In the context of Human Resource Management (HRM), wages and salary refer to two distinct forms of compensation provided to employees. Wages are variable payments based on the number of hours worked or the amount of work completed, while salary is a fixed amount of money paid on a regular basis, typically monthly.
Key Facts
- Definition: Wages and salary are two different forms of compensation provided to employees based on their work and performance.
- Salary: A salary is a fixed amount of money paid to employees on a regular basis, usually monthly. It is predetermined and agreed upon between the employer and the employee. Salary is often associated with white-collar office jobs and is paid to skilled personnel.
- Wages: Wages, on the other hand, are variable payments based on the number of hours worked or the amount of work completed. Wages are typically paid on a daily or hourly basis and are associated with blue-collar labor jobs. They are often paid to semi-skilled or unskilled workers.
- Cost: Salary is considered a fixed cost for employers as it remains the same regardless of the employee’s performance. Wages, however, are a variable cost as they can vary based on the employee’s productivity.
- Payment Cycle: Salary is usually paid on a monthly basis, while wages are paid daily or hourly.
- Nature of Work: Salary is commonly associated with administrative or office work, while wages are associated with manufacturing or process work.
- Key Resultant Area (KRA): Salaried employees often have KRAs, which are specific areas of focus or goals that determine their performance evaluation. Waged employees typically do not have KRAs and are evaluated based on their hourly work.
- Extra Pay for Extra Hours: Salaried employees generally do not receive additional compensation for working extra hours, while waged employees may receive additional pay for overtime.
Salary
Salary is a predetermined and agreed-upon amount of money paid to employees for their work and performance. It is often associated with white-collar office jobs and is paid to skilled personnel. Salary is considered a fixed cost for employers as it remains the same regardless of the employee’s performance. Salaried employees typically have KRAs (Key Resultant Areas), which are specific areas of focus or goals that determine their performance evaluation. They generally do not receive additional compensation for working extra hours.
Wages
Wages, on the other hand, are variable payments based on the number of hours worked or the amount of work completed. They are typically paid on a daily or hourly basis and are associated with blue-collar labor jobs. Wages are often paid to semi-skilled or unskilled workers. Wages are considered a variable cost for employers as they can vary based on the employee’s productivity. Waged employees typically do not have KRAs and are evaluated based on their hourly work. They may receive additional pay for overtime or extra hours worked.
Cost and Payment Cycle
Salary is a fixed cost for employers, while wages are a variable cost. Salary is usually paid on a monthly basis, while wages are paid daily or hourly.
Nature of Work
Salary is commonly associated with administrative or office work, while wages are associated with manufacturing or process work.
Conclusion
In summary, wages and salary are two distinct forms of compensation provided to employees based on their work and performance. Salary is a fixed amount paid on a regular basis, while wages are variable payments based on hours worked or work completed. The type of compensation, cost, payment cycle, nature of work, and additional pay for extra hours are key factors that differentiate salary from wages in HRM.
References
- What’s the Difference between Salary vs. Wage Employees? – Hourly, Inc.
- Difference Between Salary and Wages (with Comparison Chart) – Key Differences
- How to Manage Wages & Salaries | Small Business – Chron.com
FAQs
What is the difference between wages and salary?
Wages are variable payments based on the number of hours worked or the amount of work completed, while salary is a fixed amount of money paid on a regular basis, typically monthly.
Which jobs are typically paid a salary?
Salary is often associated with white-collar office jobs, such as administrative, managerial, and professional positions.
Which jobs are typically paid wages?
Wages are often associated with blue-collar labor jobs, such as manufacturing, construction, and service industry positions.
How are wages and salary typically paid?
Salary is usually paid on a monthly basis, while wages are typically paid daily or hourly.
Are wages and salary considered fixed or variable costs for employers?
Salary is considered a fixed cost, while wages are considered a variable cost.
Do salaried employees typically receive additional pay for working extra hours?
Generally, salaried employees do not receive additional compensation for working extra hours.
Do waged employees typically have KRAs (Key Resultant Areas)?
No, waged employees typically do not have KRAs. Their performance is usually evaluated based on their hourly work.
Can employees negotiate their wages or salary?
In some cases, employees may be able to negotiate their wages or salary during the hiring process or through performance-based reviews. However, this may vary depending on the company’s policies and the specific job role.