Mr. Anand did upon arriving at work the next day was go straight to Human Resource Manager Semanth Roy's office. After presenting his case about the new employee and about how inflation had ended his pay Mr. Anand sat back and waited for Samanth Roy's reply.

Samanth Roy started by explaining that he understood just how Mr. Anand felt. At the same time, however, Mr. Anand had to consider the situation from the company's standpoint as well. The current supply and demand situation dictated that Zee had to pay 1,70,000 to get new engineers who were any good at all Mr. Anand explained he could understand that, but he couldn't pay him and other senior engineers more money. Samanth Roy again Sympathized with Mr. Anand but then went on a explain that it was a supply and demand situation. The fact was that senior engineers just didn't demand that much more pay than engineers just starting!

Questions:

1. Do you thing Anand is being fairly treated with by Zee? How would you reach if you were Anand?
2. If you were Samanth Roy how would you have responded to Anand's question?
3. Do you think wage survey might help in this situation and how?
4. Should Samanth Roy establish pay grades for engineers keeping in view the demand and supply situation of the market?