Types of Wage Systems in Economics and Their Explanations
In wages or salaries can stimulate employees to be able to move all their thoughts, energy and attention to a company's success. There are several systems for granting wages or salaries to employees, which are as follows;
Types of Wage Systems in Economics
Wage System in Economics
Wage System According to Time
The amount of this wage system is determined based on the work time of employees, namely wages given per hour, wages given per day, wages given per week and wages given per month. In the wage system according to time, payment of wages can be done easily besides, the calculation of wages is also not difficult. But unfortunately this time-based wage system if implemented purely there will be no difference between diligent employees and employees who are not diligent, so employees do not have the drive to work better.
Wage System According to Unity of Results
In a wage system according to unity these results are generally used in industrial companies. For the amount of wages to be received by employees depends on the amount of production or the results achieved by each employee. Because of that, employees are increasingly diligent to achieve higher wages. However, if strict quality control is not carried out, it will result in lower quality goods. In order to overcome these conditions, steps that can be taken are to carefully control quality and set limits on minimum wages, without regard to the results of his work. In addition to the number of results it is also necessary to include quality requirements to determine the amount of wages.
Wholesale Wage System
In the wholesale wage system arises because companies do not need to bear the risks associated with employees. The company also does not need to select and search for needed workers. To do this, in general the wholesale system wages are more expensive than the daily wages. For the amount of wages received in the wholesale system is determined by the amount of goods produced by an employee or group of employees. In order to maintain the quality of the work, the provisions of the goods produced need to be determined in advance and agreed upon together including working conditions and requirements, equipment used and ways of working.
Premium Wage System
In the premium wage system that is provided additional wages or premiums for employees who are able to work better.
Index Wage System
The index wage system is the wages paid based on the cost of living index. This means that the rise and fall of the cost of living index will also contribute to determining the amount of wages received by workers.
Scale Wage System
The scale wage system is wages paid based on the scale of sales. That means there is a relationship that is directly proportional between the amount of sales and wages paid. If the number of sales increases, the wages paid will increase as well and if sales fall, the wages paid will also decrease.
Bonus system
The bonus system is an attempt to correct weaknesses in the payment of wages. Bonuses are additional payments outside of wages or salaries that aim to stimulate or provide incentives so that employees can carry out tasks properly and responsibly.
Business Partner System
Part of the payment of wages in the business partner system is given in the form of company shares. These shares are not given to workers individually but to workers' organizations in the company.
Wage Systems According to Number of Production or Productivity
In this case the wage system is given in accordance with an increase or decrease in the amount of production of goods or services.
Wage System According to Achievement
In the case of this system, wages are given according to the achievements or the amount of goods that can be produced by each worker.