Question

What is labor remuneration and write the advantages of wage payment based on the level of output.

Answer 1

The remuneration for labor is wages. On the basis of pay scale & other allowances which are prescribed in the terms of employment, calculation of wages paid to direct or indirect workers is done.

Advantages of wage payment based on the level of output

1. Incentive for higher production : This system provides incentive to better workers to produce more and they are encouraged to realise their personal ambitions.

2. Fairness : This system ensures fairness by correlating wages and productivity.

3. Costing : Costing of production becomes easier as wages form a constant factor of the unit of output.

4. Lesser supervision : Cost of supervision is less as the workers need not be subjected to constant supervision.

5. Personal decision : Under this system, if a worker is constantly producing bad results in a particular job, he may be shifted to another job.

6. Economy : The cost per unit can be brought down with larger output.

7. Motivation : Under this system, as the payments are made on the basis of result. This encourages and motivates workers to perform better, so that, their efficiency and productivity may be increased.