Main Project 1

A STUDY ON “WAGE AND SALARY ADMINISTRATION”

(WITH SPECIAL REFERENCE TO NCS SUGAR’S LIMITED, LATCHAYYAPETA) IN PARTIAL FULFILLMENT FOR THE AWARD OF THE DEGREE OF MASTER OF BUSINESS ADMINISTRATION

SUBMITTED BY

S.L. KUMAR

Reg No.096C1E0022

UNDER THE GUIDANCE OF

Asst. Prof.Mr.K.A.NAIDU M.com,M.B.A

DEPARTMENT OF HUMAN RESOURCE MANAGEMENT

NCS SUGARS LIMITED,LATCHAYYAPETA,

SEETANAGARAM (MANDAL)

VIZIANAGARAM (DISTRICT), AP

INDEX

1

CHAPTER - I

Introduction

Need for the study

Objectives of the study

Methodology of the study

Limitations of the study

CHAPTER - II

Profile of sugar industry

Profile of NCS sugar limited

CHAPTER - III

Theoretical framework

CHAPTER - IV

Wage and salary administration in NCS sugars limited

CHAPTER – V

Summary & Suggestions

Conclusion

CHAPTER – VI

Bibliography & Questionary

2

1.1 INTRODUCTION TO HUMAN RESOURCE MANAGEMENT

An organization, whether small or large, a business or an industrial enterprise, for its

growth, survival and continuance, it needs financial resource, material resources, and

human resources. Success or failure of an organization mainly depends upon

combination of above resources. Of all resources, human resources are the

participants in production and also the most beneficiaries of all resources directly

depend on efficient utilization of human resources.

Human Resource Management Definition :

According to Flippo., human resource management is the planning, organizing,

directing and controlling of the procurement, development, compensation, integration,

maintenance and reproduction of human resources to the end that individual

organizational societal objectives are accomplished.

Objectives of Human Resource Management :

To help the organization to attain its goals by providing well trained and well

motivated employees

To utilize the human resources effectively in the achievement of

organizational goals.

To enhance the job satisfaction and self actualization of employees by

encouraging and assisting every employee to realize his or her full potential.

To establish and maintain productivity, self respecting and internally

satisfying working relationships among all the members of the organization.

To bring about maximum individual development of members of the

organization by providing opportunities for training and advancement.

To develop and maintain a quality of work life which make employment in

organization a desirable personal and social situation.

To maintain high employee moral and sound human relations by sustaining

and improving various conditions and facilities.

3

Principles Of Human Resource Management :

a. Principal of maximum individual development :

The principle stresses on the development of every personal working in a

organization. By this employees will be able to develop themselves to the

maximum extent of their capabilities. Their abilities, productivity and

efficiency can be used achieving the objectivities of the organization.

b. Principle of scientific selection :

For the proper coordination between work and workers it is necessary to select

the right person for the right job. Workers should be selected after a careful

weighing of the requirements of the jobs.

c. Principle of high morale :

It is necessary to have a high morale among workers in an organization.

d. Principle of dignity of labour :

“Work is worship” workers should feel proud of their work and labor.

e. Principle of team spirit :

Team spirit must be developed in the workers. They should work collectively

and they should feel collective responsibility for the attainment of the

objective of the organization.

f. Principles of effective communication :

There must be effective channel of communication between the management

and the workers. The orders of higher authorities should reach the workers,

while workers request and grievances should reach the higher authorities in a

proper way.

g. Principles of effective utilization of human resources :

The skill and abilities of human resources should effectively utilize. Proper

training facilities should provided to workers.

h. Principles of participation :

This principle emphasis the ideas of labor participation in the management of

the enterprise.

4

Importance / significance of Human Resource Management :

The importance of human resource management can be classified at four levels :

1) Organizational significance :

a) Attracting and retaining the required talent through effective human

resource planning, recruitment, selection, placement, orientation,

compensation and promotion policies.

b) Developing the necessary skills and right attitude among the

employees and performance appraisal etc.,

c) Utilizing effectively the available human resources.

2) Professional significance :

a) Developing people on continuous basis to meet the challenges of their

jobs.

b) Maintaining the dignity of personal at work place.

c) Providing environment and incentives for developing and utilizing

creativity.

3) Social significance :

a) Maintaining balance between jobs and job seekers in terms of job

requirement and job seekers abilities and attitudes.

b) Providing most productive employment from socio psychological

satisfaction can be derived.

c) Utilizing human capabilities effectively and matching rewards for the

contribution made by people.

4) National significance :

a) Increasing in the size and complexity of organizations.

b) Rapid technological development and automation and

computerization.

c) Rise of professional and knowledgeable workers.

d) Increasing work man in the work force.

e) Growth of powerful nation wide trade unions.

5

1.2 NEED OF THE STUDY

Many organizations today, in order to competent enough to meet the challenges need

to continuously changes to develop wage and salary administration. Thus they are

supposed to adopt well built wage and salary administration.

The need for the study is that the performance of wage and salary administration is to

be studied in order to make changes if any, in order to retained the employees and

also attract the new employees to meet the challenges of the organization.

The project work is done for the practical fulfillment of the degree of Master of

Business Administration and to havepractical knowledge about the study.

The study also aims at evaluating the practical wage and salary administration under

taken by the organization in their work environment to improve their working skills.

6

1.3 OBJECTIVES OF THE STUDY

The present study has been conducted with the following objectives :

a. To know the various allowances and benefits provided by the management of

FACOR ALLOYS LIMITED to the employees.

b. To know the different policies, which are implemented by FECOR ALLOYS

LIMITED.

c. To find out the level of satisfaction of the workers of wages and salaries

provided by the management.

d. To study the strategies adopted in the wage and salary administration practices

of FACOR during the challenging situation faced by it and to come out if

such situations.

7

1.4 METHODOLOGY AND LIMITATIONS

Data has been collected mainly from secondary sources. Some primary data also been

collected.

The sources are :

a. Annual reports of FACOR

b. Files (DA files, Bonus files)

c. Bulletins.

In addition to the above, some information was made available through interview with

:

a. Assistant Personal Manager.

b. Clerks.

c. Workmen

The study made by me in Facor Alloys Limited was confined to determine wage and

salary method and practices being followed

a. The lack of availability of information.

b. The collected does not give the complete information.

c. As time period is 6weaks, it is very difficult to get a clear picture.

8

1.6 FRAMEWORK OF THE STUDY

The study is divided into six chapters.

Chapter-1 :

The first chapter deals with the introduction part of the human resource management,

need of study, objectives of study, scope of study, methodology and limitations of

study and frame.

Chapter-2 :

The second chapter consists the Industry profile and company profile.

Chapter-3 :

The third chapter deals with the conceptual approach i.e. main subject and topic

related concepts.

Chapter-4 :

The fourth chapter deals with the theoritical framework of the study.

Chapter-5 :

The fifth chapter deals with the analysis of wage & salary administration in FACOR

ALLOYS Limited.

Chapter-6 :

The sixth chapter deals with Summary, Findings, Suggestions and Conclusions.

9

Location Factors

In recent years, the location factors have influenced the dispersal of sugar cane

cultivated in subtropical regions and the development of cane in the south is mainly

responsible for bringing about location changes in the industry. Further the sugar

industry has received grater inputs from the completion of numerous irrigation

projects like the Irwin canal in Mysore (Karnataka), Nizamsagar and Thungabadra

projects in Madras (Tamilnadu). Added to this, the discriminatory policies in pursued

by the government are also responsible for the faster rate of the growth of the industry

in the south.

Given transport facilities and access is necessarily dependent up on the availability of

cane in the region. This concentration is substantiated from observation of the trend of

sizes established in different regions of this country in relation to availability of cane.

Comparatively the size of the sugar mills in Uttar Pradesh, Bihar and Maharashtra

where continuous availability of cane is assured is observed to the large. Grant of

production to the industry in 1931 also helped the units to increase their size. The

average per day crushing capacity of the sugar factories working in our country varies

from 220 tons to 3200 tons per day. In Uttar Pradesh and Bihar majority of the sugar

mills have a cane crushing capacity of 2500 tons of sugar cane per day is considered

to be an economical unit, under the present day working conditions.

Since 1950, the industry’s growth reveals that it is withstanding the controls and

regulations, and the industry did grow substantially. While, the number of factories

rise form 139 in 1950-51 to 432 in 2000-2001 the installed capacity increased ten fold

from 69.2 million tones 300 million tones in 1999-2000. sugar production swelled

from 1.1 million tones to 18.6 million tones during the same period. The government

laid down targets for sugar production, consumptions installed capacity during each of

the five year plans and ensured the growth of industry the growth of industry to meet

the steady rise in consumption

10

SCENARIO OF SUGAR INDUSTRY

India is the largest consumer and second largest producer of sugar in the world

(Source: USDA Foreign Agricultural Service). The Indian sugar industry is the

second largest agro-industry located in the rural India. The India sugar industry has a

turnover of Rs. 500 billion per annum and it contributes almost Rs. 22.5 billion to the

central and state exchange as tax, and excise duty every year (Source: Ministry of

Food, Government of India). It is the second largest agro-processing industry in the

country after cotton textiles. With 453 operating sugar mills in different parts of the

country, Indian sugar industry has been a local point for socio-economic development

in the rural areas.

