An Examination of the Relationship between Wage and Salary, Employee Satisfaction, and Organizational Performance in the Context of Globalization

An Examination of the Relationship between Wage and Salary, Employee Satisfaction, and Organizational Performance in the Context of Globalization

Wage and salary is given to the employee for the work he has done for the organizational needs. There is meaningful relationship of wage and salary with the satisfaction or dissatisfaction of the employees. The performance of the employee and his production and productive capacity largely depends upon the wage and salary he is paid. Pertaining to the globalization and international change scenario. Today, the policy Since, there has been comprehensive change in the wage and salary dimensions makers insists on the Human Resource elements behind their achievement prospects and they are quite aware that as per the present scenario the market challenges can not be obtained without adequate wage and salary given to the employees.

  1. Classification of field of work
1Works72
2Non Works12
Total84
  1. Grade Classified
SNo.Class intervalNo.Percentage
1S1-S31011.9
2S4-S62833.3
3S7-S103440.5
4E0-E61214.3
TOTAL84100
  1. Qualification Classified
SNo.QualificationNo.Percentage
1Matric,ITI2327.4
2Graduate3440.5
3P.G.(+)1517.8
4B.E. Dip (+)1214.3
TOTAL84100
  1. Age Classified
SNo.Class intervalNo.Percentage
120-30 (yrs.)1214.3
230-40 (yrs.)2023.8
340-50 (yrs.)3541.7
450 & above1720.2
TOTAL84100
  • Length of service classified
SNo.Class intervalNo.Percentage
10-10 (yrs.)1416.7
210-20 (yrs.)2630.9
320-30 (yrs.)3541.7
430 & above (yrs.) 910.7
TOTAL84100


Different segments of the questions

  • Satisfaction with the Pay Packages
  • Social Security
  • Planning and Process of Wage Administration
  • Reliability of Management
  • Reliability of Trade Union
  • Possible factors of Dissatisfaction
  • Accountability and Dedication of the Employee

CONCEPT

The classification of this study in the following stages will determine the level of satisfaction or dissatisfaction of the employees of BSP on their Pay Packages. However, this phenomena has deviation during the course of time and different situations, yet the core significance of wage and salary remains unchanged and the work culture on. HR climate of the organization should be maintained sustainable to the objectives of the organization.

SALIENT FEATURES OF THE STUDY

  1. Planning and Policy of wage salary administration
  • Execution of wage policy
  • Employees expectation and fulfillment of their motives
  • Reliability of management
  • Reliability and honest approach of trade unions on pay-fixation issues.
  • Social security, the prime concerned of the employee
  • Possible factors of dissatisfaction of the employees
  • Management and employees interface

Classification and Interpretation of the

Responses with graphical presentation

SEGMENT-I : SATISFACTION WITH THE PAY PACKAGE

TABLE–1 (Q.1) : Personal contribution in the production

Text Box:
SNo. Perception No. % 1 Highly Agree 55 65.5 2 Agree 28 33.3 3 Disagree 1 1.2 4 Highly disagree – – Total 84 100    

As evident

Interpretation :

The employee gives his incredible mental or physical contribution in the process of production. In this context the employee should be given adequate remuneration which he deserves. This factor becomes more significant particularly in the process of heavy steel production and he starts thinking that he will be awarded justified wage or salary for the valuable contribution he has given.

About 65.5% respondents have opined that they are an important contributor in the process of production. About 33.3% of the total reply are also agreed with this opinion. Therefore, it can be said that about 98.8% fully agree or in the favour of this statement. Only, a very negligible number of respondents i.e. 1.2% are disagreed with the statement.

TABLE–2 (Q.2) : Organizational working condition is very tough

Text Box:
SNo. Perception No. % 1 Highly Agree 11 13.2 2 Agree 39 46.4 3 Disagree 29 34.5 4 Highly disagree 5 5.9 Total 84 100    

Interpretation : As evident from

Interpretation :

The working condition in the steel plants are very hazardous and unsafe to the employees. Very often the employees who are working in such a complex situation expect high salary due to number of risk factors. And their expectations of wage and salary direct relationship with the working conditions.

About 59.6% (Fully Agree) respondents realized that the working condition of the plant is very dangerous and complex. And their expectation for salary will be equal to that table. But about 40.4% respondents who are disagreed with this statement. However, it will be interesting to see the reflection of theses factors on their level of satisfaction.

TABLE–3 (Q.3) :    Satisfaction with the pay package and other  benefits

Text Box:
SNo. Perception No. % 1 Highly Agree 15 17.8 2 Agree 39 46.4 3 Disagree 15 17.8 4 Highly disagree 15 17.8 Total 84 100    

Interpretation :

This statement was given to assess the level of satisfaction of the employees for the salary they are being paid.

