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
Accounting Department
Manager
Finance & Accounts
Asst Manager Finance & Accountants
Asst Accountant Officer
Clerks
Accounting Department
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/-
once the scale cross the 7725/- the increment will grow up to 90/- the scale ends at
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/-
once the scale cross the 7950/- the increment will grow up to 95/- the scale ends at
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
once the scale cross the 2990/- the increment will grow up to 100/- the scale ends at
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/-
once the scale cross the 8525/- the increment will grow up to 100/- the scale ends at
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
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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
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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
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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)
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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%
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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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
1 More Satisfied 40 37
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
S.No Item of scale No.of Respondents Percentage
1 More Satisfied 51 46
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)
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
1 More Satisfied 33 30
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
1 More Satisfied 25 23
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
S.No Item of scale No.of Respondents Percentage
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
S.No Item of scale No.of Respondents Percentage
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.
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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