About 50 million sugarcanes farmers and a large number of agricultural laborers are

involved in sugarcane cultivation and ancillary activities, constituting 7.5% of the

rural population. Besides, the industry provides employment to about 2 million

skilled/semi skilled workers and others mostly from the rural areas. (Source: ISMA

Website accessed on May 16, 2005). The industry not only generates power for its

own requirement but surplus power for export to the grid based on by product

bagasse. It also produces ethanol, an ecology friendly and renewable energy for

blending with petrol.

Indian sugar industry has grown horizontally with large number of small sized sugar

plants set up throughout the country as opposed to the consolidation of capacity in the

rest of the important sugar producing countries, where greater emphasis has been laid

on larger capacity of sugar plants.

Gone are those days when industries and its participants were highly protected with

control and protectionism policies. In the process of liberalization of economic

system, decontrolling policies like decontrol of sugar, steel, fertilizers etc.

11

Sugar industry is highly subsidized so far it also effects with new economic power.

The demand for sugar has been increasing due to increase in its consumption out of

changing habits of the people including common man and the need of the sugar also

demands the sugar industry to meet the internal profit of its production and is to be

exported to earn foreign currency within the changing market.

Sugar cane growers are facing inventory problems. Transportation problem,

marketing problems, many of the growers are illiterates who are not competent to

grow, sugar cane crop is on scientific lines. The financial problem is also other

important one with which they can not take decisions in the time to improve quality

and productivity, high transportation. Costs prices are not increasing in proportion to

the increase in cost of production due to inflationary tendencies.

The sugar producing unit purchase sugar cane form the sugar cane grower’s.

Therefore management of these units have to adopt marketing concept that is

customer orientation. (Growers Orientation) various incentives are available from the

government for developing sugar industry. But the industry in India is facing several

problems.

12

ECONOMY ROLE:

India is one of the largest sugar producing and consuming country in the world. The

sugar industry plays a viral role in rural areas and provides direct and indirect

employment in the country. India emerged as the largest producer of white sugar in

the world.

The central government has already de-licensed. The sugar productions they purpose

to decontrol the release mechanism by introduction of reduce on sugar price. At

present India enjoys second place in the world sugar production. Central as well as

state government has been getting 140 cores in the form of excess taxes from sugar

industry. The industry has been providing substance to 5.5 lakhs workers and

sustaining about 4.5 cores agricultures. Its total capital investment is amount to Rs.

1560 crores.

The sugar industry has a unique place in inidan economy and rural development

because of its multiple contributions in terms of employment and provisions of raw

materials to other industries. The sugar industry is the second largest agro based

processing industry. Thus occupies a vital role among the 4 major sugar producing

countries in the world. The other 3 are being USA, Brazil and Cuba.

13

IMPORTS & EXPORTS OF SUGAR:

In view of cost of cane and sugar production in India, it could not complete with other

favorable countries and to honor commitments and maintain international standard

quality. The sugar exports began in the year 1958 under the sugar export promotions

act up to middle of 1961. Government did not subsidize losses on exports and sugar

factories got prorate payment. However in view of substantial quality of sugar in later

year’s government stopped subsidizing these losses. The export policy has been

largely influenced by the need for earning foreign exchange.

GROWTH OF SUGAR INDUSTRY

There were only twenty nine factories in India during the year 1931. Protection

granted to the industry in 1931 brought tremendous growth in the number of

locations. The number of factories in operation had grown from 29 to 140 in 1950-

1951. Out of which 110 factories were in northern parts of India. During the next

decade the number of factories increased to 174. Out of which 116 factories are in the

sub tropical region of northern India. Finally, the number of factories has grown from

200 in 1956 to 1966 to 417 in 1994 to 1995 of the factories are located in the northern

India.

The industry is predominantly localized in the Uttar Pradesh, particularly in the

districts of Meerut, Saharnput Bijmour, Barely, Muzaffar Nagar Moradabad and

Rampur, next Uttar Pradesh. The industry is mainly concentrated in Maharastra, Bihar

and in the eastern costal districts of Andhra Pradesh. If we refer to the historical event

in the sphere of sugar industry, Uttar Pradesh and Bihar occupied the predominant

position as far as the location pattern of the industry is concerned, and still these states

are enjoying the same position.

14

The reason of such heavy concentration in the states of Uttar Pradesh enjoys in

respect of cane cultivation is due to the advantages confirmed by the rich and fertile

alluvial soil of the genetic plain, the bulk of which contains adequate quantities of

lime and potash, the pressure of thin varieties of cane admirable suited in the climate

cheap and extensive of cheap and extensive irrigation facilities. The concentration of

sugar cane crop incompact blocks enables the sugar factories to get fresh suppliers of

sugar cane direct from the fields. Moreover, the cost of the cane cultivation is less and

the cultivators are not accustomed to raise alternative crops like ground nuts, chilies,

plantains etc.

STATE WISE SUGAR PRODUCTION

STATE 2004-05 2005-06 2006-07 2007-08 2008-09 2009-10

A.P

Gujarat

Karnataka

Maharastra

U.P

Tamilnadu

Punjab

Bihar

All India

1048

1055

1550

5613

5260

1839

593

342

18528

1210

1252

1868

6219

5651

1644

586

408

20145

886

1066

1116

3175

4552

921

390

272

13546

1203

832

1132

2303

5152

1475

337

270

13600

1276

1244

2009

5264

5564

2138

388

419

19300

1924

1390

2542

9013

8352

2426

550

483

28200

15

SUGAR CANE PRODUCTION

Year No. of factoriesCane Production

(millon tones)

1950-51 138 57.05

1960-61 174 110

1970-71 215 126.37

1980-81 315 154.25

1990-91 385 241.05

2000-01 436 295.96

2001-02 434 297.21

2002-03 453 287.38

2003-04 422 233.86

2004-05 400 237.06

2005-06 455 281.17

2006-07 582 345.31

2007-08 582 329.09

2008-09 582 280

2009-10 590 315

16

ZONE WISE SUGAR FACTORIES IN INDIA 2009-10

States Public Private Co-Operative Total

Punjab - 7 16 23

Haryana - 3 12 15

Rajasthan 1 1 1 3

U.P 33 70 28 131

Uttaramchal 2 4 4 10

M.P 2 4 5 11

Chandigarh - - 1 1

Gujarat - - 22 22

Maharstra - 23 165 188

Bihar 15 14 - 29

Assam - 1 2 3

17

Orissa - 5 3 8

West Bengal 1 1 - 2

A.P 1 26 15 42

Karnataka 3 25 23 51

Tamilnadu 3 19 16 38

Pondicherry - 1 1 2

Kerala - 1 1 2

Goa - - 1 1

Total 61 205 316 582

18

ANDHRA PRADESH:

1. The Anakapalle

2. The Etikoppaka

3. The Thandava

4. The Chodavaram

5. NCS Sugars limited

6. Sri Vijayarama Gajapathi

7. GMR Industries

8. The KCP (Vuyyuru)

9. The KCP (Lakshmipuram)

10. Delta Sugars

11. Nava Bharat

12. Sri Saravaraya

13. The Andhra Sugars (Tanuku)

14. The Andhra (Taduvai)

15. Jeypore Sugars

16. The Andhra (Bhimadole)

17. Nizam Deccan (Shakarnagar)

18. Nizamabad

19. Gayatri Sugars

20. Trident Sugars

21. Nizam Deccan (Momobogipally)

22. Ganapati

23. The Chittpr

24. KBD Sugars

25. Sri Venkateswara Sugars

26. Prudential

27. Sudalagunta Sugars

28. The Kovur

29. Empee

30. Sarita Sugars

31. Nizam Deccan (Muthyampeta)

19

PROBLEMS OF SUGAR INDUSTRY IN INDIA:

1. Excessive Control:

The industry is suffering from changing of Government Policies. The Government has

no fixed policy regarding the price and distribution of sugar.

The production of sugar is influenced by the purchasing price of sugar cane

depending upon the cost of cultivation, the inefficiency and uneconomic nature of

production in sugar mills to yield and short crushing season. The high pressure sugar

cane and the heavy excise duties by the government are responsible for the high cost

of production of sugar in India.

