The Senate, nursing self-inflicted wounds over its compensation, was urged yesterday to consider a complete overhaul of its work and pay schedules, including a salary cut, the elimination of restrictions on outside income and the limitation of congressional sessions to six months.

The proposal by Majority Leader Howard H. Baker Jr. (R-Tenn.) also calls for full disclosure of outside income, including investment earnings that are now sketchily reported and a constitutional amendment to empower the Supreme Court to set congressional pay.

Last week the Senate approved an $18,200 limit on earnings from speech making. That action was prompted in large part by embarrassment over the sizable speaking fees that many senators have collected.

But, in what many members now regard as an excess of zeal, the Senate shied away from raising its pay, which leaves senators' annual pay about $9,000 below the salary of House members.

The problem is that House members got their pay raise last year in a trade-off with the Senate that gave senators unlimited outside income, and senators are still reluctant to go on record in support of a pay raise.

An aide conceded that Baker's proposal probably won't pass but said that Baker, who has long been an advocate of restricting the length of congressional sessions, wants to start discussing major changes in the way the Senate operates.

Under Baker's proposal, legislative sessions, which often last all year, would end by July 31. Accordingly, annual pay for senators would be cut from $60,662.50 to $36,000. While there would be no limits on outside income, all earnings from non-senatorial duties would have to be reported in detail so constituents could weigh the propriety of any compensation from special interests.