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Requisite of a good wage payment plan

Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 Uma asked about 3 years ago

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 CA Sandeep Bohra answered almost 3 years ago

**The wage payment plan contains four classifications of wage rates:** **a. Starting Rate —** wage rate used for period of orientation and observation. This rate is paid to a newly hired employee who has no experience in the work of the classification into which he/she is hired. **b. Training Wage Rates —** A range of starting rates for partially qualified employees (those who have some experience in the work of the classification into which they are hired and a scale of interim wage rates to be used for inexperienced employees as they progress in their training toward the fully qualified level of job performance. **c. Basic Wage Rates —** wage rates which are comparable to those paid in the area and industry or field for similar work for employees who have been recognized by management to be fully capable of performing all the requirements of the job. **d. Merit Wage Rates —** wage rates for fully qualified employees with substantial service for above normal effort. Following principle should be adhered to make the wage incentive plan successful: (1) Suitable Climate—Success of an incentive plan greatly depends on the kind of relation between management and workers. If the relations are good, any incentive plan may work successfully. If there is mutual ill-will workers may oppose it considering it as an attempt by the management to force them to work hard. It is necessary that before introducing any incentive scheme, workers and management should discuss the scheme. (2) Information as to goals—The workers should be told about the objectives and goals of the incentive plan in clear terms. The objective may be to increase the quality or quantity of the production. (3) Simplicity—The incentive scheme should be easy to understand and simple to operate. (4) Just and Equitable—It should take into account the skills and abilities of workers. If it is unduly biased in favour of efficient and experienced workers, it will lack motivation for those who arc not so. If it seeks to favour inexperienced and inefficient workers, outstanding and ambitious workers will not have any use for it. (5) Flexible—An incentive scheme should be flexible enough lobe adapted to the needs of any change in the situation. (6) Attractive—Incentive payments, should be large enough to attract the employees. If a worker already earning Rs. 500 a month is to get an extra benefit of Rs. 25, he may not consider it worthwhile to strain himself for such a petty gain. (7) Economical—The cost of operating an incentive scheme should be compared with the benefits accruing from it. The gains and benefits should exceed the cost of its implementation. (8) Minimum guaranteed wages—The employee should be assured of a minimum base wage as determined by job evaluation method, irrespective of his output. This gives the worker a feeling of security about his means. The base rate may be reduced due to circumstances beyond his control. (9) Grievance procedure—An incentive wage plan gives rise to grievances of all sorts. Therefore, the management should have an effective grievance procedure to deal with complaint and dissatisfaction ventilated by employees. (10) Stability-The standards and rates once fixed under an incentive plan should not be frequently changed unless there is a substantial change in methods, materials or equipment used in production process. Frequent change in standards and rates will demoralise workers.

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 lochan answered about 3 years ago

**REQUISITE OF A GOOD WAGE PAYMENT PLAN** Wage system should be simple and easy to understand. It should be flexible. There should be uniformity. It should guarantee a minimum living wage. It should give a satisfactory standard of living to the workers. The wages rate should take into account the skill,effort and responsibility of the worker. The requirements and conditions of work should be taken into account. It should satisfy both the employees and employer and create good relations. It should minimize labour turnover. It should encourage and motivate the workers. Thanks

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Data?1494421730 rohit awasthi answered about 3 years ago

Hii WAGE “The sum of money paid under contract by an employer to a worker for his services” Wages, salary, pays fees are the synonymous terms having the same meaning. In case of those employed for manual work, they are said to paid wages. We can Use These in our Plan --- Nominal Wages --- Real Wages --- Living Wages --- Minimum Wages --- Fair Wages We can use these payment system Time Rate System - Under this system, a definite sum of money is paid for a particular period of work. It may be hourly, weekly or monthly unit of time. Piece Rate System - Under this system the worker is paid according to the quantity of work he completes satisfactorily. The rate per unit of work is fixed. This system therefore provides an adequate incentive for the more efficient workers. It does not guarantee a fixed minimum wage to worker. Combination of Time Rate and Piece Rate System - Under this system both time and product are taken into consideration. Minimum weekly wages are fixed for every worker which are to be paid irrespective of his output during the week, but his presence for the full week is necessary. Thanks

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 ROSHNI answered about 3 years ago

hii The wage payment plan contains four classifications of wage rates: a. Starting Rate — wage rate used for period of orientation and observation. This rate is paid to a newly hired employee who has no experience in the work of the classification into which he/she is hired. b. Training Wage Rates — A range of starting rates for partially qualified employees (those who have some experience in the work of the classification into which they are hired and a scale of interim wage rates to be used for inexperienced employees as they progress in their training toward the fully qualified level of job performance. c. Basic Wage Rates — wage rates which are comparable to those paid in the area and industry or field for similar work for employees who have been recognized by management to be fully capable of performing all the requirements of the job. d. Merit Wage Rates — wage rates for fully qualified employees with substantial service for above normal effort.

