WAGE PAYMENT

Jielyn Jane San Miguel

 Rerwards

Day Work Plans

Day

work plans compensate the employee on the basis of number of hours worked times an established hourly base rate.

 the

normalized labor costs yc can be expressed as yc=yw/x where yw=normalized hourly base rate (=1) x=normalized productivity or performance

Wages and Unit labor Cost

1.5

Normalized unit Labor Cost Nomalized Wages

0.5

0.5

1 1.5 Productivity = x

Flexible Compensation Plans

Flexible

compensation plans include all plans in which the workers compensation is related to output.

 Group

plans are applicable to two or more persons who are dependent on one another working as a team

 Group 1.

plans have other drawbacks personnel problems brought about by non-uniformity of production, coupled with uniformity of pay; and difficulties in justifying base rate differentials for the various opportunities within the group

2.

 group

plans do offer some decided advantages over individual incentives: 1. ease of installation, due to ease of measuring group, rather than individual, output; and
2.

reduction of administration cost due to reduced paperwork, less verification of inventory in process, and less in-process inspection.

PIECEWORK PLAN
all

standards are expressed in money, and the operators are rewarded in direct proportion to output standards are expressed in money, and the operators are rewarded in direct proportion to output

all

Relationship between costs, wages and productivity

STANDARD HOUR PLAN

It

offers all the advantages of piecework and eliminates the major legal problem. Graphically, the relationship between operator wages and unit direct labor cost, plotted against productivity is a combination

MEASURED DAY WORK

an

incentive system that lessened the direct relationship between a standard and workers earnings

Modifications of measured day work installations

First, job evaluations establish base rates for all jobs falling under the plan. Second some form of work measurement determines standards for all operations. Third, analysts, keep a progressive record of each employees efficiency for one to three months.

 The

principal advantage of measured day work is that it takes the immediate pressure off workers. They know what their base rates are, and they realize that regardless of performance, they will receive that amount for the period.

 The

limitations of measured day work are apparent

because of the length of the performance period, the incentive feature is not particularly strong to be effective, the plan places a heavy responsibility on supervisors for maintaining production above standard.

1.

2.

3.

keeping detailed rate records and making periodic adjustments are costly in all base rates.

GAIN-SHARING PLANS
Gain-sharing plans, also known as productivity sharing plans, are characterized by sharing the benefits of improved productivity, cost reduction, and/or quality improvement.

Scanlon Plan recognize the value and contribution of each member of the firm, encourage decentralized decision making, and seek to get each employee to identify with the organizations objectives through financial participation.

Three fundamental principles form the basis of this plan:

1. 2. 3.

bonus payment identity with the company or firm employee involvement.

Base ratio=payroll costs to be included value of production

 Rucker

Plan

emphasizes identity with the company and employee involvement, through the establishment of a suggestion system

provides a bonus in which everyone, excluding top administration, shares a percentage of the gains.

Rucker standard=payroll costs included in group

production value

IMPROSHARE
The

IMprovedPROductivity through SHARing plan

Its

goal is to produce more products in fewer hours of direct and indirect labor. the work-hours saved for a given number of units produced to the hours required to produce the same number of units during a base period.

compares

 Work-hour

standard=total production work-hours

units produced

 Employee

(ESOPs)

Stock-Ownership Plans

These

plans involved the creation of a trust that holds company stock for its employees.

 Profit

sharing
plans

Majority of Profit Sharing systems fall into one of the following broad categories:
Cash

Deferred

plans
plans

Combined

 Methods

Sharing

of Distribution under profit

methods for determining the amount of money to be given individual employees from the companys profits are common:
1.

The first and least used is the share and share alike plan. The most commonly used method of distribution under profit sharing is based on the regular compensation paid to workers. Another popular means of profit distribution is through the allocation of points.

2.

3.

 Indirect 1. 2. 3.

4.
5.

Financial Plans fair and relatively high base rates equitable promotion practices sound suggestion systems a guaranteed annual wage relatively high fringe benefits