“I don’t pay good wages because I have a lot of money; I have a lot of money because I pay good wages.”– Robert Bosch
Wage is one of the most essential, important and crucial in everyone’s life who are working for others. Wage is the remuneration paid by an employer to his employees for the services rendered under a written or unwritten contract of employment for work done. The wage system is as old as the society. In earlier time the wages were paid in kind in the form of grains and the food, but after industrialization wages form a complex problem and now it has became the most sensitive area of public policy. In simple language wages can be defined as the ‘ reward ‘ to the labourers for the services rendered by them. Wages can be paid daily, weekly, fortnightly, monthly or on per hour basis. The services provided by the employee may be in the form of physical or mental services. Wages play a major role in influencing the employee and workers as if you pay a good amount of wages to your workers he will also pay you back through his performance by increasing the production level. So, it is based on give and take principle. Wages are most important component of labour cost, it includes non – wage cost such as employer’s contribution and taxes. Wages helps in improving the competitive position of our organisation in national and international markets. Wages are part of the expenses that are involved in running a business. Wages should be fixed in such a way which satisfies both workers and management. As we know that labours and workers are very important factor of production. If there is no labour to work, all other factors be it land or capital, will remain idle. So, satisfying them is a big task. Thus, Karl Marx termed labour as ‘ creator of all value.” Wages should be such which helps your workers to satisfy their and their family members needs. The organisation should provide that much amount of wages which can raise their standard of living as if he can fulfill all his dreams and aspirations he will be more motivated and productive and this will help your organisation to achieve its goals. Good wages will bring a sense of satisfaction among workers as they feel that if my organisation is paying me so much and is taking care of me so in return I should also make them happy through my work and fulfill their expectations. It also helps in providing a sense of recognition and determines there social status. Fair wages should be provided to each and everyone without any discrimination. And in this way wages acts as a means to attract and retain qualified and motivated employees. The characteristics of wages are:-
- Payment of wages is the terms of contract between the employer and the workers.
- It is determined on the basis of time-rate system and piece-rate system.
- Wages create utility.
- Wages can be paid on daily, weekly, fortnightly or on monthly basis.
- Wages can be paid in cash or in kind.
- It is the remuneration paid to the workers for the services rendered by them.
Some of the elements of wages and salary system are:-
- Identifying the available salary opportunities and communicating them to employees.
- Relating the salary to needs and goals of the organisation.
- The next important element is to develop quality, quantity and time standard according to work and goals.
- Fourth element is to determine effort which is necessary to achieve standard.
- Measures the actual performance.
- Compare the performance with salary received.
- Measures the job satisfaction gained by the employees.
- Adjust the salary levels accordingly.
Last But Not the Least
Wages is a vital part of Human Resource Management as it is one of the biggest factor which is influencing industrial relations. It also helps in minimising labour turnover by increasing employee morale and satisfaction.