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Wage Incentive Schemes: Two extremes 1) Day work - worker is paid the same constant hourly rate (guaranteed

minimum wage - GMW, regardless of performance 2) Piecework (incentive with 100% participation) - worker is paid directly for each piece produced (i.e. directly proportional to performance). At first glance this appears to produce no benefit for the company. However, this is not true, since overhead is a constant and will decrease as it is normalized per unit production. Also note, that true piecework is not legal, as there is a guaranteed minimum wage ( in 1997 GMW =$5.25/hr) under U.S. law. This means that a worker will typically receive a base rate times the hours worked. Any benefits above standard performance, will then be paid directly to the worker. 3) Standard hour plan - daywork up to 100% performance, piecework (or a sharing plan) above 100% performance 4) Measured day work - A progressive record of a worker's performance is used determine base pay for the next pay period. Regardless of the person's performance during that period, that person will receive the new base rate. Ex. worker performance = actual output/expected output = 175/160 = 1.09 new base rate = base rate × 1.09 = $10.00 × 1.09 = $10.90 If the worker's performance deteriorates, the new base rate also drops. However, some companies will maintain a lower threshold (at least the GMW), below which the base rate can not drop. With this plan, day-to-day pressures are taken off the worker. However, the incentive is not as strong as for other plans, and it requires extra bookkeeping. 5) Group incentive schemes - Group output is measured and used to determine each group members pay. This is especially useful for work cells or situations where individual performance can't be easily measured (e.g. shipbuilding, construction, etc.). These schemes have advantages in allowing greater flexibility, reducing competition and encouraging group spirit. On the other hand, the individual incentive is reduced (lab groups?!) and better workers may become discouraged. Deterioration of Incentive Schemes: 1) changes in work requirements or methods not reflected in time standards 2) cheating by employees 3) poor measurement of performance 4) decrease in quality 5) plan costs more than it benefits 6) establishment of time standards that exceed standard practice (unfair standards) 7) MOST IMPORTANTLY - direct trade-off with an increase in CTD injuries Ex. 1 - Standard hour plan, base rate = $10.00/hr, worker performance = actual output / expected output Job A B C Hours worked 1 (60) 3 (180) 2 (120) Standard time (min) 1 4 3 Actual output 30 80 30 Hours Earned 30x1/60 = 0.5 80x4/60 = 5.34 30x3/60 = 1.5 Expected output 60 45 40 Performance 0.5/1=.5 5.34/3 =1.78 1.5/2 =.75

housing and educational allowances. TYPES OF FRINGE BENEFITS Organizations provide a variety of fringe benefits.4) × $10. leave for grievances. retiring rooms. Certain supplementary benefits and services known as “fringe benefits” are also available to them.5+2. overtime pay. leave travel pay. call-back pay. provident fund.34+1. The benefits provided by the employers in pursuance of agreements with workers may include dearness allowance. and gratuity. workmen’s compensation. Currently fringe benefits are a significant part of employee compensation system and the employees tend to take them for granted and do not link these items with wages or income as they do not have any direct bearing on payments. service awards.D 2 (120) 2 72 72x2/60 = 2. incentive for family planning. They are no more on the fringe of compensation but form an integral component of individual’s earnings involving spiraling costs for the company. Fringe benefits are also categorised as statutory. cost of living bonus. Statutory benefits include social security and medical care. holidays.00 = $97. heat allowance. Voluntary fringe benefits which are provided unilaterally by the company include group insurance. jobs to the sons/daughters of the employees and the like. These benefits are meant primarily to be of advantage to the employees. The fringe benefits are classified under four heads as given here under: 1. city compensatory allowance. and suggestion awards. 5. . insurance.4 60 2. leave for maternity. However. contractual.40 Fringe Benefits The remuneration that the employees receive for their contribution cannot be measured by the mere estimation of wages and salaries paid to them.4/2 =1. the fringe benefit system can become effective if attempts are made to gear them to the needs of human resource in organisational settings. lay-off. they are not provided as a substitute for wages or salaries of the employees. For Employment Security : Benefits under this head include unemployment. These benefits are distinctly additional to the regular wages paid to the workers. 3. death benevolent fund. The advantages accrued to the employees through the provision of fringe benefits are as such they cannot be secured through their own individual efforts.5+5. washing allowance. leave travel concession. Only those benefits fall within the purview of fringe benefits which are or can be expressed in cash terms. conveyance allowance. and voluntary. As such. medical allowance. leave encashment. night-shift allowance. 4.2 Total pay = (. transport. The characteristics of fringe benefits are: 1. technological adjustment pay. 2. unemployment compensation. level for negotiation. house rent allowance.