2. Under Utilization of by-products:

In sugar production we get two by products, molasses and bio-gas, while molasses

can be used in alcoholic preparation. These factories are not well developed in India.

And bio-gas can be used in paper industry. But this is not being utilized properly by

out paper industry. In India the yield of sugar cane per acre and percentage recovery

of sugar from cane juice is very low.

3. Short Crushing Season:

Although the land is utilized through out the years, crushing season is limited to 3-4

months in a year. Hence factories have to be closed for the remaining period. This is

making uneconomic too.

20

4. Obsolescence:

Most of the factories in the private sector were set up five to six decades ago. Their

machinery has by now duplicated. The cost of production of such units is unduly

owing to less mechanical efficiency and more down time. It will require more money

for modernization/renovation of such factories.

5. Technology:

The level of technology in the Indian sugar industry is quite high and a number of

developing countries have borrowed Indian sugar technology, unfortunately however

many of Indian factories had been set up in early 30’s and have become absolute. For

these the need of the hour is modernization, rehabilitation and expanding also.

Attention needs to be paid to cane development.

6. Output Trends:

Over production is due to cyclical nature and seasonal conditional and cultivations of

average sugar cane. The fluctuation in the production of sugar cane is a major

problem of the day.

Sugar Industry in A.P

AP occupies 4th place in respect of sugar growing in the county. Sugar cane is

cultivated in the districts of Srikakulam, Vizag, East Godavari, West Godavari,

Krishna, Nizamabad, Cuddapah, Chittor and Guntur. The mill at Bodhan in

Nizamabad district of AP is the highest sugar producing unit in Asia.

Three more units were set up under the same management. In our country total cane

under sugar cane 1/4th belongs to AP and this occupies 9th place in the industry.

21

NCS SUGARS LIMITED

NCS Sugars Ltd., was incorporated on 6th june 2002 for the purpose of purchasing the

core assets and business of Latchayyapeta unit of Nizam Sugars Ltd (NSL), a

Government of Andhra Pradesh undertaking.

Latchayyapeta unit is one of the sugar mills operated and owned by NSL. It was set

up in the year 1995 with a crushing capacity of 2500 TCD by replacing two units at

Bobbili (850 TCD) and Seethanagaram (600 TCD) that had been taken over by

Government of AP in 1986. Latchayyapeta is the principal industrial employer in the

region.

The Sugar Mill is located in the eastern part of AP about 800 Km north east of

Hyderabad and 1Km to the north of the village of Latchayyapeta. It is 6 Km from

Bobilli, a town with a population of 75000, in Seethanagaram Mandal, Vizianagaram

dist A.P.

Latchayyapeta is well served by transport facilities. It is located some 115 km north of

the airport and one of india’s major seaports at the city of visakhapatnam on the Bay

of Bengal. The State Highway 34 (SH-34), between Vizianagaram and

Seethanagaram, runs immediately to the west of the Mill, separating the mill lands

from the residential colony lands. Bobilli Railway station and Bolilli Bus stand are

about 6 km form the sugar factory.

The existing potential for cane production and supply is of the order of 3.5 to 4 lakhs

mt. cane development programs, irrigation and use of organic and / or chemical

agents could increase both the acreage and yield and supply an additional 50-65,000

mt in a short time horizon. This level of supply would sustain the 2500 TCD plant at

Latchayyapeta, allowing for 10% of total production to be retained for seed and 1%

for household use by cane growers. The company completed 1st year of operation on

30the April 2003 with sugarcane crushing of 2.25 lakhs MT.

22

With a growth that consistently established, now NCS Sugars Limited is a full fledged

sugar manufacturing unit with the state-of-art technology managed by a crew of

professionals from various capacities, poising towards a crushing capacity up to 6000

TCD.

The plant has been allotted a zone of about 43 000 acres of agricultural land

consisting 17 mandals, 820 villages and about 22 000 potential farmers in the zone.

The major thrust is given for cane development and uplifting farmers living standards

by increasing their per capita income. This in turn will result in sufficient quantity of

cane needed for optimum utilization of our facility to crush up to 6000 MT per day,

during the seasons.

NCS Sugars Limited has also ventured into co-generation of power up to 20MV, by

using the bagasse from the sugar unit, which is an eco-friendly venture that could take

care of the electricity requirements of AP TRANSCO.

23

BRIEF HISTORY OF THE ORGANISATION

Sri R.G.V.R.K Ranga rao, land lord, Raja of Bobbili and Ex-Chief Minister for

combined states of Tamil Nadu and Andhra Pradesh had established sugar factory

named as “Sri Rama Sugars & Industries Ltd.” At Bobbili under private sector in the

year 1935 with 300 tonns capacity and subsequently expanded to 850 M.T per day

crushing capacity. It is the first sugar industry for combined states of Tamil Nadu and

Andhra Pradesh. He also started another sugar factory near Bobbili i.e., at

seethanagaram for the benefit of the surrounding can growers with 650 M.T per day

crushing capacity at seethanagaram. Due to losses incurred by the factories, the

operations are closed in the year 1976 at Bobbili and 1978 at Seethanagaram

respectively.

Then the representation made by the cane growers, local business people and

workmen, the Government of Andhra Pradesh has takeover the factories and handed

over to the Nizam Sugar Factory Ltd., (Government Company) to run the factory as

authorized controller under Industries Development and Regulation Act. These two

factories were permanently merged with the Nizam Sugar Factory Ltd (Government

Company) in the year 1986 under Act 30 of 1986 by the former Chief Minister Sri

N.T Rama Rao.

Subsequently, The Nizam Sugar Factory Ltd., has changed the name as the Nizam

Sugars Ltd., The Nizam Sugars Ltd., successfully run the Factories till 1990. Due to

old machinery and less crushing capacity resulting poor performance of the

production, the Nizam Sugars Ltd., has decided to construct new new Sugar Factory

in between Seethanagaram and Bobbili villages for the benefit of both factories, cane

gross as well as workers. Then the Hon’ble Ex-Chief Minister Sri P.Janardhan Reddy

had laid the foundation stone to start construction of 2500 TCD sugar Factory at

Latchayyapeta in the year 1991.

24

Accordingly the construction and erection works have been completed in the year

1995 and the new factory with 2500 TCD capacity was inaugurated by Hon’ble Ex.

Chief Minister Sri.N Chandrababu Naidu on 28th December 1995 and the factory stars

its commercial crushing for the season 1995-96 season onwards. The bobbili &

Seethanagaram Sugar Factories were stopped and condemned and sale the machinery

at Bobbili and Seethanagaram.

Due to Privatization policy of the Government of Andhra Pradesh and the decision of

the Government of Andhra Pradesh to privatize entire the Niam Sugars Ltd., and

implement the same through Implementation Secretary, Secretariat, Hyderabad.

Accordingly the process of privatization and other matters entrusted to call tenders

and finalization of privatization process as per the guide lines of the World Bank,

through implementation Secretary, Secretariat, Hyderabad. The NCS Estates (P)

Limited has quoted highest bid and taken over the Nizam Sugars Ltd., sugar unit

situated at Latchayyapeta in the name and style of the NCS Sugars Limited and was

inaugurated the factory on 17th December 2002 under the New Management.

25

OBJECTIVES OF THE COMPANY

The objectives of the company set out in the memorandum of association as under:

To establish factories for manufacturing of sugar

To establish the sugar cane units properly and to increase the production of the

sugar cane.

To supply least variety of cane seeds.

To give maximum price to suppliers of sugar cane.

To export sugar and other products to the farmers.

To introduce the agriculture development schemes and other subsidiary

schemes for the farmers.

Other objectives like facilities for employees and development of area.

26

QUALITY POLICY

We are committed to achieve continual improvement and enhance satisfaction of

customers through:

Manufacture and supply of consistent quality of sugar and its by-products at

an optimum cost complying with customer requirements.

Generation of reliable power with maximum Plant Load Factor.

Extending necessary support to cane growers to optimize per acre yield that

would result in larger volumes of supply.

Continually improving the effectiveness of management systems and

practices.

Compliance with applicable statutory and regulatory requirements.

Seeking participation of employees at all levels, to inculcate total quality

culture.

GROWTH OF THE COMPANY

The factory operations under the new management of NCS Sugars had

commenced on 17th January 2003.

After taking over, NCS Sugars Limited has registered a phenomenal growth in

terms of production and yield.

During the year 2006-07, the company expanded its existing capacity of 2500

TCD to 6000 TCD and commissioned a 20 MW Co-generation plant.

A 240 KLPD Ethanol Plant is in the pipeline, thereby it becomes a sugar

complex where many activities related to sugar manufacturing and its by-

products would happen.

27

PRESENT PROJECT OF THE COMPANY

The company is presently manufacturing sugar at its factory at latchayyapeta.

