{{unreferenced, date=November 2009 Wage Payment Systems are the different methods adopted by

organization An organization or organisation (Commonwealth English; see spelling differences), is an entity—such as a company, an institution, or an association—comprising one or more people and having a particular purpose. The word is derived from ...

s by which they remunerate labour. There exist several systems of employee

wage A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', ''prevailing wage'', and ''yearly bonuses,'' and remuner ...

payment and

incentive In general, incentives are anything that persuade a person to alter their behaviour. It is emphasised that incentives matter by the basic law of economists and the laws of behaviour, which state that higher incentives amount to greater levels of ...

s, which can be classified under the following names.

Different Methods

;Time Rate Systems * Time Rate System: Under this system, the worker is paid by the hour, day, week, or month. * High Wage plan: Under this plan a worker is paid a

wage rate A wage is payment made by an employer to an employee for work done in a specific period of time. Some examples of wage payments include compensatory payments such as ''minimum wage'', ''prevailing wage'', and ''yearly bonuses,'' and remunera ...

which is substantially higher than the rate prevailing in the area or in the industry. In return, he is expected to maintain a very high level of performance, both quantitative and qualitative. * Measured day work : According to this method the hourly rate of the time worker consists of two parts, namely, fixed and variable. The fixed element is based on the nature of the job i.e. the rate for this part is fixed on the basis of job requirements. The variable portion varies for each worker depending upon his merit rating and the

cost-of-living index A cost-of-living index is a theoretical price index that measures relative cost of living over time or regions. It is an index that measures differences in the price of goods and services, and allows for substitutions with other items as pric ...

. * Differential time rate : According to this method, different hourly rates are fixed for different levels of

efficiency Efficiency is the often measurable ability to avoid wasting materials, energy, efforts, money, and time in doing something or in producing a desired result. In a more general sense, it is the ability to do things well, successfully, and without ...

. ;Payment on Result * Piece Work ** Straight

piecework Piece work (or piecework) is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. Context When paying a worker, employers can use various methods and combinations of ...

system : The wages of the worker depend upon his output and rate of each unit of output; it is in fact independent of the time taken by him. ** Differential piece work system: This system provide for higher rewards to more efficient workers. For different levels of output below and above the standard, different piece rates are applicable. *** Taylor Differential

Piece Work Piece work (or piecework) is any type of employment in which a worker is paid a fixed piece rate for each unit produced or action performed, regardless of time. Context When paying a worker, employers can use various methods and combinations of ...

System *** Merrick Differential Piece-rate System * Combination of Time and Piece Work ** Gantt task and bonus system: the system consists of paying a worker on time basis if he does not attain the standard and on piece basis (high rate) if he does. ** Emerson’s efficiency system: Under this system minimum time wages are guaranteed, but beyond a certain efficiency level, bonus in addition to minimum day wages is given. ;Sharing systems * Lay system. Peculiar to the early whaling ships. Each of the crew, from captain to cabin boy, got a fixed share, called a "lay" of the profits. The captain might get 10% of the profits, the cabin boy 1/250th. (https://www.jstor.org/stable/1884458?seq=1, http://www.colby.edu/economics/seminar/hilt_paper.pdf p3) * Sharecropping. A landowner allows a tenant to farm the land in return for a share of the crops produced on it. * High level executive contracts. More info needed

Living Wage

Living wage A living wage is defined as the minimum income necessary for a worker to meet their basic needs. This is not the same as a subsistence wage, which refers to a biological minimum, or a solidarity wage, which refers to a minimum wage tracking labor ...

s are currently being debated in developed countries, with implications in recent industrial disasters such as the Bangladesh factory collapses. Professor Doug Miller of Northumbria University, UK has proposed using Industrial Engineering techniques to determine living wages in his paper: https://ssrn.com/abstract=2212100

Payment systems A payment system is any system used to settle financial transactions through the transfer of monetary value. This includes the institutions, instruments, people, rules, procedures, standards, and technologies that make its exchange possible.Biago ...