food cost subsidy. For Personnel Identification.2. 4. For Old Age and Retirement: Benefits under this category include: deferred income plans. shift premium. incentive bonus. Safety and Health . b) Extra Pay for time Worked: This category covers the benefits such as: premium pay. 3. Deewali or Pooja bonus. cooperative credit societies. life insurance. income tax aid. canteen. jobs to sons/daughters of the deceased employee and the like. old age counseling . unemployment compensation. Retrenchment Compensation: The Industrial Disputes Act. 1947 provides for the payment of compensation in case of lay-off and retrenchment. The benefit of confirmation of the employee on the job creates a sense of job security. sick leave. housing subsidy. etc. beauty parlor services. travel time etc. quality bonus. Workers are eligible for compensation as stated above even in case of closing down of undertakings. bargaining time. The non-seasonal industrial establishments employing 50 or more workers have to give one month’s notice or one month’s wages to all the workers who are retrenched after one year’s continuous service. traveling concession to retired employees. disability insurance. Christmas bonus. paid lunch periods. health insurance. recreational programs. medical benefits for retired employees. sick benefits. hospitalization. Lay-off Compensation: In case of lay-off. housing. stress counseling. The fringe benefits are categorized as follows: a) Payment for Time Not worked: Benefits under this category include: sick leave with pay. grievance time. Lay-off compensation can normally be paid up to 45 days in a year. Employee Security Physical and job security to the employee should also be provided with a view to promoting security to the employee and his family members. profit sharing. counseling. Participation and Stimulation: This category covers the following benefits: anniversary awards. old age assistance. The compensation is paid at the rate of 15 days wage for every completed year of service with a maximum of 45 days wage in a year. Further a minimum and continuous wage or salary gives a sense of security to the life. old age insurance. safety measures etc. paid rest and relief time. vacation pay. medical care. employees are entitled to lay-off compensation at the rate to 50% of the total of the basic wage and dearness allowance for the period of their lay-off except for weekly holidays. educational facilities. For Health Protection: Benefits under this head include accident insurance. attendance bonus. pension. gratuity. provident fund. recreation.

dust and fume. protection of eyes. gas etc. Precautions in case of fire. 67000. probation of employment of women and children near cotton openers. safety of buildings and machinery etc.Employee’s safety and health should be taken care of in order to protect the employee against accidents." 3. and spittoons. these orders are issued with the concurrence of the Comptroller and Auditor General of India.2006 as notified vide Section 11. Universities. 2008. protects the pay +DA already being drawn by them in their parent ofganisations.f. Semi. the Factories Act.98 referred to above.1.2006 on selection through interview by a properly constituted agency including Departmental Authorities making recruitment directly. In India. power to require specifications of defective parts of test of stability. striking gear and devices for cutting off power. work on or near machinery in motion. Public sector –wage fixation "In case of candidates working in Public Sector Undertakings. employment of young persons on dangerous machines. Further. The pay in the Pay Band fixed under this formulation will not exceed Rs. 1948. These provisions relate to cleanliness. over-crowding. Provisions relating to safety measures include fencing of machinery. the maximum of the Pay Band PB-4. explosive or inflammable dust. excessive weights. unhealthy working conditions and to protect worker’s capacity. their initial pay may be fixed by granting them the Grade Pay attached to the post. self-acting machines. 1. The conditions for admissibility of pay protection shall be the same as stipulated in this Department's OMS dated 7.1. 4. disposal of waste and effluents. lighting. Part A of First Schedule to CCS(RP) Rules. floors. artificial humidification. stipulated certain requirements regarding working conditions with a view to provide safe working environment.8.1. In so far as persons serving in the India Audit and Accounts Department are concerned.7. revolving machinery. drinking water.89 and 10. easing of new machinery. The pay in the Pay Band fixed under this formulation will not be fixed at a stage lower than Entry Pay in the Revised Pay Structure (corresponding to the Grade Pay applicable to the post) for direct recruits on or after 1. hoists and lifts. 5.e. who are appointed as direct recruits on or after 1. lifting machines. These orders will be applicable w. chains ropes and lifting tackles.2006 . precautions against dangerous fumes.Government Institutions or Autonomous Bodies. ventilation and temperature. their pay in the Pay Band may be fixed at a stage so that the pay in the Pay Band +Grade Pay and DA as admissible in the government. latrine urinals. pressure plant.