Company manufacturing sugar with raw sugar in the off season due to un availability

of the cane. Company imports raw sugar from brazil and it is the first company in

India in the sugar production with importing raw sugar from other country. The

capacity of the company in producing the sugar is 94 bags per day which is increased

from the previous production 86 bags per day. The company target is to produce 95

bags per day and it’s almost reaches their target and tries to reach target completely.

The co-generation plant is producing power with the capacity of 20 mw per hour and

it continues its same project at present. Company seeks to establish a ethanol plant in

the nearest place of sugar factory and also seeks to establish another sugar plant to

form complex sugar factory.

LAND AND BUILDINGS OF THE COMPANY:

The company presently approximately owns 200 acres of land at latchayyapeta. There

the existing sugar units located had the extent of area covered by building in 71.56

acres. The company at present has 13 sugar godowns for storing 10,00,00 bags of

sugar.

28

WELFARE FACILITIES PROVIDED BY THE COMPANY

Statutory safety facilities:

Staff shoes

Uniforms

Other safety equipment

Statutory welfare facilities

Washing facilities

Canteen facilities

Restrooms and lunchrooms

Dispensary

Facilities for sitting

Non-statutory welfare facilities

School bus

Arranging picnics

Other benefits and allowances

Bonus

Gratuity

Medical expenses for insured persons

Retaining allowances

Provident fund

29

TRADE UNIONS

In the NCS sugars limited there are four unions. All unions are registered there is no

recognition of any unions since the establishment of new plant.

Elections are also not held between the unions since a long time.

Union leaders are outside leaders only. The details of various unions are furnished

below.

The NCS sugar factory staff and workers union latchayya peta registred NO-

D/11/7/90-CITUC

The NCS sugar Karmic Sangh Uuion Regd.NO.-3/11/76 BMS

The NCS sugar workers & employee union Red.No-1558/96

Independent union

Sri Rama Sugar mills Labor Union Regd-No-715/47-AITUC

Awards and honors of the company

NCS Sugars Limited is the recipient of Best Cane Development award for 2007,

presented in R & D workshop at Vijayawada by Acharya N G Ranga Agricultural

University & Commissionerate of suger, Government of Andhra Pradesh.

2nd place in Best Cane Development Award by SISSTA-2007. This is the FIRST

Sugar Factory to have associated with 22000 farmers covering half the district of

Vizianagaram.

Board of Directors of the Comapany:

Sri N. Nageswara Rao Managing Director

Sri N.Murali Director

Sri N.Srinivas Director

Sri Janki Manohar Chief Executive

30

Organizational Chart of NCS Sugars limited

31

DEPARTMENTS IN THE NCS SUGARS LIMITED

Cane Department.

Process Department.

Engineering Department.

Purchase and Stores Department.

Sales Department.

Co-Generation Department.

Finance Department.

Personal Department.

Electronic Data Processing Center.

CANE DEPARTMENT:

The functions of this department are followed by under the directions of the cane

manager. The main function of this department is procuring raw material and supply

to the production department for crushing to produce sugar. In addition to this

function here they give incentives to the formers and so on.

32

Key functions:

(Raw Material Supply-Fixing Incentives –Fixing Cane price-Bills Payment to

formers)

Procuring and supply of raw materials:

Provide incentives to the formers:

Fixing of cane price

Bills paid through accounting department

Central Government fix the price of the sugar cane across India called as “Fair and

Remunerative Price” (FRP) formerly known as statutory minimum price (SMP) is Rs

1312 per tone and purchase tax Rs 60, in addition to this the company paid 378 Rs to

encourage the formers towards sugar cane production.

33

CANE PRICE PAID FROM 2005 TO 2010

Year SMP PT ACP TOT PRICE

2004-05 866.00 60 - 926.00

2005-06 833.00 60 - 893.00

2006-07

2007-08

880.00

820.50

60

60

-

119.50

940

880.50

2008-09

2009-10

811.80

901.80

60

60

103.20

238.20

871.80

961.80

2010-11 1312.00 60 378.00 1750.00

Supportive/off seasonal functions:

Technology Development:

Controlling methods of sugar cane diseases

Awareness programs:

34

Structure of Cane Department:

35

Deputy General Manager (HOD)

Manager (HOS)

Deputy Manager (Area Manager)

Agricultural Assistant

Field Men

Deputy General Manager (HOD)

Manager (HOS)

Deputy Manager (Area Manager)

Agricultural Assistant

PRODUCTION DEPARTMENT:

The production department is the key department for the organizations development if

it performs well the company will grow, if the department not performs well it may be

leads to organization wealth decrease. The entire income incurred to the organization

form product sales only. That’s why this department has such importance.

The function of this department is to produce sugar and its by products from the cane

as well as from raw sugar.

To operate machinery well.

Particulars of cane crushed:

Duration 2008-09 2009-10

No of Days 175 189

Cane Crushed (Tonnes) 11,96,365 12,83,994

Sugar Produced (Qts) 13,95,110 13,93,770

Recovery (%) 11.14 10.85

Turnover (Rs in Lakhs) 22,319 16,792

36

NCS SUGAR’S LIMITED TOTAL PRODUCTION

YearProduction

(in Quintals)

2003-2004 11,26,400

2004-2005 13,09,340

2005-2006 9,23,650

2006-2007 10,75,620

2007-2008 12,24,740

2008-2009 13,95,110

2009-2010 13,93,770

2010-2011 14,25,620

Sugar Manufacturing Process:

37

Sugar Cane

Weigh Bridges

Cane Carriers

Cane Cutter

Mascreation water-Shredder Mills-Bagasse to Boiler as fuel

(Through water weighing scale)

Raw/Juice (Mixed)

Juice Hearts

Timing-juice treatment tanks- sulphation so2 gas

Clarifies-Filter cake througotary vaccum filter

Evaporators

Syrup-Sulphited

Vacuum pans

A-1, B-1, B-2,C Massecuites Crystallizers

Centrifugal Machines- (AH, AC, BH, CL, FM, AB, Heavy & Light Molasses)

Sugar Grader

Sugar Bagging (Grade Wise)

ENGINEERING DEPARTMENT:

This is the department for maintaining all machineries, which are used in the

production process. Here the chief engineer is the head of the department and he is the

responsible person for the function in the department.

The key function of the engineering department is maintaining of machineries.

The maintaining types are

Periodic maintenance

Break down maintenance

General maintenance

Checking of the machineries at time to time and observing the performance of the

machinery in the process function are also the functions of the department.

Another function of this department is managing production process.

Machinery installation.

Structure of the Department:

38

PURCHASE AND STORES DEPARTMENT:

This department is managed by material manager. He is the responsible for all the

functions in the department. The main function of this department is purchasing the

general items like material oil, lubricant of nuts and bolts, electrical items basing on

the requirement of general department.

This time for item required to supply that item is maximum 1 week. It’s called as pipe

line. The company mostly purchases items from Gujarat, Karnataka. They prefer

brand items only and go to manufacturer directly to purchase. They go to traders for

purchase in few cases. The stores department functions is to store the purchased items

safely based on the item or chemical.

Department Chart:

39

Chief Engineer

Senior Manager Engineer

Deputy Manager (Engineering)

Engineers

Work Men

Purchase and Stores

Manager Material

Manager Purchase

Clerks

SALES DEPARTMENT:

The sales department is controlling by the deputy general manager (accounts). The company goes to two types of sales as per central government orders, those are free sales and levy sales.

Levy Sales:

10% of the total production is goes to levy sale. This sugar is for the public

distribution. The price for lavy sales is fixed by the central government of India.

Free Sales:

90% of the total production of the sugar sold in the form of free sales. The sales of

this sugar done according to the sales orders given by the central government.The

40

Sales

Levy Free Sales

SalesSalesSalesSales

central government releases purchasing orders relating to quality of sales to be sold on

the basis of total production of the sugar in the completed year.

Functions of this department:

Issuing gate pass to the lorries for weighment after receiving the delivery

orders by the deputy general manger.

Reporting of sales transactions to the deputy general manager

Record keeping regarding to the sales transactions done in the company.

Maintaining accounts.

Structure of the Department:

41

Director

Sugar Trade Head

Assistant Sugar Trade

Deputy General Manager (Accoutns)

Accounts Assistant Godown Incharge

Godown Assistant

CO-GENERATION DEPARTMENT:

A co-generation plant was established beside the NCS Sugar’s limited. It was

commissioned form 17th Mach 2007. Two departments are in the co-generations plant

one is technical department and the other one is executive office. Hence the Deputy

General Manager manages the total co-generation plant.

The plant total capacity is 20mw/h, and they provide 4.5mw to the sugar plant in the

seasonal period and 1mw in the off season. 10% of the total production consumed for

the axillaries of the co-generation plant and the remaining should exported.