In this, regard it has been observed that a very high percentage of employees are either highly satisfied or satisfied with the salary and other facilities given to them by the organization.

About 64.4% (fully agree) respondents are in the favour of this statement. But there are 35.6% who are either dissatisfied or highly dissatisfied with their existing salaries.

TABLE–4 (Q.8) :    Right salary paid to the employees for their hard work

Text Box:
SNo. Perception No. % 1 Highly Agree 14 16.6 2 Agree 38 45.2 3 Disagree 20 23.9 4 Highly disagree 12 14.3 Total 84 100    

Interpretation : As evident from

Interpretation :

BSP employees are committed for comprehensive effort to fulfill the objectives of the organization. In this regard, they have to face quite difficult challenges to fulfill the organizational goals.

This statement has been widely accepted by 61.8% (Fully Agree) respondents, but quite a good number of employees (38.2% i.e. Totally Disagree) do not find that they are properly paid for their hard work.

TABLE–5 (Q.9) :    Comparatively high salary with the salary of other organisation

Text Box:
SNo. Perception No. % 1 Highly Agree 3 3.6 2 Agree 38 45.2 3 Disagree 41 48.8 4 Highly disagree 2 2.4 Total 84 100    

Interpretation : As evident from

Interpretation :

The emergence of private companies, M.N.C and corporate sectors has brought new concept of salary and perks. The Government Organisations are inflexible in this regard. This factor has also brought conceptual change among the employees.

About 48.8% (Fully Agree) find it they are being paid high salaries in comparison to the other organisations. But 51.2% (Totally Disagree) respondents has revealed that rather low salary in being paid to them in comparison to the other organsiation.

SEGMENT-II  : SOCIAL SECURITY

TABLE–6 (Q.10) :       Confident to take care of the family with the existing salary

Text Box:
SNo. Perception No. % 1 Highly Agree 7 8.3 2 Agree 56 66.7 3 Disagree 13 15.5 4 Highly disagree 8 9.5 Total 84 100    

Interpretation : As evident from

Interpretation :

The social factor of every employees is closely related with the salary and incentives he is getting. This can also be one of the greatest motivational factor if he is paid optimum level of salary.

It is, great honor for BSP in this regard that they are fully confident and find secure with a salary they are getting. About 75.0% have given this opinion. But quite a few (25.0%) employees find insecure with their present salary.

TABLE–7 (Q.11) :       Savings from the salary for future needs.

Text Box:
SNo. Perception No. % 1 Highly Agree 14 16.7 2 Agree 41 48.8 3 Disagree 20 23.8 4 Highly disagree 9 10.7 Total 84 100    

Interpretation : As evident from

Interpretation :

The social security is prime objective for the employees for the survival of his family in future time. His level of satisfaction will be considered if he is able to spare some money for his future.

In this regard, about 65.5% (Fully Agree) respondents are able to spare some money for their future, and this is quite an encourageous factor for this organization. On the other hand, there are about 34.5% employees who are not able to save money.

SEGMENT-III : PLANNING AND PROCESS OF WAGE ADMINISTRATION

TABLE–8 (Q.16) :       Separation of wage and salary determination for BSP from SAIL

Text Box:
SNo. Perception No. % 1 Highly Agree 32 38.1 2 Agree 30 35.7 3 Disagree 13 15.5 4 Highly disagree 9 10.7 Total 84 100    

Interpretation : As evident from

Interpretation :

BSP has been identified by giving best performance in the achievement of production target, cost control and quality products. It has been one and only one profit making unit in SAIL. In this context it was tried to know the perception of the employee rather BSP should be separated from SAIL on wage revision matter.

The perception of most of the employees are in the favour of this statement. About 73.8% (Fully Agree) that BSP should be separated form SAIL for pay-fixation matter.

TABLE–9 (Q.17) :       Need of flexible pay fixation rules for good performing employees

Text Box:
SNo. Perception No. % 1 Highly Agree 31 36.9 2 Agree 38 45.3 3 Disagree 9 10.7 4 Highly disagree 6 7.1 Total 84 100    

Interpretation : As evident from

Interpretation :

Excellent work should always be appreciated and it should be recognized by the authorities. But when we are studying about salary and incentive matter the significance of this recognition is indifferent.

Whether the pay fixation rules or incentive rules should be made flexible as per the performance of the employees 82.2% (Fully Agree) have opined and favoured the statement that there must be flexible rules for such kind of works.

