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Industry Pay Packages A Case Study of Law of Demand
INDUSTRY PAY PACKAGES : A
CASE STUDY OF LAW OF
Dharti Shah (46)
Dhrumil Shah (47)
Kavisha Shah (48)
Param Shah (49)
Shairavi Shah (50)
Demand and Law of Demand
How Demand Affects Pay Packages
Average Pay packages in the market
Case Study on Sonaoverseas Corporation
Perks and Perquisites
Change in Salary of the Employees
Why there is a change in the salaries?
DEMAND & LAW OF DEMAND
Demand means desire backed by willingness and
ability to pay a price for a specific good or service.
A microeconomic law that states that, all other
factors being equal, as the price of a good or
service increases, consumer demand for the good
or service will decrease and vice versa.
ASSUMPTIONS OF DEMAND
While expressing the law of demand, the
assumption is that other factors of demand, except
the price of a good, are unchanged. If they don't
remain constant, the inverse relation may not hold
well. This law operates when the price of the good
changes and all other non-price factors do not
The main assumptions are:
1.Number of consumers
2.Taste and preferences
3.Income of consumer
4.Future expectation of price
5.Price of related goods
HOW DEMAND AFFECTS PAY PACKAGES
If there is a higher supply and lower demand then
the salaries will be lower. If there is a higher
demand than supply then the salaries will go up.
Salaries are based around the needs of the
product, the more people want it the higher the
salaries will be.
CASE STUDY ON SONAOVERSEAS
Sonaoverseas corporation is a partnership firm
trading in food products and processed food. It was
established in 1977.
Company aims at providing food products under 6
different brands. The company is manufacturing all
its products in 5 different manufacturing units which
are ISO and HASSAP certified.
All the recipes are proprietary of the company.
Exports in branded packing to various countries like
Canada, USA, UK, Australia.
The company deals in various products as below:
1. Pickle paste and chutneys
2. Spices- whole, grounded and compounded
3. Snacks and savories
4. Biscuits and baked products
5. Fruit juices and mango pulp
Sona Overseas Corporation is a trading company
and has 8 workers and 2 consultants.
Workers comprise of peons, receptionists, skilled
labour, publicists, assistant manager, exports
manager and food specialist.
In these companies, as food is a seasonal process,
contract workers are in demand. For example: in
mango season, April-may more than 100 contract
workers are required.
The company hires custom and excise consultants.
It also takes the service of logistics and forwarders.
AVERAGE PAY PACKAGES IN THE FOOD
Top Level Management - Rs 40000 – 50000 p.m
Middle Level Management – Rs. 20000 – 30000 p.m
Bottom Level Management – Rs. 3000 - 15000 p.m
Salaries drawn by the managerial skills range
between Rs.35000 – 50000 (approx.)
Salaries drawn by the administrative and office staff
range between Rs. 8000 – 15000 (approx.)
Consultants are given remuneration on container
There is a increase in the salary depending on the
PERKS AND PERQUISITES
Allowances are given to the employees on their
Allowances like medical allowance , conveyance
allowance and children education allowance.
The top level management has the benefit of ECGC
The employees are given the benefits of LIC
CHANGE IN SALARIES OF THE EMPLOYEES
Level of Employee 2009 (in rs.) 2013 (in rs.)
Assistant Manager 19500 33000
Officer Supervisor 7300 15000
Food Specialist 15500 27800
Skilled Labour 3100 11300
Unskilled Labour 1500 8000
WHY CHANGE IN SALARIES?
The prices of raw materials and procurement of raw
materials, packing material and cost of forwarding
went high. The pay and other charges also shooted
up but the company has survived just due to 2
1. Rise in selling prices
2. Rise in value of US Dollar
The company deals in US Dollars only and books
the rates. Hence the company has managed to
survive so far.