The byproduct begasse of sugar production is used as the raw material for the power

generation. Coal is used as raw material while in the off season. This coal is imports

from Indonesia.

42

EXECUTIVE OFFICE:

This is the head office of the co-generation plant, total functions which are not related

to technical are done here.

Functions of executive office

Equipment availability:

Here they arrange the equipments to the power generation like fuel, machinery, man power.

Maintenance of schedules:

The co-generation plant is 24 hours working plant that’s why they maintain schedules

for the workers. Here the workers follow three shifts A, B, C.

A shift—6AM to 2PM

B shift—2PM to 10PM

C shift—10PM to 6AM

General Shift—8AM to 5PM

43

Power export an import activities:

The power after consumed by the sugar and co-generation plant is exports to the other

states. The deputy general manager and the other staff maintain this function.

Technical office functions:

The main function of the technical department is operate and controlling of the

machinery. They operate the machinery form the separate room by using some panels

are control panel, generator panel, in that panels displays the information regarding to

the working of machineries and power generation based on that information they

operates and control them

Structure of the co-generation department:

44

Deputy Manager (Technical)

Deputy General Manager

Manager Deputy Manager (Q.C)

Electical Engineers

Technicians Instrumental Engineers

Operation Maintenance

Chemist Plant Operators

FINANCE AND ACCOUNTS DEPARTMENT:

The main function of financial development is to arrange the funds for salaries, wages

for the employees and daily wages, to arrange payment to the sugar cane growers for

the purchase of other considering goods, oils, chemicals, spare parts of the machinery

and they have to receive sale proceeds by way of selling products.

Finance Department Chart:

45

Accounting Department

Manager

Finance & Accounts

Asst Manager Finance & Accountants

Asst Accountant Officer


Manager

Finance & Accounts

Asst Manager Finance & Accountants

Asst Accountant Officer

Clerks


Manager

PERSONNEL DEPARTMENT:

The main function of personnel department is to look after with manpower planning,

recruitment, selection, placement, induction, promotion, and transfer, demotion,

separation, lay-off, retrenchment, training, wage & salary administration.

The personnel functions also include the welfare aspects of labour are concerned with

the conditions of work and elements such as the provision of canteens, housing,

transport, medical, education and health & safety provisions.

INDUSTRIAL RELATIONS:

To keep up discipline in the organization is another function of personnel department.

If any worker commits a mistake, the management must take action according to the

sending.

46

Clerks

EMPLOYMENT:

Recruitment: it is concerned with quantity and quality of man power. Technical staff

is recruited from employment exchange. Take apprentices form employment

exchange for a period of 1 year. They give stipend for that year. After 1 year they are

revealed from service. It is for lower cadre like filters, technical staff etc. to receive

the executive rank officers they are giving paper ads in a leading news paper. They

recruit these employees based on experiences.

Solution:

Selection process typically follows standard pattern beginning with an initial

screening interviews and including the final employment decision.

Placement and probation:

47

Charge Sheet

Enquiry

Suspension

Dismissal

A proper placement of a worker reduces employee turnover, absenteeism and accident

rates and improves more probation period, is 1 year. It extended to them on for with

permanent employees.

Promotions and transfers:

Promotions are based on the seniority and ability. But most of them are based on

seniority. Transfer are due to convenience of the company employee. Temporary

transfer due to ill health. Permanent transfers arising out of ill health.

Time, office management:

Procedure of taking attendance: the attendance procedure followed in this

organization in the case of workers they had given the token numbers in this come to

the organization they inform their token number in the time office. In the case of staff

they are given token numbers they directly sign in the register. And also use bio-

metric system.

Shift Timings:

As the manufacturing process of the company is continuous in the nature, the working

hours for the employees and workers are as follows during the season. For the staff

includes executives, supervisors, clerks, office boys etc., who are not connected with

manufacturing process. i.e., General Shifts from 9AM to 6PM for the Sr.Engineers,

A.E’s., J.E’s, Supervisors, manufacturing chemicals, lab chemists and workers who

are connected with manufacturing process.

‘A’ shift—from 6.00 AM to 2.00 PM

‘B’ shift—from 2.00 Noon to 10.00 PM

48

‘C’ shift—from 10.00 PM to 6.00 AM

Structure of the personnel department:

ELECTRONIC DATA PROCESSING CENTER:

This department is the key department for the organization because the information

relating to the all department is stored in this department. They maintain separate

database for store the all these data. EDP in charge is the head for this department and

three EDP assistants are working in this department.

Objective of this department:

Prevent data losses

Reducing network problems

Functions:

The most common function of this department is day by day incremental back

up.

Network checking

49

Time Office Asst

Unit Head

HOD

HOS

Jr. Officer-HR In-Charge-HR

Asst. Payroll Time Office Asst

Time Office Asst

Total systems in the organization are controlling by this department.

Bio-metrics dual checking. Through this they record daily attendance of the

executives, employees and workers.

Video conferences are held in this department. Through this top management

participate in meetings with other executives in the outside of the organization.

They ready to develop ERP.

Pay lists are creating here.

CHAPTER-III

THEORITICAL FRAME WORK

50

WAGE AND SALARY

One of the most important areas of Human Resource Management is compensation

Management. The soundness of compensation management depends upon the amount

of wage and salary paid to an employee for a fair days work. Despite the conclusions

of morale studies wage or salary is significant to most of the employees as it

constitutes a major share of their income pay in one form or another is certainly one

of the main springs of physical needs. It provides recognition a sense of

accomplishment and determines social status. Hence formulation and administration

of sound remuneration policy to attract and retain right personnel in right position is

the prime responsibility of any organization.

Wages and salary administration is essentially the application of a systematic

approach to the problem of ensuring that employees are paid in a logical, equitable

and fair manner.

Wage:

51

Wage and salary are often discussed in loose sense, as they are used interchangeably.

But ILO defined the term wage as “the remuneration paid by, the employer for the

services of hourly, daily, weekly and fortnightly employees.” It also means that

remuneration paid to production and maintenance or blue collar employees.

Salary:

The term salary is defined as “the remuneration paid to all clerical and managerial

personnel employed on monthly or annual basis”.

“The direct compensation paid to an employee compensating his service to an

organization”. Salary is known as ‘basic pay’.

Earnings:

Earnings are the total amount of remuneration received by an employee during a

given period. These include salary (pay). Dearness allowance, house rent allowance,

city compensatory allowance, other allowances, overtime payments etc.

Nominal wage:

It is the wage paid or received in monetary terms. It is also known as money wage.

Real wage:

Real wage is the amount of wage arrived after discounting Nominal wage by the

living cost. It represents the purchasing power of money wage.

Take home salary:

52

It is the amount of salary left to the employee after making authorized deductions like

contribution to the provident fund, life insurance premium, income tax changes, and

other charges.

Minimum wage:

It is the amount of remuneration, which could meet the “normal needs of the average

employee regarding as a human being living in a civilized society”.

It is defined as the amount of remuneration, “which may be sufficient to enable a

worker to live in reasonable comfort, having regard to all obligations to which an

average worker would ordinarily be subjected to”.

Principles of Wage and Salary Administration:

There are several principles of wage and salary plans, policies and practices.

The important among them are:

Wage and salary plans and policies should be sufficiently flexible or

responsive to changes in internal and external conditions of the organization.

Wage and salary administration plans must always be consistent with overall

organizational plans and programs.

Wage and salary administration plans and programs should be in conformity

with the social and economic objectives of the country like attainment of

quality in income distribution and controlling inflationary trends.

Management should ensure that employees know and understand the wage

policy of the company. Workers should be associated in formulation and

implementation of wage policy.

All wage and salary decisions should be checked against the standards set in

advance in the wage policy.

Wage and salary plans should simplify and expedite other administrative

processes.

53

WAGE FIXATION INSTITUTES IN INDIA:

Collective bargaining and adjudication

CB is procedure in which compromise is reached through balancing of opposed

strengths. It is a means through which employee prol-leiw, relating to various issues

including wages are settled, if these problems are settled through CB they may be

settled through voluntary arbitration or adjudication.

Wage board:

Government of India set up tripartite wage board on industry wise basis to fix and

revise pay. The boards are set up on ad-hoc basics on the demand of trade unions and

employees as there is no low providing for their establishments.

54

A wage board consists of an impartial chairman, two independent members and 2 or 3

representatives of workers each. The recommendation of wage boards is first

submitted to the government. Government may accept, modify or reject the

recommendation.

While determining wages, wage boards take into accounts the following factors:

a) Need based minimum wages

b) Industries capacity to pay.

c) Productivity of labor

d) Prevailing rates of wages

e) Various wage legislation

f) Level of income and its distribution

g) Place of the industry in the economy

h) Needs of industry in a developing economy

i) Requirements of social justice.

j) Need to provide incentive for improving productivity

Pay commission:

This is another institution which fixes and revises the wages and allowances to the

employees working in the government and government departments. Pay

commissions are separately constituted by Central, and State Government. Central

Government so far has appointed five pay commissions.

