Tafakhar Hasnain

1.Use of time rates

2.Problem of installing incentive rates

3.Combined piece and time rates
TYPES
OF
COMPENSATION
T
COMPENSATION
SYSYTEM
DIRECT
BASE
PAY/SALARY

INCENTIVE
PAY
. BONUS
.COMMISIO
N
.PROFIT
SHARING
etc
INDIRECT
LEGALLLY
REQUIRED
. SOCIAL SECURITIES
.EMPLOYEMNT
COMPENSATON
.WORKERS
COMPENSATION
.FAMILY AND
MEDICAL LEAVE
OPTIONAL
.HEALTH
INSURANCE
.RETIREMENT
PLANS
. DISABILITY
INSURANCE
.LIFE
INSURANCE
etc
1. WAGE AND SALAY.
2. INCENTIVES
3. FRINGE BENEFITS
4. PERQUISITES

Wage is refers to as remuneration to workers particularly
hourly rated payment.
Salary refer to as remuneration paid to white collar employees
including managerial person. They are paid on the basis of
fixed period of time.
Two types of wages:-
Nominal wages:-wages paid in terms of money are called
money wages or nominal wages.
Real wages:-in addition to nominal wages the extra benefits
which the employee gets is real wages.
Incentives are the additional payment to the employees
besides the payment of wages and salary incentives are the
gains which motivates the workers to a better performance.
.


CLASSIFICATON OF INCENTIVES:
A. Positive and negative:- positives refers to reward for
better work and negative refers to penalties.
B.Individual and collective:-it is also called direct and
indirect incentives. individual incentives benefits the
worker individually while collective incentives accrue to
the group

C.Monetary and non-monetary incentives:
Monetary incentives are paid in terms of monetary and
non-monetary incentives includes merit certificates etc
Fringe benefits includes which are provided to the
employees either having long term impact like: provident
fund,gratuty,pension,or occurrence of certain events like
medical benefits, canteen ,recreation, accident leave, health
and life insurance etc.
These are generally provided managerial personnel either to
facilitate their job performance or to retain them in the
organisation.such perquisites includes:
Company car
Club membership
Free residential accommodation
Paid holiday trips.
Stock option etc

There should be definite plan to ensure that differences in pay for
jobs are based upon variations in job requirements , such as skill
effort , responsibility or job or working conditions, and mental and
physical requirements.

The general level of wages and salary should be reasonably in line
with that prevailing in the labour market.

The plan should carefully distinguished between jobs and
employees-a job caries a certain wage rate, and a person is assigned
to fill at the rate. exceptions sometimes occur in very high level jobs
in which the job holder may make the job large or small ,depending
on his ability and contribution.

Equal pay for equal work.

An equitable practice should be adopted for the recognition of the
individual differences in ability and contribution.

There should be clearly established procedure for hearing and
adjusting wage complaints.

The employees and the trade union ,,should be informed about the
procedure used to establish wage rates.

The wage rate should be sufficient to ensure for the workers and his
family reasonable standard of living

The wage and salary structure should be flexible.
CONT..
Prompt and correct payments of the dues of the
employees must be ensured and arrears of payment
should not accumulate.
For revision of wages , wage committee should always
be preferred to the individual Judgment
The wage and salary payments must fulfill a wide
variety of human needs , including the need for self
actualization .