Question

1. If you own a manufacturing company, would you prefer the labor to be paid under “Piece wage system” or “Time wage system”? Justify you answer.

2. The following is the news of Times of Oman Newspaper, dated April 12^th, 2020:

           

Forcing local and expatriate workers in Oman to go on unpaid leave during the current COVID-19 situation to avoid paying them their salaries is a violation, the General Federation of Oman Workers has said.

The federation said so after receiving 30 reports of violations of workers’ rights in just five days. These violations concerned the deduction of wages, forcing workers to leave on unpaid vacation, and companies failing to reduce the number of employees present at a place of work.

The federation said in a statement, "The number of violations observed is constantly increasing and does deal with a number of humanitarian aspects of the expatriate workforce, some of which are related to the minimum requirements for living, such as the availability of adequate housing, food and the payment of wages."

In addition to the above, the General Federation of Oman Workers observed that the days workers spent at home under quarantine were being deducted from those allocated towards their annual leave, a practice that also constituted a violation.

“Private sector institutions need to exert more effort to protect the national and expatriate workforce and commit to paying their wages, as well as ensure the availability of the necessary health standards at their workplace and residences,” said the GFOW. “There is the need to make them aware of the precautionary measures issued by the competent authorities.”

“The federation will continue to monitor violations of the rights of the national and expatriate workforce in the private sector, and those violations will be dealt with in coordination with the competent authorities," added the organization.

Source: Times of Oman, 12April 2020.

Accessed from: https://timesofoman.com/article/3013669/oman/government/forcing-workers-to-takeunpaid-leave-considered-a-violation

REQUIRED: If you were a Costing manager of a private company, what strategy would you adopt for the present Covid-19 situation regarding the costing of wage, by considering both company and General Federation of Oman Workers aspects? Explain in detail.

Answer 1

First question

I prefer piece wage system than time wage system. Under this system, wages are paid on the basis of the output of workers without considering the time taken in performing the work thus the workers are paid on the basis of quatity of output. For calculating total earning of workers, piece rate is multiplied by the total number of units production.

Suitability

1. Quality of work is not important
2. Work is of repetitive nature and can be measured in units
3. Piece rate can be satisfactorily fixed

Advantages

1. This system works as an incentive to workers to produce more. Under this system the efficiency increases. Thus it maximises output and minimises the per unit cost.
2. The quantum of idle time is minimised
3. It is also simple to operate
4. It is easily understood by workers
5. The workers try to discover new techniques for efficient production, resulting in more production and more wages for them