WAGE AND SALARY ADMINISTRATION IN NCS SUGARS LIMITED

Human Resource Management is the part of the management process that is

concerned with the management of Human Resources in an Organization. Human

Resource Management is a multidisciplinary activity, utilizing knowledge and inputs

drawn from psychology, sociology, anthropology and economics etc.

The scope of Human Resource Management is very large. Wage and Salary

administration plays a prominent role in each and every organization. Wage and

salary administration is essentially the application of a systematic approach to the

problem of ensuring that employees are paid in a logical, equitable and fair manner.

55

The basic purpose of wage and salary administration is to establish and maintain an

equitable wage and salary structure and maintenance of an equitable labor cost

structure. So that satisfaction of employees and employers is maximized and conflicts

minimized.

The wage and salary administration concerned with the financial aspects of needs.

The needs of the employees so that reward can be individually designed to satisfy

some need. Before they do anything, they look for a reward or pay-off. The reward

may be money or promotion, but more likely it will be some pay-off a smile

acceptance by a peer, receipt of information, as kind word of recognition etc.

The management of Jeypore Sugar Company has Designed a well Structured wage

and salary system. In the organization the salaries are paid at three levels namely

salaries to non managers including permanent and seasonal employees, salaries to

executives and salaries to management staff.

LIST OF GRANTS & ATTACHED PAY SCALE

S.NO Grade Pay Scale

1 Un skilled-II 5700-40-6100-50-6600-60-7200-70-7900

2 Un skiled-I 5850-50-6350-60-6950-70-7650-80-8450

3 Semi skilled 6035-60-6635-70-7335-80-8135-90-9035

4 Skilled & clerical grade-IV 6225-70-6925-80-7725-90-8625-100-9625

5 Skilled & clerical grade-III 6350-75-7100-85-7950-95-8900-105-9950

6 Highly skilled & clerical grade-II

6470-80-7270-90-8170-100-9170-110-10270

7 Supervisory & clerical grade-I

6625-90-7525-100-8525-110-9625-120-10825

The above table-shows what grades are in the NCS Sugars Limited and the pay scale

in the NCS Sugars Limited that is paid for workers.

56

The table shows the pay scale non-managers in the company. There are basically three

types of non-managing employees. One is supervisory cadre and the second one is

clerical cadre and the third one is the skill-based category.

In the unskilled grade II’s pay scale starts with 5700/- basic in this yearly increment is

40/- once the scale cross the 6100/- the increment will grow up to 50/- the scale ends

at 7900/- basic.

Unskilled grade I’s pay scale stats with 5850/- basic in this yearly increment is 50/-

once the scale cross the 6350/- the increment will grow up to 60/- the scale ends at

8450/- basic.

Semi skilled pay scale stats with 6035/- basic in this yearly increment is 60/- once the

scale cross the 6635/- the increment will grow up to 70/- the scale ends at 9035/-

basic.

In the skilled and clerical grade-IV’s pay scale stats with 6225/- basic in this yearly

increments is 70/- once the scale cross the 6925/- the increment will grow up to 80/-


9625/- basic.

In the skilled and clerical grade-III pay scale stats with 6350/- basic in this yearly

increments in 75/- once the scale cross the 7100/- the increment will grow up to 85/-


9950/- basic.

In the skilled & clerical grade-II pay scale starts with 6470/- basic in this yearly

increments is 80/- once the scale cross the 7270/- the increment will grow up to 90/-

57


10270/- basic.

In the supervisory & clerical grade-I’s pay scale starts with 6625/- basic in this yearly

increments is 90/- once the scale cross the 7525/- increment will grow up to 100/-


10825/- basic.

SUGAR FACTORY EXECUTIVES

Sno Name Designation scale of pay

1 M.janaki Manohar Chief Executive 66500

2 K.Srinivas Personal Manager 23750

3 K.Ravi Kumar Executive-HR 18387

4 T.Srinivas Raju Liaison Officer 14250

5 M.Suryanarayana Sr.Manager (Operation) 23750

6 S.Balasubramanyam Jr.Officer-HR 7753

58

CO-GENERATION EXECUTIVES

1 Y.V.Subba Rao Deputy Eneral Manager 54150

2 P.Nagaraju Deputy Manger(Electical) 33250

3 K.Murali Chemist 13350

4 V.Suryanarayana Deputy Manager (Mech) 30400

5 Syed Abdul Nabi Assistant Manger (Q.C) 20900

6 M.V.V.S Srivas Sr. Engineer (Electical) 19000

59

EXECUTIVES PAY SCALE

Wage & Salary Structure for Different Categories in NCS Sugars Limited

Managerial staff supervising candidates Consolidate

Workers & electrical staff Wage agreement

Trainees Consolidate

Apprentices Government

PRW for below 175 bags Each bag 70 paisa

Next 25 bags Each bag 90 paisa

Next each bag Each bag 1.05 paisa

PRW-Piece Rate Workers:

60

In seasonal 25% retaining allowance will be given for piece rate workers. The above

table shows the information about how NCS Sugars Limited pays the wage and salary

for workers and managerial staff, supervising candidates and trainees and apprentices

and piece rate workers.

LIST OF EMPLOYEES ELIGIBLE FOR P.F CUTTING

Sugar executive employees 30

Co-gen executive employees 1

Sugar permanent employees 64

Co-gen permanent employees 3

Sugar seasonal employees 177

Co-gen seasonal employees 28

Sugar probation employees 13

Co-gen probation employees 9

Head office employees 22

Arrears of all category employees 14

61

Total 361

SALARIES STRUCTURE UNDER WAGE BOARD SCALES

(Confirmed permanent and seasonal employees)

Basic : ***

Dearness allowance : ***

Fixed allowance : ***

Family planning : ***

Medical allowance : ***

Washing allowance : ***

House rent allowance : ***

62

PF wages (for the purpose of provident fund and gratuity

Allowances

Conveyance allowance : ***

Different allowances are listed shown in the given below table

GRADES D.A M.A W.A H.R.A C.A (field Staff)

Un skilled-II 1757.65 265.00 110.00240.00 200.00

Un skilled-I 1757.65 265.00 110.00 250.00200.00

Semi-skilled 1757.65 265.00 110.00 300.00200.00

Skilled & 1757.65 265.00 110.00 340.00200.00

clerical

Grade-IV

Skilled & 1757.65 265.00 110.00 340.00200.00

clerical

Grade-III

Highly 1757.65 265.00 110.00340.00 200.00

Skilled &

Clerical

Grade-II

Supervisory 1757.65 265.00 110.00 340.00200.00

63

& Clerical

grade-I

The above table shows the information about the different types of allowances that are

paid to the Non-executives in the company.

D.A – Dearness Allowance

M.A – Medical Allowance

W.A – Washing Allowance

C.A – Conveyance Allowance

The company gives dearness allowance to the employees based on the all India

average consumer price index points @ Rs. 2.15 per point.

WAGE DEDUCTIONS:

The company deducts the wages of the employees in such cases provident

fund, voluntary provident fund, professional tax, life insurance policies taken by the

employee, if the employee took loans from the bank, if the company gives imprest

allowances and festival allowance, house maintenance, canteen token given by the

company, group saving link insurance, cable connection recovery.

Provident fund:

The EPF is a scheme intended to help employees from both private non-pensionable

public sectors save a fraction of their salary every month in a saving scheme, to be

used in an event that the employee is temporarily or no longer fit to work or at

retirement.

For P.F

Employee Contribution is 12%

64

Employer Contribution is 3.67%

Employer Contribution for E.P.F 8.33%

Voluntary provident fund 8%

Professional tax:

Professional tax is the amount levied on the income of the profession of the employee.

This amount is deducted based on the wage or salary earning of the employee.

Insurance policy:

If the employee take insurance policy from the insurance company he may liable to

pay the insurance term wise that’s why the company deduct his insurance premium

amount and paid directly to the insurance.

Bank Loans:

NCS provides bank loans for the employees based on their income capability through

banks. If any employees took bank loan, company deduct the amount which is liable

to pay to recover the bank loan and paid directly to the bank.

Canteen:

Company gives canteen tokens for subside to the employees. The amount for the

tokens collects from the salary of the employee.