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Open uri20170510 32134 tcchcu?1494421832 Jitendra Suthar answered about 3 years ago

Hiiii friend.... An incentive plan aims at increasing productivity, reducing costs, improving efficiency and increasing employees’ earnings while at the same time maintaining and enhancing employee morale and employer- employee relations. **In order to achieve these, following requirements must be fulfilled:** (i) Sound policies: There must be a set of sound wage-administration policies, preferably in writing, which are fair to both management and the employees and which are such that organisation can maintain its competitive position. These policies and incentive plans must be clearly understood by all members of the management team whose decision can in any way affect the wages paid to the employees. (ii) Workers’ participation: Wage incentive plan is installed primarily to benefit the persons who will in any way be affected by its installation. So the management must discuss the wage incentive system with the employees and their representatives. (iii) Scientific system for fixing standard workload: Under the incentive plan, extra payment is given for the extra work, i.e., work which is over and above certain standard quantity. Such standard work-load must be clear, specific and fixed with scientific time studies so that majority of the employees are able to give extra production for extra payment. Incentive wage plan will be meaningless if majority of workers remain away from its benefits. (iv) Simplicity: A good incentive plan is one which is easy to understand and simple to operate. An average worker must be able to know the incentives offered and what he is expected to do. The monetary benefits must be made clear to all workers. This will create initiative and interest among them. (v) Guarantee of minimum wage payment: An incentive wage plan must ensure certain minimum wage payment to every worker per month. This should be irrespective of the production he gives. Such provision of minimum guarantee payment creates a sense of security and confidence among the workers. (vi) Definiteness: An incentive plan must be definite. This means frequent changes should not be made as such changes create confusion and doubts in the minds of workers. Such plan must give clear benefits to workers. (vii) Wide coverage: An incentive plan should not be for employees of certain sections only. It should have wide coverage and almost all employees should be covered by such plan. Such wide coverage makes the plan popular at all levels and among all categories of workers. In addition, an incentive plan should be equitable. This means it should provide equal opportunity to all employees to show efficiency and earn more. (viii) Follow up: Management must constantly and carefully follow up and check up to see the her employees are adhering to the specifications. Similarly, management must observe whether the standards are being met or not. The reasons for any deficiency should be instigated and corrective steps taken to facilitate the smooth functioning of wage incentive system. (ix) No upper limit: The wage incentive system should place no upper limit on incentive earnings. This is so because the more the worker produces, the more the organisation will be benefited in general. Therefore, if a selling is put to the incentive earnings, it may also curtail the opportunity to achieve lower production costs per unit. **Regards,**

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Open uri20170510 32134 1nqu8aj?1494421649 sowmya answered about 3 years ago

hii, Following principle should be adhered to make the wage incentive plan successful: (1) Suitable Climate—Success of an incentive plan greatly depends on the kind of relation between management and workers. If the relations are good, any incentive plan may work successfully. If there is mutual ill-will workers may oppose it considering it as an attempt by the management to force them to work hard. It is necessary that before introducing any incentive scheme, workers and management should discuss the scheme. (2) Information as to goals—The workers should be told about the objectives and goals of the incentive plan in clear terms. The objective may be to increase the quality or quantity of the production. (3) Simplicity—The incentive scheme should be easy to understand and simple to operate. (4) Just and Equitable—It should take into account the skills and abilities of workers. If it is unduly biased in favour of efficient and experienced workers, it will lack motivation for those who arc not so. If it seeks to favour inexperienced and inefficient workers, outstanding and ambitious workers will not have any use for it. (5) Flexible—An incentive scheme should be flexible enough lobe adapted to the needs of any change in the situation. (6) Attractive—Incentive payments, should be large enough to attract the employees. If a worker already earning Rs. 500 a month is to get an extra benefit of Rs. 25, he may not consider it worthwhile to strain himself for such a petty gain. (7) Economical—The cost of operating an incentive scheme should be compared with the benefits accruing from it. The gains and benefits should exceed the cost of its implementation. (8) Minimum guaranteed wages—The employee should be assured of a minimum base wage as determined by job evaluation method, irrespective of his output. This gives the worker a feeling of security about his means. The base rate may be reduced due to circumstances beyond his control. (9) Grievance procedure—An incentive wage plan gives rise to grievances of all sorts. Therefore, the management should have an effective grievance procedure to deal with complaint and dissatisfaction ventilated by employees. (10) Stability-The standards and rates once fixed under an incentive plan should not be frequently changed unless there is a substantial change in methods, materials or equipment used in production process. Frequent change in standards and rates will demoralise workers. (11) Comprehensive coverage—Any scheme of incentive wages should embarrass all jobs. If any job in the unit is left out, the workers so neglected will develop grievances and will shake the faith in management. (12) Conducive to workers health and welfare—The incentive wage plan should not aim at overstraining workers because it may tempt the workers to work hard in order to earn more and management may also be benefitted but such gains will not last longer. In the long run, its consequences will be disastrous because it will have ill effects on workers health. (13) Attainable standards—Standards set for performance should reasonably attainable by average employees. They should be neither too difficult nor too easy to attainable by average employees. They should be neither too difficult nor too easy to attain.

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