SUBMITTED BY

NIMSHAJ .P
NITHEESH.K
GROUP NO :-6
 In all societies taking from the primitive,people have been
selling their services for wages.Wage labour existed from the
ancient,through the middle ages and till the time,factory system
devoloped and gave birth to the modern wage system.Wage may
be defined as payment for the use of labour.Wages include both
money and non money payments.
Incentives is an inducement or a reward which is given to a
worker for his efficiency and hard work.Incentives motivate and
encourage a worker to produce more and better.Incentives are in
addition to the job hourly rate and are in proportion to the
workers contribution toward production
 Wage may be defined as payment for the use of labour.Wage include
both money and non money payments.Non money payments may also
be called as fringe benefits,etc.Fair wage is a wage paid to a worker which
is fair as regards the work accomplished by him and which is sufficient to
fullfill the basic necessities of life .
TIME WAGES
_ The payment of wages on the basis of a year,a month,a week,a day is
probably the most common method.Wages paid under this methord are
often spoken of as time wages.
REAL WAGES
Real wages represent the amount of goods and services that the money
wages will buy.
Non incentives plans like time or day rate system and incentive wage
plans like piece rate and other schemes.
 Incentives is an inducement or a reward which is given to a worker for
his efficiency and hardwork.Incentives motivate and encourage a worker
to produce more products and better. Incentives are addition to the job
hourly rate and in proportion to the workers contribute towards
production.

 DIRECT INCENTIVES
Direct incentives are those which are given to an individual worker
for his own contribution.
 INDIRECT INCENTIVES
Indirect incentives are paid to a group of workers .
 FINANCIAL INCENTIVES
Financial incentives involves direct monetory payments or benefits.
 NON FINANCIAL INCENTIVES
Include good working conditions,amenities and social benefits in
the oraganisations.
Wage incentive plans rewards an employee for his good job-
performance.The various aspects of job performance are:-

o Product quantity
o Product quality
o Efficiency
o Utilization of materials,tools and plant

Almost all commonly wage incentive schemes guarantee a

minimum wage plus incentives based upon operators
performance,if it exceeds a plant wide standard.
o The incentive schemes should be profitable to both workers and
managements.
o It should help increasing production and thereby lower the related
costs.
o An incentive schemes should provide recognition to a worker for his
good condition.
o An incentive scheme should furnish a basis for cost control and
labour control and helps in reducing labour turnover and absentee
rate.
o It aims at improving relations between management and workers.
o It should reward workers in proportion to their output and thus
high up their morale.
o It should be simple,easy to understand and to operate.
o It should be well planned and guarantee a minimum wage.
o A worker should get enough and adequate incentive for his
contribution.
o A worker should be rewarded in proportion to his efforts and
achievements.
o The scheme should preferably be based on time study data.
o It should give incentive both for quality and quantity of production.
o Standards should be fairly set.
o No limits should be put on a worker’s incentive earnings.
o The plan should be installed with the consent of the employees.
o Once installed,the incentives schemes should be rigidly maintained.
1] An incentive scheme involves extra cost of:
o Standardizing method,allowed timeetc.
o Installing and maintaining.
o Keeping the record of worker’s performance.
2] An improperly structured and planned incentive scheme can be a
root of all troubles and disputes between the labour and management.
3] Observations showed that groups of workers may have different
opinions on an incentive plan and this may rise to conflicts among
workmen ,between workmen and inspectors and between workmen
and personnels who developed the incentive scheme.
 STRAIGHT PIECE RATE

In the straight piece rate system,a worker is paid straight for

the number of pieces which he produces per day.
Earning of a worker=no of pieces *rate per piece.

 STRAIGHT PIECE RATE WITH A GAURANTEED

BASE WAGE

This method is an improvement over the straight piece rate

system as it gauranteed a minimum base wage.
 A differential piece rate system tends to overcome the
disadvantages of the piece rate system by providing a gauranteed
base.It bases itself on differential wage rate;a worker fails to do so gets
his earnings at a low piece rate.

 HALSEY PLAN

In a Halsey plan a minimum wage is gauranteed and an additional

bonus is given to a worker who exceeds output standard he normally
gets a percentage of the total bonus for the saved time.
Wage of worker for 50-50 halsey plan is given by
W=RT+[(S-T)*R]/2

R=hourly wage rate T=Actual time taken to comlete the job

S=Standard time
 Rowan plan like halsey plan provides a minimum gauranteed
base wage.apart like halsey plan relies upon output standard
based upon past production records and unlike hasley plan gives
bonus on
(S-T)/S rather on (S-T) that is time saved in Rowan plan,

W=RT+[(S-T)/S]*RT

R=hourly wage rate

T=actual time taken to complete the job
S=standard time
 Like other incentive wage schemes a minimum wage is gauranteed
B represents unit of work.One B stands for one standard work minute
and it includes working time as well as time for rest.

 EMERSON’S EFFICIENCY PLAN

Efficiency of a worker=standard of allowed time/actual time

taken by the worker to complete the job
= [S/T]
 A group incentive plan is preffered to an individual incentive plan
Where,the output of effective contribution of each worker cannot be
accurately measured.The principle of the group incentive plan can
be evaluate the collective performance of the group,calculate the
total incentives and earnings and then divide the earnings in equal
or any other proportion amongst the workers depending upon the
qualities possesed by each other.
Workers are classified as:-
1. Direct workers :-Workers who operate the machines and turn out
production.
2. Indirect workers:-Workers who assist ,guide and superwise the direct
workers during production runs.
Indirect workers are categorised as:-
I. Material handlers,crane operators,set up men etc.
II. Shop inspectors,foremen and supervisors.
III. Managers.
The main difficulty associated with the incentive payments to indirect workers is
that their contribution towards production cannot be accurately measured and
hence it is extremely difficult to reward them effectively and suitably.The wage
incentive plan applicable to direct workers cannot be usefully employed for
indirect workers.
 Labourers ,crane operators,set-up men etc.
a) They can be given the same or half the incentive what the direct worker get.
b) They can be given a bonus at a flat rate.

 Supervisory staff:-Supervisory staff can be paid an incentive on the output for which
it is responsible.A supervisor can be given a bonus depending upon :-
i. The number of satisfactorily units produced by his section/department in one day
or a week
ii. The number of work hours saved in achieving the same output.
iii. Reduction in scrap and wastages .
iv. Net cost saved for organisation.
v. Optimum utilization of workers .

 Managerial staff :-Incentive to managerial staff may be in the form of :-

a. Bonus
b. Issue of shares
c. Profit sharing
d. Fringe benefits