SUMMARY OF SALARY BILL

Earnings:

65

Basic : ***

Fixed allowance : ***

F.P increment : ***

Special pay : ***

V.D.A : ***

House Rent Allowance : ***

Medical Allowance : ***

Washing Allowance : ***

Conveyance Allowance : ***

Other Allowance : ***

Gross : ***

Recoveries

Provident Fund : ***

V.P.F : ***

Profession Tax : ***

Court Attachments : ***

Life Insurance Policy : ***

Income Tax : ***

Festival Advance : ***

Education Advance : ***

Canteen Collection : ***

66

Cable T.V collection : ***

House Rent Recovery : ***

Electrical excess consumption : ***

R.D bank : ***

G.S.L.I : ***

L.W.F : ***

Club : ***

Others : ***

Imprest Advance : ***

Salary Advance : ***

APCO Collection : ***

School : ***

M.Club : ***

Dormitory : ***

Medicines : ***

Telephones : ***

Donations : ***

Net total : ***

SALARY BILL IN NCS SUGARS LIMITED

Earning:

Basic : ***

Fixed Allowance : ***

67

F.P Inc : ***

Special pay : ***

Dearness Allowance : ***

House Rent Allowance : ***

Medical : ***

Washing Allowance : ***

Conveyance Allowance : ***

Others : ***

Gross:

Deductions:

P.V : ***

V.P.F : ***

P.Tax : ***

L.I.C : ***

Court : ***

Bank loan : ***

Imprest : ***

Fest : ***

Electricity : ***

H.M.R : ***

G.S.L.I : ***

Canteen : ***

Cable : ***

Po.rd : ***

Others : ***

Total deductions : ***

68

Net salary : ***

REMUNERATION FOR THE EMPLOYEES IN NCS SUGARS LIMITED

In the NCS sugars limited there are four types of employees. In those the

remuneration is different for the seasonal employees compared to the permanent.

Type are:

Confirmed permanent employees

Seasonal employees

Probation employees

Trainees

Confirmed permanent employees:

69

For these employees company give salaries for their work according to the wage

agreement between the workers and management of the company.

Seasonal employees:

For this type of employees company give salaries in the season. And in the off season

they provide retained allowance. The retained allowance is provided for the retaining

of employees in the company during the off season. This retention allowance was

given based on the grades. It’s listed below.

Unskilled-I

25% in their salary in the season

Unskilled-II

Semi skilled 35% of their salary in the season

Skilled & clerical grade-IV

Skilled & clerical grade-III

Highly skilled & clerical grade-II 50% of their salary in the season

Supervisory & clerical grade-I

70

Probation employee:

For these employees company give salaries for their work according to the wage

agreement between the workers and management of the company.

Trainees:

Company paid remuneration for the trainees for their work according to the government rules and provisions

BONUS GIVEN TO THE EMPLOYEES IN NCS SUGARS LIMITED

NCS Sugar’s limited prepare bonus bill for the following categories separately for the

financial year of every year (Sugar & Cogeneration plant)

1.Executive bill

2.Permanent bill

3.Seasonal employee’s bill

Company consider salary during season

Company consider retained allowance during season

Company consider the occupational wages during season

4. probation employee bill

71

5. I.T.I apprentice bill

6.V.R.S employee bill

7.DIP trainers bill

8.trainees bill

NCS sugars have to calculate month wise the categories of the employees for bonus

for 12 months (i.e from period 01.04.year to 31.03.year)

For calculation:

Total earned P.F wages x 8.33 %

= one month bonus

100

For example:

Rs 3500 X 8.33 % = Rs 291.55

100

(i.e bonus for 12 months = Rs 291.55 x 12 = Rs 3498.60)

In the view of the above company take total earned PF wages and calculate month

wise for 12 months. Bonus payable @ 8.33% maximum ceiling up to Rs 3500/-Per

72

annum those who have earned P.F wages subject to Maximum ceiling up to Rs

10,000/- per month salary based.

EX GRATIA FOR EMPLOYEES IN NCS SUGARS LIMITED

NCS sugar’s limited prepare ex-gratia bill for the following categories separately for

the financial year of every year (sugar & congeneration plant)

1.Executive bill

2.Permanent bill

3.Seasonal employee’s bill

Company consider salary during season

Company consider retained allowance during season

Company consider the occupational wages during season

4. probation employee bill

5. I.T.I apprentice bill

73

6.V.R.S employee bill

7.DIP trainers bill

8.trainees bill

NCS sugars have to calculate month wise the categories of the employees for bonus

for 12 months (i.e from period 01.04.year to 31.03.year)

For calculation:

Total earned gross wages x 30

= one month ex-gratia

365 days

For example:

Rs 10000/-

X 30 = Rs 821,91/-

365

(i.e ex gratia for 12 months = Rs 821.91 x 12 = Rs 9862/- ex gratia per year)

74

Manual option the above is subject to maximum for 15 days / 30days / 45 days / 60

days for ex gratia calculation

If company has paid any means the amount should be clubbed in concern month

earning and the same should be clubbed in grand total.

PENSION AND GRATUITY

Under the provident fund act 1925 the company follows the pension scheme 1995.

According to this the employer contribution for the pension is 8.33% and the

employee’s contribution is 12%. Pension is deducting and calculating up to 58 years

of the employee’s age.

In the NCS sugars limited the employees working period is 60 years but the amount

deducts up to 58 years only. The remaining two years there is no deduction from

wages and pension is payable to that employee from 58 years age of the employee.

Employer’s contribution for pension =12%

Employee’s contribution for pension =8.33%

75

Calculation of pension amount:

Pensionable salary x pensionable service

Pension =

70

For example:

Pension = 6500/- x 35 = 50% = 3250/-

7

Calculation of gratuity:

Gratuity = P.F wages x no.of years serice x 7 or 15

26

CHAPTER-IV

DATA ANALYSIS AND

INTERPRETATION

&

WAGE AND SALARY

ADMINISTRATION

76

1. EMPLOYEE’S RESPONSE ON RECEIVING THEIR SALARY

S.No Item of scale No.of Respondents Percentage

1 More Satisfied 46 42

2 Satisfied 61 56

3 Unsatisfied 3 2

Total 110 100

77

Employeees Response on Receiving thier Salary

42%

56%

2%

More Satisfied

Satisfied

Unsatisfied

Interpretation

The above table reveals the employees perceptions about their salary. 61 respondents

representing 56% of the sample were satisfied with the salary that they are receiving.

While, 46 respondents constituting 42% opined that they are more satisfied with their

salary and remaining (2%) were unsatisfied.

2. EMPLOYEE’S RESPONSE ABOUT OVERTIME SALARY


1 Excellent 35 32

2 Good 46 42

3 Average 18 16

4 Poor 11 10

Total 110 100

78

Employees Response about Overtime Salary

32%

42%

16%

10%

Excellent

Good

Average

Poor

Interpretation

The table indicates the employee’s response about overtime salary. Majority (74%) of

the employees stated that the overtime salary was good. While, 16% of employees

said that it is average, 10% however opined that it is poor.

3. EMPLOYEE’S OPINION ON TAKING ANNUAL BONUS



2 Satisfied 62 56

3 Unsatisfied 8 7

Total 110 100

79

Employees opinion on taking their Annual Bonus

37%

56%

7%

More Satisfied

Satisfied

Unsatisfied

Interpretation

The table shows the employees perception on Annual Bonus. 62 respondents

representing 56% of the sample said that they are satisfied with the annual bonus. 40

respondents constituting 37% of employees stated that they are more satisfied.

Whereas, 7% of employees stated that they are more satisfied. Whereas, 7% of

employees were unsatisfied.

4. EMPLOYEE’S OPINION ON SALARY / WAGE INCREMETNS



2 Satisfied 38 35

3 Unsatisfied 21 19

Total 110 100

80

Employees opinion on Salary / wage increments

46%

35%

19%

More Satisfied

Satisfied

Unsatisfied

Interpretation

The table shows the opinions of the respondents about the payments of increments.

Majority (81%) of the employees opined that the increments give are good. However,

19% of employees took a neutral stand.

5. EMPLOYEE’S OPINION ON HOUSE RENT ALLOWANCE (HRA)


1 Excellent 27 25

2 Good 59 54

3 Average 17 15

4 Poor 7 6

Total 110 100

81

Employees opinion on House Rent Allowances (HRA)

25%

54%

15%

6%

Excellent

Good

Average

Poor

Interpretation

Table exhibits the employee’s opinion on house rent allowances. It is observed that

majority (79%) of respondents said that the HRA is Good. 15% of respondents stated

that it is average. Whereas, 6% opines that they are poor.

6. EMPLOYEE’S OPINION ON V.R.S


1 Excellent 12 11

2 Good 21 19

3 Average 61 55

4 Poor 17 15

Total 110 100

82

Employees opinion on V.R.S

11%

19%

55%

15%

Excellent

Good

Average

Poor

Interpretation

The table shows that, 61 respondent representing 55% of the sample stated that the

V.R.S of the company is average. 19% of employees said that the V.R.S is Good.

Whereas, 15% opined that the V.R.S is poor.

