Sound wage system is one of the most crucial factors required for the success and long run survival of the business. Ideal wage system helps to improve employee motivation and job satisfaction. It helps to increase the operational efficiency and productivity of the firm. Wage system should be fair, flexible and acceptable by the employees.
In this post we highlight some notable features of effective wage system.
An effective, ideal and sound wage system should possess the following features:
1. Fairness
And ideal wage system should be fair and scientific. It means it should ensure similar pay for similar types of jobs, skills and abilities.
2. Minimum Payment
A good wage payment system should assure minimum payment of wage to employees.
3. Acceptable
Another key feature of sound wage system is that it should be accepted by all the workers in the organization. It helps to reduce labor turnover and absenteeism.
4. Flexibility
It should be flexible to adopt changes. It should be changed according to the change in internal or external environment.
5. Incentives
It should ensure proper incentive to hardworking employees which helps to increase efficiency and productivity.
6. Simplicity
Wage system should be simple to understand by all workers (top level to bottom level).
7. Satisfaction
It should be able to satisfy the workers in the organization. Satisfaction leads to motivation which helps to improve productivity.
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8. Mutual Cooperation
Wage system should discourage individualism and promote cooperation among the workers at the workplace.
9. Government Policy
A good wage system should be guided by the government policy and norms of trade unions.