TABLE–10 (Q.18) :     Fulfillment of HODs promises for awards to the employees for good work

Text Box:
SNo. Perception No. % 1 Highly Agree 14 16.6 2 Agree 29 34.5 3 Disagree 37 44.1 4 Highly disagree 4 4.8 Total 84 100    

Interpretation : As evident from

Interpretation :

Awards and recognitions are effective tools to maintain the sustainable motivation of the employees. In this regard the HOD’s must fulfill their promises.

In this regard, it has been observed in this analysis that about 48.9% (Totally Disagree) HOD’s do not fulfill their promises. This is quite discouraging and unreliable matter regarding organizational status.

SEGMENT-IV : RELIABILITY OF MANAGEMENT

TABLE–11 (Q.12) :     Satisfaction with the wage revision and present pay structure

Text Box:
SNo. Perception No. % 1 Highly Agree 4 4.8 2 Agree 22 26.2 3 Disagree 31 36.9 4 Highly disagree 27 32.1 Total 84 100    

Interpretation : As evident from

Interpretation :

The process of wage revision and formation of pay structure both are very important elements which gives very deep and dynamic impact upon the overall performance of the employees as well as of the organization.

The perception of the respondents in this regard is quite negative and unfavourable to the policy of the management. Only 31.0% (Fully Agree) are satisfied with the existing pay structure. But a very high percentage (69.0 % i.e. Totally Disagree) who are not at all satisfied with the existing system. This element can be recognized as the major drawback when we study about the level of satisfaction (perception of the employees of wage and salary structure).

TABLE–12 (Q.13) :     Pay anomalies are quickly settled in BSP

Text Box:
SNo. Perception No. % 1 Highly Agree 14 16.7 2 Agree 39 46.4 3 Disagree 19 22.6 4 Highly disagree 12 14.3 Total 84 100    

Interpretation : As evident from

Interpretation :

Pay and salary, process of education is very complicated and sensitive matter which is close to the satisfaction or dissatisfaction of the employees. The discrepancies of pay anomaly should be quickly settled.

Above, 63.1% (Fully Agree) have replied that the pay anomalies are fully satisfied. On the other hand, there are about 36.9% employees could not find the settlement time and system reliable to their own perception.

SEGMENT-V : RELIABILITY OF TRADE UNION

TABLE–13 (Q.15) :     Competency and reliability of Trade Union for pay revision

Text Box:
SNo. Perception No. % 1 Highly Agree 5 5.9 2 Agree 28 33.4 3 Disagree 22 26.2 4 Highly disagree 29 34.5 Total 84 100    

Interpretation : As evident from

Interpretation :

The recognized Trade Unions play vital role in the process of pay revision. As an usual process they bargain with the management and come to a satisfactory status in pay revision. They must be reliable and accountable to the employees.

In this regard, it is quite surprising and demoralizing factor that a very large number of employee 60.7% (Totally Disagree) do not have trust upon the competency and reliability of the trade union on wage revision issues.

SEGMENT-VI : POSSIBLE FACTORS OF 

   DISSATISFACATION

TABLE–14 (Q.4) :       Process of gradation system in BSP is adequate

Text Box:
SNo. Perception No. % 1 Highly Agree 16 19.2 2 Agree 36 42.8 3 Disagree 17 20.2 4 Highly disagree 15 17.8 Total 84 100    

Interpretation : As evident from

Interpretation :

The volume of satisfaction of the employees depends upon number of different elements such as, the process of pay revision, pay structure, time schedule and its implementation.

In BSP, this process is promptly taken by the management as a regular process which has been favoured by 42.8 %(Agree) and 19.2% (Highly Agree) respondents. But 20.2% (Disagree) and 17.8% (Highly Disagree) do not find this matter favourable to them. Their argument can be justified as there was sufficient delay in pay revision and pay fixation in last pay revision. This is quite serious matter where about 38.0% employees are dissatisfied with the wage revision process.

TABLE–15 (Q.5) : Difference between the pay scale of Executives and Non-Executives

Text Box:
SNo. Perception No. % 1 Highly Agree 22 26.3 2 Agree 47 55.9 3 Disagree 8 9.3 4 Highly disagree 7 8.5 Total 84 100    

Interpretation : As evident from

Interpretation :

The old concept of wage and salary theories are quite different with the modern theory of wage and salary, which contents HRIS approach and scientific inputs. There has been difference in the salaries of executives and non-executives. If the difference is too much, will it effect as comprehensive impact on the performance of the employees’.

