It can also be viewed as the price that is incurred by the employer for hiring the personnel to do the expected work and to meet the targets of the company. If an employee is performing hazardous work pay him more. Number of hours worked by the employees: 4. And there are also salaried, paid employees who get a fixed salary every month. A good wage and salary structure should also conform to the minimum wage laws. Some Minimum Wage Employees Play Crucial Roles. Copyright 10. Here the hourly rate workers can even demand extra overtime wages from the employers. These workers are professionally less qualified and generally work at the ground level. Therefore the key question is how high the min wage can rise before causing unemployment. Advantages of Time Wage system Simple system and economical. Hourly wage earners are able to get the wages on a daily basis because their pay is directly related to the number of hours worked. Total hours worked = 400 hrs, wage per hour = 20 Wages= Total hours worked X Wages rate per hour. They do not have any interference in the policy-making decisions of the company. Wage incentive schemes help in improving the industrial relations … Disclaimer 9. While salaried employees earn regular paychecks, even if they work long days during busy periods, certain hourly wage-earning employees are eligible for overtime pay for hours worked beyond the standard 40-hour workweek. For example, if a worker works for 8 hours a day, then he will be paid for a complete 8 hours and if works overtime, then he will be paid more for that. As the employees who work on an hourly basis are paid according to the time spent at the workplace, they will try to maintain the quality although the quantity might be less. Since these employees are not professionally qualified this is an advantage they get. Before publishing your articles on this site, please read the following pages: 1. Whenever people working in companies want to make a comparison amongst the jobs in various companies, they calculate the employee wages and average wage rate. Quality of products is maintained when they are manufactured by wage earners because their supervisors ensure that the quality of the products is maintained. The Fair Labor Standards Act (FLSA) designates most employees as exempt or non-exempt workers.Exempt employees are not entitled to paid overtime for working more than 40 hours per week Some of the Advantages of Wage and Salary Administration are: 1. Advantages of Piece Wage System; Disadvantages of Piece Wage System; 1. “Time” is made a basis for determining wages of worker. Such employees might even neglect their health if they are much in need of money. A minimum wage creates an unfunded mandate that targets business owners. Lower benefit packages of the employees: The Best Chrome Extensions for Recruiters Are, Coronavirus and Working From Home Policy Best Practices, How to Work From Home Remotely as a Recruiter, How to Prevent Coronavirus by Disinfecting Your Home, How to Write an Elite Executive Resume? Reduced costs; Administrative ease; Speed of service; Security; Flexibility; External expertise; Cost control. 1. If all things are equal in your situation, then … The benefits of being paid a set salary include the following: Guaranteed a certain amount per paycheck. Mean Girls at Work – How to Best Deal with Them? Advantages. Content Guidelines 2. The wage rates are fixed for an hour, a day, week, a month or even a year (seldom used). Employers usually classify nonmanagement positions as hourly wage. They are. It will build high morale of employees and act as an incentive to greater employee productivity and efficiency. if the labour market is a monopsony, a minimum wage may not cause unemployment. There are several advantages and disadvantages of a minimum wage for workers to review when looking at the effects of a guaranteed income when employment on society as a whole. What Makes a Great Workplace? Piece work is one of the simplest and most commonly used of all incentive plans. A research done by th… But, workers working on an hourly wage rate basis have to work for extra time to earn that extra income. Pay according to the work performed by an employee. The first benefit is that it helps families. Extensive experience in Complete Recruitment Life Cycle - Sourcing, Negotiation and Delivery. The average wage can be used to determine the hourly wage rate, which can be used in determining whether they are in accordance to the job or not. Hourly wages and fixed salaries comprise the two principal ways to compensate an employee. The various merits of wage incentive schemes are: 1. A good and definite wage and salary structure would enable the company to project in the public an image of a progressive employer. Employees working on an hourly basis are generally less qualified than the salaried employees and thus they get less salary. This is one of the major advantages of an hourly wage rate because these employees do not fear losing the job as they don’t have any written contract with the employer. Attract And Retain The Employees: If an organisation possesses good wage and salary structure, it will attract and retain suitable, qualified and experienced personnel. The terms and conditions between the employer and the employee is verbal and all the conditions of working are decided only then and there. Here are the advantages and disadvantages of minimum wage: List of Advantages of Minimum Wage. Employees working on an hourly wage basis, generally don’t have any say in the decision making of the company. A potential benefit of increasing the minimum wage is that it boosts the income of low-income workers who earn an hourly wage at or below the minimum and helps them make ends meet. But, those who are working on salaried basis are under constant pressure to meet the targets, so they will try to meet the quantity rather than the quality of the product or the service they provide. Take advantage of the opportunity to learn what your competitors pay to remain competitive for the best talent in terms of hiring and retention. One of the primary disadvantages of getting paid an annual salary as opposed to getting paid by the hour is that you do not get paid overtime. Those who get salary are not only professionally qualified but also bears the responsibility for the growth of the company. There will be lesser labour turnover, industrial disputes and employee grievances and exigencies. Basic-rate systems pay workers a fixed amounton an hourly, weekly or monthly basis. So, they can work at any workplace where they get more salary. An advantage of the hourly wage rate is that a worker is paid for the hours he actually works. Workers feel contented and … Narrowing this gap is important to maintaining a … If these employees have to meet an extra expense any month then they will have to spend extra hours at the workplace and meet their requirements. See also: Advantages of Minimum Wages Evaluation of Min Wages The effect of a min wage on unemployment is uncertain, the structure of the labour market is very important. Hourly employees are paid a higher hourly wage once the employee works a certain amount of hours in a week, typically 40. There are advantages in the implementation of the minimum wage in the labour market. 1. The Advantages & Disadvantages of Hourly Wages. You can tweak the budget annually by deciding whether … Some of the Advantages of Wage and Salary Administration are: If an organisation possesses good wage and salary structure, it will attract and retain suitable, qualified and experienced personnel. Opportunity to improve their standard of living and morale. Companies spread annual, fixed salaries over bi-weekly or monthly paychecks throughout the year. Hourly wage rate employees have fixed money to spend: 5. This is generally done because the employees who work for wages are not professionally qualified and they are just the production team of the company. 2. How to Improve Your Credit Score, Who Are the Highest Paid Athletes in the World, What are the Highest Paying Jobs in New Zealand, Best Agile Testing Interview Questions and Answers, How to Write Motivation Letter for Job: 16 Best Tips. An essential function of wages for the employee … Wage earning employees cannot be charged against any legal obligation because they are not bound by any contract. Wage, which is one of the factors of production, is determined via interaction of market forces of supply and demand. To face such a situation, the employee must have a habit of saving money from their income. These benefits are universal as they cater for needs of both skilled and unskilled labor (Koshers 132). Although you might regard a particular position as a minimum-wage job, your company’s competitors might be offering better pay for the same type of work. Salaried employees are paid more salary because they are more qualified than the employees working on an hourly wage rate. List of the Advantages of a Minimum Wage. Hiring an employee is expensive, and employment agencies and freelancers generally charge higher margins than a wage portage company. Image Guidelines 5. 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