7. EMPLOYEE’S OPINION ABOUT PROVIDENT FUND


1 Excellent 59 54

2 Good 25 23

3 Average 18 16

4 Poor 8 7

Total 110 100

83

Employees opinion about Provident Fund

54%

23%

16%

7%

Excellent

Good

Average

Poor

Interpretation

From the table it is observed that, majority (77%) of the employees stated that the

provident fund provided by the company is good. 16% of employees said that it is

average. Whereas, 7% of employees opined that it is poor.

8. EMPLOYEE’S OPINION ON RELATIONSHIP WITH MANAGEMENT


1 Excellent 15 14

2 Good 49 45

3 Average 38 34

4 Poor 8 7

Total 110 100

84

Employees opinion on Relationship With Management

14%

45%

34%

7%

Excellent

Good

Average

Poor

Interpretation

The table shows that 45% of employees said that the relations are good whereas, 14%

of employees stated that the relations are excellent. 34% of employees opined that

they are average. However, 7% of employees said that the relations with management

are poor.

9. EMPLOYEE’S KNOWLEDGE ON WAGE AGREEMENT


1 Yes 83 76

2 No 7 6

3 Not completely 20 18

Total 110 100

85

Employees Knowledge On Wage Agreement

76%

6%

18%

Yes

No

Not completely

Interpretation

From the above table it is observed that 60% of the respondents said that they know

about the wage agreement and its provisions.. 6% of the respondents said that they

don’t know the agreement details. 1% of employees remained are know but not

completely.

10. EMPLOYEE’S SATISFACTION ABOUT THEIR SALARIES



2 Satisfied 62 57

3 Unsatisfied 15 13

Total 110 100

86

Employees Satisfaction About Their Salaries

30%

57%

13%

More Satisfied

Satisfied

Unsatisfied

Interpretation

The table shows that majority 57% of the employees have the satisfaction regarding

the salaries that are given by the company. However, 30% of the respondents were

more satisfied with the salaries. The remaining respondents are unsatisfied with the

salaries of the company.

11. EMPLOYEE’S KNOWLEDGE ABOUT THEIR SALARY STRUCTURE


1 Knowledge 64 58

2 No Knowledge 12 10

3 Partial Knowledge 34 32

Total 110 100

87

Employees Knowledge About Their Salary Structure

58%

10%

32%

Knowledge

No Knowledge

Partial Knowledge

Interpretation

The table shows that majority 58% of the employees have the knowledge regarding

the salary structure in their organization. However, 10% of the respondents don’t have

knowledge about their salary structure. The remaining respondents have partial

knowledge about their salary structure.

12. EMPLOYEE’S RESPONSE ON MEDICAL ALLOWANCE



2 Satisfied 73 66

3 Unsatisfied 12 11

Total 110 100

88

Employees Response On Medical Allowance

23%

66%

11%

More Satisfied

Satisfied

Unsatisfied

Interpretation

Incentive is a payment of further remuneration to the workmen depending not upon

profit but no extra production.

The table shows that majority (23%) of the employees has the more satisfaction and

66% have the satisfaction regarding the medical allowance that is provided by the

company. However, 11% of the respondents were unsatisfied with the medical

allowance.

13. EMPLOYEE’S OPINION ABOUT FRINGE BENEFITS


1 Good 85 77

2 Bad 25 23

3 No comment 0 0

89

Total 110 100

Employees Opinion About Fringe Benefits

77%

23%

0%

Good

Bad

No comment

Interpretation

From the table it is observed that, 85 respondents representing 77% of the sample said

that the Fringe Benefits are good and 25 respondents constituting 23% stated that the

Fringe benefits are Bad.

14. EMPLOYEE’S WILLINGNESS TO GIVE SUGGESTIONS REGARDING TO SALARIES


1 Yes 78 70

2 No 32 30

90

3 No Comment 0 0

Total 110 100

Employees Willingness To Give Suggestions Regarding To Salaries

70%

30%

0%

Yes

No

No Comment

Interpretation

Above table shows that 70% of the respondents had will to give suggestions regarding

to salaries if management offer a chance remaining are don’t have will.

91

CHAPTER-V

SUMMARY

The Human Resource Department of an organization is very much significant in

establishing itself as a brand. The past one year has seen an increasing number of

companies focus on creating a unique HR brand for their organization. The scope of

Human Resource management is very large and expanded the scope of HR function

into the areas as personnel aspect, welfare aspect and individual relations aspect.

92

Human Resource management is now regarded as a “must” for the successful running

of a business or industrial enterprise. HRM helps management at enterprise level,

industrial level and at societal level.

The basic purpose of wage and salary administration is to establish and maintain an

equitable wage and salary structure and maintenance of an equitable labor cost

structure. So that satisfaction of employees and employers is maximized and conflicts

minimized.

The wage and salary administration concerned with the financial aspects of needs.

The needs of the employees so that reward can be individually designed to satisfy

some need. Before they do any thing, they look for a reward or pay-off. The reward

may be money or promotion, but more likely it will be some pay off a smile

acceptance by a peer, receipt of information, as kind word of recognition etc.

According to “Beach”, wage and salary programs have four major purposes.

To recruit persons for a firm

To control pay roll costs

To satisfy people, to reduce the incidence of quitting, grievances and functions

over pay

To motive people to perform better

The study has been taken up with the following objectives. To know about the wages

and salary administration of the NCS Sugars limited, latchayya peta. To know about

the different types of allowances in the NCS sugar’s limited, latchayya peta. To study

about the employees pay structure in the company. To assess the employees

perception about the wage and salary structure of the company. To identify the

93

problems, if any, in the wage and salary administration of the company and to make

suggestions.

The data for the study have been collected from primary and secondary sources. As

part of primary data, a survey has been conducted on the employees of NCS sugar’s

limited, latchayya peta. A sample of 110 respondents has been selected on the basis of

convenience and a structured questionnaire has been administered to them. The

responses have tabulated and analyzed with the help of percentages. The secondary

data are collected from text books, magazines, company records and websites.

Sugar industry is very important to the Indian National Economy, because of its

multiple contributions in the shape of employment and provision of raw materials to

other industries.

Sugar is made by some plants to store energy that they don’t need straight away,

rather like animals make fat. People like sugar for its sweetness and its energy so

some of these plants are grown commercially to extract the sugar.

FINDINGS

The following are the findings:

The additional cane price given by the NCS sugars limited is good and attracts

the farmers

94

NCS sugars limited, latchayya peta, is paid wage and salary according to the

wage board

NCS sugars limited, latchayya peta management must ensure the employees

know and understand about the wage agreement

Half of the respondents are satisfied with the receiving the bouns

It is observed that majority of the employees 98% are very much satisfied with

the salary that they are receiving

Majority of the employees opinioned that their job was good, 17% however

said that it is average

It is found that, majority of the employees are feeling good about the overtime

salary. While, 16% of employees felt that it is average, 10% however felt that

it is poor.

Majority of the employees 79% are feeling good about the house rent

allowances that are provided by the company

Majority of the employees 81% have the more satisfaction regarding the salary

increments rest of the respondents not satisfied

It is observed that majority 81% of the employees opined that the increments

given are good

SUGGESTIONS

NCS sugars limited management must to say to worked how much percentage

to cut their salary under the PF. The management must to essentiate the PF

with wages or salaries.

95

NCS sugars limited management asks the opinion of the employees, before the

implement the wage agreement

NCS sugars limited management should wage settlement with in five days

after the month

NCS sugars limited management should be increase the payment for VRS of

the workers

The company follows consolidating wage for the newly recruiting employees.

But the salary under the wage board gives job security to the employees.

CONCLUSION

The employees of the NCS sugars Limited area more satisfied with their wages and

salaries. The wage and salary structure and employee benefits and service is one of

the vital area of personal administration for sound wage and salary policies and

96

programs are essential to maintain, develop, promote and transfer employees and to

get effective result from them. Wage and salary structure are perhaps the most

important single element in the condition of employees. Organizational morale cannot

be maintained at high level without a fair equitable and sound remuneration program.

The wages and salary administration in NCS sugars limited is a big task and it is

being managed by inviting lot of human resources. The little attention has been

devoted to study the internal structure and Human Resource Management policies.

Therefore it is felt that the study relating to wage and salary administration in NCS

sugars limited help and understand and analyze the practices. Thus, policies and

practices of wage and salary administration should be structured effectively and

efficiently.

CHAPTER –VI

97

Bibliography

Books

P.Subba Rao Essentials of Human Resource Management

98

And Industrial Relations

Himalaya Publications

New Delhi

3rd and Revised Addition

Micheal Armstrong Employee Reward

Universities Press (India) Ltd.

Websites:

www.indiansugars.com

99

http://www.indiansugars.com/

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