In this context, a very large number of employees (82.2% – Fully Agree) accept that there is very large difference in the salaries of executives and non-executives.

TABLE–16 (Q.6) :       Satisfaction with the Incentive given to the employees

Text Box:
SNo. Perception No. % 1 Highly Agree 12 14.4 2 Agree 36 42.8 3 Disagree 21 25.0 4 Highly disagree 15 17.8 Total 84 100    

Interpretation : As evident from

Interpretation :

Incentive is being given to the employees for their good performance in addition to that pay and salary. In BSP, there are different criteria for different category of work for incentive payments.

The employees who are satisfied with the existing incentive schemes are 57.2% but there are about 32.8% employees who are either dissatisfied or highly dissatisfied with the incentive schemes.

TABLE–17 (Q.7) :       Equalization of Executives and              Non-Executive Incentive

Text Box:
SNo Perception No. % 1 Highly Agree 25 29.8 2 Agree 44 52.4 3 Disagree 10 11.9 4 Highly disagree 5 5.9 Total 84 100    

Interpretation : As evident from

Interpretation :

a joint effort or team work particularly in steel production areas. Therefore, the common perception of the employees are that there should not be any difference on incentives between the executives and non-executives.

This factor has been broadly accepted by 82.2% (Fully Agree) respondents that the difference of incentive should be narrowed down.

SEGMENT-VII : ACCOUNTABILITY AND DEDICATION OF THE EMPLOYEE

TABLE–18 (Q.14) :     Organisational objectives are more important than personal pay and salary

Text Box:
SNo. Perception No. % 1 Highly Agree 27 32.1 2 Agree 48 57.2 3 Disagree 5 5.9 4 Highly disagree 4 4.8 Total 84 100    

Interpretation : As evident from

Interpretation :

The level of the employees satisfaction can be compared with the interest of the organization. Here, it will be tried which factor has prime importance for the employee, the salary or the interest of the organization.

The BSP work culture is very high and every employee is fully dedicated for the fulfillment of the interest of the plant. This perception has been revealed by quite a very high percent of respondents 89.3% (Fully Agree).

ANALYSIS OF RESPONDENTS AND THEIR PERCEPTIONS THROUGH CLUSTER

ANALYSIS AND K MEANS

METHODS OF CLUSTER ANALYSIS :

Various methods used in cluster analysis can be classified into two major groups : Hierarchical, Non-Hierarchical.

Here Hierachical cluster method is used. Hierachical method is simplier than non-hierachical method.

How Many Clusters :

An important question in cluster analysis is how many clusters should be formed. Several alternatives one available in this regard. First, the number of clusters may be fixed by the researcher in advance. Second, one may decide the number of clusters from the clusters pattern generated by the programme. Here second option, is extensively used to determined the number of clusters in the sample.

OUTPUT AND ITS INTERPRETATION

Table 1 : (Agglomeration Schedule)

 Cluster Combined CoefficientsStage Cluster First Appears Next Stage
StageCluster 1Cluster 2 Cluster 1Cluster 2 
17382.000009
23180.0000014
32729.0000015
433751.0000010
537651.0000011
616631.0000061
741511.000008
88411.5000730
928732.0000120
1033772.5004013
1130372.5000        5       14
1212543.0000027
1333743.33310026
1430313.66711228
152781  4.0003031
166674.0000019
1747604.0000        024
1822484.0000029
1967  4.00016032
2028794.6679045
214372  5.0000028
2238705.0000045
2318595.0000053
       2419475.00001734
25125.0000034
26       33785.50013031
       2712585.50012044
2830435.900142135
2922526.00018039
308216.3338046
3127336.467152640
32366.667        01943
3326837.0000067
341197.500252444
3530567.71428043
3645768.0000047
3725618.0000054
3834408.0000055
395228.33302963
4027358.87531        048
           
416684  9.00000       64
4244649.0000060
433309.313323548
441129.467342751
4528389.500202250
468499.75030065
47364510.00003659
4832710.3524340       51
49425711.0000057
50285311.16745054
511311.845444855
52111412.0000069
53185512.50023065
54252812.714375067
5513412.793513856
5614613.09755059
57       234213.50004966
58102014.0000063
5913614.458564762
6044414.50004272
61161714.5006080
6216814.88659064
6351015.250395875
641       66    15.5836241       66
6581815.80046       5371
6612317.053645768
67       252617.056543374
6819    17.512       66070
69117118.00052077
70        13918.04868        072
7186218.12565076
721419.070706074
73131520.0000078
7412521.107726777
7555022.500630       76
765823.889757180
7711124.339746978
7811329.967       777381
79243232.0000081
8051633.104766182
8112434.855787982
821535.433818083
8316940.313       82         0         0


From top to bottom method (stage 1-83), all N (84) samples are grouped in one cluster and then divided into different clusters on the basis of highest average within – cluster distance. This process is carried on untill each entity is a separate cluster. Therefore, stage 83 represents

  1. cluster solution, stage 82 represents
  2. cluster solution, stage 81 represents
  3. cluster solution, stage 80 represents
  4. cluster solution, stage 79 represents
  5. cluster solution.

