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Employee Remuneration: Omponents

Employee remuneration refers to the compensation an employee receives in return for their contributions to an organization. There are various components and methods of remuneration. The main components are wages and salaries, incentives, fringe benefits, perquisites, and non-monetary benefits. Common methods include time wage systems, piece wage systems, and incentive wage systems. The objective of remuneration policies is to attract, retain, and motivate competent employees in order to promote economic development.

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43 views

Employee Remuneration: Omponents

Employee remuneration refers to the compensation an employee receives in return for their contributions to an organization. There are various components and methods of remuneration. The main components are wages and salaries, incentives, fringe benefits, perquisites, and non-monetary benefits. Common methods include time wage systems, piece wage systems, and incentive wage systems. The objective of remuneration policies is to attract, retain, and motivate competent employees in order to promote economic development.

Uploaded by

satyajitu
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Employee Remuneration

 it is the compensation an
employee receive in return of
his or her contribution to the
organisation

components
‡ Wages and salaries
‡ Inc entives
‡ Fringe benefits
‡ Perquisites
‡ Non monetery benefits
Importanc e
‡ Severals problems relating to personnel
c entred around remuneration.
‡ It enable to attra c t ,retain the c ompetent
pepole
‡ It has been motivating to perform better.
‡ Main obje c tive of wage poli c y in any c ountry
should be the promotion of e c onomi c
development
Methods of Remuneration
‡Time wage system
‡Piec e wage system
‡Inc entive wage sysytem
Time wage system
‡ The wages under this method are paid on the
basis of time devoted to the enterprise rather
than the number of goods produ c ed .The basis
for payment of wages may be daily, weekly or
monthly
‡ The employer pays for the time of employee
whi c h is bought by him
Example
‡ Suppose an employee is given Rs 10 per day his
wages for 25 days will be
T*R= E
where ,
T= time worked
R= rate per hour
E= workers earning
Rs 10 *25days= RS 250
A dvantages
‡ Se c urity
‡ Simple
‡ Quality of goods
‡ Proper handling of ma c hines and materials
‡ Only method suitable in assembly line
D isadvantages
‡ A bsen c eof in c entives
‡ Wastage of time
‡ Difficulty in cal culating labour
c ost
Suitability
‡ Where Supervision is stri c t
‡ If quality produ c ed is of prime
importan c e
‡ If interruption in work is frequent
and beyond the c ontrol of workers
‡ Where produ c tivity of employee
c annot be easily measured
Piec e wage system
‡ Workers are paid their wages
a c c ording to amount of work done
rather than time spent
‡ Formula
Wages= units produ c ed *rate per
unit
Example
‡ Suppose rate per pie c e is Rs 10 and A
produ c es 100 units in a day
then wage of A will be,
Rs 10* 100 units =Rs 1000
A dvantages
‡ In c rease in produ c tion
‡ Estimation of labour c ost
‡ D e c rease in c ost per unit
‡ Effi c ient and ineffi c ient c ategorisation
‡ Less supervision required
‡ Improvement in working methods
D isadvantages
‡ Low wages of beginners
‡ Poor quality
‡ No se c urity of wages
‡ Mishandling of ma c hines
‡ Opposed by unions
‡ D eterioration of health

Suitability
‡ Where units of output are measureable
‡ The job is standardised , the flow of work is
regular and breakdown are few
‡ Quality c onsideration are less important than
quantity
‡ Supervisors c annot devote enough attention
to individual performan c e
Inc entive wage system
This wage system in c rease produ c tivity by
indu c ing employees to work hard. The
employee is rewarded for produ c ing more
under in c entive plans
Essentials of In c entive Plans
‡ For ea c h job, basi c rate must be established, it
is the minimum wage whi c h ea c h worker
should get
‡ Wage in c entive system should be simple to
understand, if it is the c ompli c ated its utility
‡ It must be dis c ussed with workers and
supervisors before it is installed. No in c entive
plan c an be su c c essful.
Essentials of in c entive plans
‡ The methods of doing the job should be
standardised through motion studies and
work simplifi c ation te c hniques

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