This document discusses different types of wage systems and incentive plans used to compensate employees. It describes time wages where employees are paid based on time spent working regardless of output. Piece wages tie pay to output, paying employees per piece completed. Other systems discussed include combined time-piece wages and incentive plans that reward higher performance. The document also covers fringe benefits which provide supplementary compensation like paid leave, healthcare, and welfare programs.

1. Presented By: padmini y.s

2. • It is a particular amount of money that is
paid, usually every week, to an employee,
especially one who does work that needs
physical skill or strength, rather than a job
needing a college education.
• A fixed regular payment earned for work or
services, typically paid on a daily or weekly
basis.

3. Wage structure is generally the
levels or hierarchy of job and pay ranges..It
may mean the way the total wage of a worker
or group of workers is composed; for
example including such elements as a basic
rate, a piecework bonus and other forms of
bonus, overtime etc.

4. 1) Time Wage System
Wages are paid on the basis of
time spent on the job irrespective of the
amount of work done.
Advantages of Time Wage System
i. It is the simplest and the oldest method. It
is easy to understand and workers can
easily compute their own remuneration.
ii. Earnings of workers are regular and fixed
and they do not suffer from temporary loss
of efficiency.

5. iii. The plan is economical
iv. The quality of the work can be kept high
v. This avoids the wasteful handling of materials
and tools
vi. Learners can concentrate on learning the best
methods of work as their earnings are not
dependent on the amount of work.
vii. It helps to create a sense of equality and
solidarity among the workers.
viii. It is an objective method
ix. The employer can calculate the wage bill in
advance

6. i. The method provides no incentive for better
performance as reward is not proportionate to
effort. It makes no distinction between efficient
and inefficient workers.
ii. Guaranteed remuneration makes workers
indifferent and complacent.
iii. Calculation of labour cost per unit is difficult
iv. Costs of supervision are high
v. Control over labour cost becomes difficult and
more payment may be made for the lesser
amount of work
vi. Leads to deterioration in the morale of efficient
and young employees

7.  Where units of output are non-measurable
 When employees have little control over the
quantity of output or there is no clear-cut relation
between effort and output.
 When the output is uncertain and irregular
 When quality of work is especially output
 Where the machinery and materials used are very
sophisticated and expensive.
 Work is of highly varied nature and standards of
performance cannot be established
 Employees and trade unions strongly oppose
incentive payments
 When workers are new and learning the job
 When collective efforts of a group of persons are
essential for completing the job.

8. Remuneration is based on the amount of
work done or output of a worker. One unit of
output is considered as one piece and a specific
rate of wage is paid per piece. Greater is the
number of pieces produced by a worker, higher is
his remuneration. Thus, a workman is paid in direct
proportion to his output. It is called payment by
results.
Advantages of Piece Wage System
i. There is direct relation between effort and reward
ii. Ambitious and efficient workers are provided
ample opportunity to utilize their talent and
increase their earnings and thereby improve their
standard of living and morale.

9. iii. The method is fair to all
iv. Distinguish between efficient and
inefficient workers
v. Increase in productivity results in higher
output and lower costs of production per
unit.
vi. Cost of supervision is low
vii. Workers are more likely to cooperate with
the schemes of rationalization designed to
improve the efficiency of operations.

10. i. It is very difficult to fix piece wage rates
ii. Employees feel insecure and dissatisfied
iii. It increases the wastage of materials and
wear and tear of machinery
iv. Employees may not stress quality so that
rigid quality control becomes necessary
v. This system may create jealousy between
efficient inefficient workers
vi. Detailed records of production have to be
kept so that the clerical work is increased
vii. This method may lead to industrial disputes

11.  When work done by an individual worker can be
measured accurately, e.g., production of
standardized goods in the factory.
 When the quantity of output depends directly
upon the skill and efforts of the worker.
 Where the flow of work is regular and
interruptions are minimum i.e., repetitive jobs.
 Where quality and workmanship are not very
important.
 In large scale production of goods and services.
 When methods of production are standardised
and the job is of a repetitive nature.

12. This method is a combination
of time and piece wage system. The worker
is guaranteed a time rate with an alternative
piece rate. If the wages calculated at piece
rate exceed the time rate, the worker gets
credit. On the other hand, if time wages
exceed piece wages, the worker is paid time
wage and the deficit is carried forward as
debt to be reconserved in future.

13. Incentives are variable rewards
granted to employees as per the variations in
their performance. Incentives are provided
besides wages and salaries so that the level
of motivation and job satisfaction can be
enhanced.

14. 1) Small Group Incentives
These are mostly built around financial
goals, such as a budgeted project, productivity,
quality, on time delivery and customer
satisfaction. As the term suggests, it is
specifically meant for small groups, i.e., project
based teams.
2) Individual Incentives
During the early years, individual
incentives were reserved for the sales teams,
hourly workers and senior executives. They were
target and performance driven.

15. 3) Long term Incentives
Long term refer to payout cycles that
are more than a year. These could also refer
to employee stocks or any kind of incentives
that may range from three to five years.
4) Team based Incentives
The team gets the necessary reward
based on the role they played in the
particular project. Reward for the team
based performance should be assesses
formally or informally by the team members
based on their job performance.

16.  Incentive plans motivate workers for higher
efficiency and productivity
 It can improve the work flow and work methods
 Incentive plans make employees hardworking
and innovative.
 When employees are dedicated, supervision costs
can be reduced
 It establish positive response in an organization
 It helps workers improve their standard of living.
 The other benefits offered by incentive plans are
reduced turnover, reduced absenteeism, and
reduced lost time.

17.  It lead to disputes among workers
 Hunger for money among the workers forces
them to overwork, which may affect their
health.
 Some workers may involve in malpractices in
order to earn more money.
 They may sacrifice quality
 It also leads to corruption by falsifying the
production record.

18. Fringe benefits refers to the extra
benefits provides to the employees in
addition of normal compensation paid in
terms of wages or salary.
Features of Fringe Benefits
 They are supplementary forms of
compensation.
 They are paid to all employees based on their
membership in the organization.
 These are the indirect compensation.
 These benefits may be statutory or voluntary.
 These benefits help raise the living standards
of the employees.

19. 1) Payment for Time not worked
 Hours of work
 Paid Holidays
 Shift Premium
 Holiday Pay
 Paid Vacation
2) Employee Security
 Retrenchment Compensation
 Lay Off Compensation
3) Safety and Healthy
4) Workmen’s Compensation

20. 5) Health Benefits
 Sickness benefits
 Medical benefit
 Temporary disablement benefits
 Permanent disablement benefit
 Maternity benefits
6) Voluntary Arrangement
7) Welfare and Recreational facilities