Now we can identify there can be 5 clusters in the data because in stage 78 another sequence starts which is not relevant for us. But still there some scope for improvement in taking cluster decisions. So, we can take the help of coefficients.

COEFFICIENTS

The difference between rows in a measure is known as coefficient (see table 1, column 4). We must look at the figure from the last row upward, we could like to have lowest possible number of cluster for reasons of economy and ease of interpretation. We see that there is a difference of (40.313 – 35.433) in the coefficient between 1 cluster solution (stage-83) and the 2 cluster solution (stage-82). This is a difference of 4.88. The next difference is of (35.433 – 34.855) which is equal to 0.578 between the stage 82, the 2 cluster solution and stage 81 at 3 cluster solution. So, in this way we can take the difference between sucessive stages. The next stage will be (34.855 – 33.104 = 1.751) between “3 cluster and 4 cluster” solution. Again the next stage will be, (33.104 – 32.000 = 1.104) between “4 cluster and 5 cluster solution. The next stage will be, (32.000 – 29.967 = 2.033) between “5 cluster and 6 cluster” solution. The next stage will be, (29.967 – 24.937 = 5.628) between, “6 cluster and 7 cluster” solution. A large difference between coefficient between any two rows (hear 5.628, rows 78, 77) indicates a solution pertaining to the number of clusters (6) which the lower row (78) represents. There after the different are same in the subsequent rows of the coefficient.

So, we should go for 6 cluster solution.

We use Euclidean Distance to find the number of clusters. This formula is used in the above explanation in a simplified way.

Formula = S (xj – Yj)^2

STAGE-2

K-MEANS CLUSTER   (Table-2)

(See table-2 Final cluster centers) (4-Highly agree, 3-Agree,       2-Disagree, 1-Highly disagree)

K-means procedures gives more stable clusters, since it is an interactive procedures with single pass hierarchical methods.

The final cluster centers describe the mean value of each variables for each of the six clusters.

Cluster-1 Interpretation :

The people in this cluster are fully agree with Qs. 1,2,7,14,16,17. This shows they are mostly from non-executive side and from the plant itself. They are totally dissatisfied with as 14, 13, 12 but they are able to save some money for the future (Qs. 11-2.14). This shows that they are mostly  senior non-executives having slight dissatisfaction towards pay package.

Cluster-2 Interpretation :

The people in this cluster fully agree with question 1, 10, 14, 16, 17 and slightly disagree on Qs. 2. It seen that the people in this segment are from senior non-executive sides and they think their contribution to the production is a prime importance. And they also opined that the working condition is not so tough and dangerous. This proves that the people in this segment are mostly office employees.

Cluster-3 Interpretation :

The people in this cluster fully agree with the Qs. 1 to 8, 10 to 14, 16 and 17. It seems that this segment is a mixture of senior and middle non-executives with a very bad impression on trade union (2.33 lowest in this cluster).

Cluster-4 Interpretation :

The people in this cluster fully agree with qs. 1 to 9, 8 to 11 and 14. Question number 8, 9, 10, 11 (3.33 each) shows a satisfaction towards pay package qs. 5, 7, 12, 15 they totally disagree. The question 5, 7, 12 proves the people in this segments are mostly from executive sides.

Cluster-5 Interpretation :

The people in this cluster fully agree with qs. 1, 5, 7, 14, 16, 17, 18. This shows that they are mostly from non-executive sides. And they are totally disagree with qs. 3, 4, 6, 8, 9, 10, 15. The qs. number 4 show they are dissatisfied with the gradation system. They people in this cluster should be from middle and senior non-executives, who have not satisfied with their grading carries. This people has highest dissatisfaction (1.00) toward functioning of trade unions.

Cluster-6 Interpretation :

The people in this cluster fully agree with qs. 1, 5, 7. This shows they are from non-executive side and totally disagree from 17, 16, 15, 13, 12. There respondent towards 17, 16, 15 (1.5) shows they are mostly lower non-executives and in rest of the questions they give contradictory verdicts. This can be due to the low educational factor.

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