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Labors' Remuneration on Time Basis Homework Help, Tutoring
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Methods of Remuneration, Remuneration on Time basis Assignment Help, Tutor Help
Labor's Remuneration on Time Basis Assignment / Homework Help
Labor's Remuneration on Time Basis

Methods of Remuneration:

(1) Remuneration on Time basis:

The following schemes are under this head:

  • Time Rate system:

    Under this scheme, payment is made to a worker, irrespective of his outturn, at a specified rate, on the basis of his attendance.

    The specified rate could be in terms of hour, day, week or month. After the existing rate for similar employment in the area has been considered, the rate is fixed. The rate could be a consolidated one or it could be on a scale which starts from the minimum & through increments at different stages, rises to the maximum. At a particular stage of the scale, there may be imposition of efficiency check up. The system is also called time work system, day work system, day wage system, day rate system etc.

    Time rate system is suitable in case of:

    • Workers who are highly skilled

    • Workers who are unskilled & trainees

    • When the work is beyond the control of the worker

    • When on the output of the previous worker in the chain, the work is dependent

    • When the work cannot be measured in terms of homogeneous units

    • Close supervision is required for the job

    • Work is of high quality & precision.

    Advantages of time rate system are:

    • Much clerical effort is not required for the calculation of wages, which can be done easily

    • The worker can verify the calculation of the wages from the specified rate & the gate time, as a result no suspicion will arise in his mind

    • For the period of attendance, assurance is given to the worker of his wage at the specified rate

    • For protecting the quality of work, it is the most suitable method

    • Time rate system is only applicable in cases where measurement of work cannot be done in terms of a measuring stick.


    Disadvantages of time rate system are:

    • From the view point of workers it can be said that, efficiency is not encouraged by time rate system. All are treated at par; thereby dissatisfaction arises amongst the efficient workers who lose efficiency gradually.

    • From the employers point of view it can be said that, for much idle time he has to make payment.

    • From the view point of nation it can be said that, if time rate system is introduced, the nation suffers from low rate of production.

  • High Wage Plan:

    In this case, time rate is fixed at a level which is higher than the prevailing rate in the locality for a similar employment & as a result, standard of efficiency & output fixed for a worker is correspondingly high. A worker is taken out of the scheme if the level of efficiency cannot be attained by him. Obviously, the employer assured the working conditions suitable for attaining the standard efficiency. High wage plan is suitable for organizations whose objective is to achieve high quality of output & high productivity.

    Advantages of High wage plan are:

    • Like ordinary time rate, the scheme is simple.

    • Supervision cost is reduced & through higher productivity, labour cost & fixed overhead per unit of output also gets reduced.

    • Incentives are provided by which workers gets attracted.


  • Graduated Time Rate System:

    Under this scheme, two elements are there in the worker's time rate:-one element is fixed, which is dependent upon the nature of the work (i.e. fixed rate is decided by the job requirements) & the other element is variable which is dependent upon the worker's individual merit rating & the cost of living index. The worker's composite time rate is constituted by the aggregate of the two elements & the aggregate is known as "measured day work" & hence measured day work is the other name of the graduated time rate.

    The method is complicated. There will be a separate rate for each individual worker in the same job. The rate of the worker, who frequently moves from one job to other job, needs to be revised on every moment. The method will not be easily understandable by the worker & as a result suspicion may arise. Graduated time rate system is not in much use because of the above shortcomings.

  • Differential Time Rate system:

    Under this system, for different level of efficiency, different time rates are fixed. A percentage of efficiency is fixed & the worker gets normal rate up to that. If that percentage of efficiency is crossed by the worker then there will be step by step increase in his time rate.
    Let Rs. 4 be normal hourly rate. The percentage of efficiency up to which the normal hourly rate is applicable is Rs. 50 & for each 10% increase in efficiency, the multiplier of the hourly rate increased by 10%.

    At different levels, the hourly rates will be as follows:
    Up to 50%       efficiency Rs.4*1.00 = Rs.4.00
    Above 50% & up to 60% efficiency Rs.4*1.10 = Rs.4.40
    Above 60% & up to 70% efficiency Rs. 4*1.20= Rs.4.80
    Above 70% & up to 80% efficiency Rs. 4*1.30= Rs.5.20

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