1. Wage Payment
System

2. Index
Sr. no content
1 What is wage payment system
2 Importance & characteristics
3 Method and its application
4 comparison
5 conclusion

3. What is wage payment system
O It is the way of giving financial
compensation to the workers for the time
and effort invested by them in converting
materials into finished products.
O This method adopted by manufacturing
industry to remunerate workers.

4. Importance
O Facilitates the preparation of wage plan for
future.
O Determine the cost of production and the
profitability.
O Determines the earning their living standards.
O Affects the interest and attitude of the workers
and the rate of labor turnover.
O Helps in recruiting skilled, experienced and
trained workers.
O Helps to increase the productivity and goodwill.

5. Characteristics
O Fair and justifiable to both.
O Help in maximizing workers' satisfaction and
minimizing labor turnover.
O Assure minimum guaranteed wages to all workers.
O Provide more wages to efficient and skilled
workers.
O Follow government policy and trade union's norms.
O Simple and understandable to all the workers.
O Help in improving performance and productivity of
the workers.
O Flexible enough to suit the needs of the
organization.

6. Systems
Time Rate System
Piece Rate System

7. Time Rate System
O Laborers get wage on the
basis of time which is
utilized in organization. This
wages may be charged on
per hour, per day, per
month or per year basis.
O It is also called as day
wages system or time wok
system.

8. Benefits
O Workers can easily compute their own
remuneration.
O Earnings are regular and fixed and do not
suffer from temporary loss of efficiency.
O No pressure, the quality of work can be kept
high.
O Learners can concentrate on learning the best
methods of work.

9. Disadvantage
O No incentive for better performance as
reward is not proportionate to effort.
O Guaranteed remuneration makes workers
indifferent and complacent.
O Calculation of labor cost per unit is difficult
O Control over labor cost becomes difficult
and more payment may be made for the
lesser amount of work.

10. Suitability
O Units of output are non-measurable an
(office work and mental work)
O Quality of work is important, (artistic
furniture, fine jewelry, etc.)
O Workers are new and learning the job
O Collective efforts of a group of persons
are essential for completing the job.

11. Piece Rate System
O Laborers can get the wages
on the basis of their work
done. No time element will
be used for calculation of
wages.
O Under this, method, laborer
tries to best for producing
the products fastly for
getting more wages. This
method is also called
payment by result.

12. Benefits
O Direct relation between effort and reward
O Ambitious and efficient workers are provided
ample opportunity to utilize their talent and
increase their earnings
O Management can distinguish between efficient
and inefficient workers.
O Increase in productivity results in higher
output and lower costs of production per unit.
O workers themselves have a stake in
maximization of efficiency, cost of supervision
is low.

13. Disadvantages
O Difficult to fix piece wage rates.
O Earnings of workers are not stable and they
may suffer temporary delays or difficulties.
O This system may create jealousy between
efficient and inefficient workers.
O Clerical work is increased.
O The method is not practicable when
contribution of individual workers cannot be
calculated, i.e., construction work.

14. Suitability
O Work can be measured
accurately, e.g., production of standardized
goods in the factory.
O When the quantity of output depends directly
upon the skill and efforts of the worker.
O Repetitive jobs.
O Quality and workmanship are not very
important.

15. Difference………

16. Balance or Debt Method
This method is a
combination of time and
piece wage systems. The
worker is guaranteed a
time rate with an
alternative piece rate.

17. Cont.……..

18. Thank
You