Time Wage System

Time Wage System

Time Wage System
Time Wage System

Time-based wage payment system is the oldest method of the wage payment system. According to this method, wages are paid on the basis of time, or in other words, wage payment is not concerned with the amount of work done but with the completion of a fixed time period. Therefore, it is payable daily, weekly, hourly or monthly basis. This system is mostly adopted in such productive units, where the emphasis is given more on the type and quality of the product than on the quantity or amount; and where the machinery or materials used in production are very valuable and are liable to get damaged by improper use.

Merits of the Time Wage System

  1. Simplicity

    In this method, it is easier for the worker to calculate his wages, since the per-day wage rate is equal. The same convenience is also shared by the employers.

  2. Display of Skill and Art

    Since there is no given time limit to complete the work, the workers get the full opportunity to show their art and skill in their work.

  3. Safety of Machines

    As the workers under this system are given sufficient time to complete their work, and their wages are also fixed beforehand, there is no need to give unnecessary load on the machines, which increases their lifetime.

  4. Spirit of Unity

    Under this system, the efficient and inefficient, old and new all workers earn equal wages; hence there remains no feeling of jealousy or discrimination between them, giving way to a healthy working atmosphere. Due to this reason, this system of wage payment is more popular among the Trade Unions.

  5. Lesser Possibilities of Accidents

    Since the workers have no binding to finish their work in a short time or have no fear of wage cuts if their work remains incomplete. They can carry on their work with caution and patience which minimizes the chances of accidents.

Demerits of the Time Wage System

  1. Lack of Initiative

    The more efficient workers, under this system, are not rewarded in any form; hence they do not feel the urge to show their efficiency. After showing a better performance they get the same wages as an ordinary worker, and this brings down their efficiency to a normal level.

  2. Wastage of Time

    Most of the workers waste their time doing little or no work because their wages are based on time spent in the factory instead of productivity. In this manner, much of their time is wasted.

  3. Increase in Supervision Cost

    To stop the wastage of time by the workers, supervisors have to be appointed in each division, this increases the supervision cost and hence to total cost of production.

  4. Difficulty in Measurement of Efficiency

    Under this system, the employer is unable to determine the efficiency of each worker, as there is no record of the productivity of each worker is maintain.

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