SALARIES

AND
WAGES
EDMA
608

Rolyn V. Dr. Lorna

Presenter Professor
Manansala Acuavera
OVERVIEW

Significance of Wages

Theories of wages

Incentive Schemes
PARA KANINO
KA
BUMABANGO
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 SALARY AND
WAGES
income derived from human labor

monetary compensation paid by an employer to

an employee in exchange for work done
SALARY AND
WAGES
IMPORTANC
E OF
salary/
WAGES
INCOME
Wages from work pay for essentials,
such as rent, loan/debts, food and utility
bills. Workers who earn high wages can
afford more expensive lifestyles than
those who earn a lower wage.
RETENTION

Employees who earn a reasonable

wage are more likely to feel valued
by an employer, which means that
wages also contribute to workplace
morale.
SPENDING POWER
This refers not only to the money
workers earn that they spend on
necessities, but also the money they
save or use in the short term for
consumer goods, recreation, travel and
investing.
 TAXES
The more workers earn, the higher their taxable
income and tax rate. Unemployed taxpayers must
claim their unemployment benefits as income, but the
limits on unemployment benefits mean that
unemployed individuals pay less in state and federal
taxes than those who earn a steady wage. Higher
wages, as occur in competitive industries where
workers are in high demand, boost government
revenue and provide more funding for services and
new projects.
HEALTH AND WELL-BEING
Insufficient wages can lead to stress,
poor mental and physical health, and an
overall reduced quality of life. On the
other hand, fair wages can improve
workers' well-being, leading to
healthier, happier individuals.
theories of
WAGES
Theory # 1. The Subsistence
Theory
• According to them wages would be equal to the
amount just sufficient for subsistence

• wages are determined by the cost of production of

labor or subsistence level. The wages so determined
will remain fixed.
Theory # 2. Standard of Living
Theoryby the standard of
• wage is determined
living of the workers.
 Theory # 3. Wage Fund
Theory
• developed by J.S.Mill
• the employers set apart a certain amount of capital to
pay wages for laborers.
• Wage is determined by the amount of wages fund and
the total number of laborers.

• Wage rate=Wage fund / Number of laborers

Theory # 4. Residual Claimant
Theory
• propounded by Walker

• rent and interest are contractual payments

• After deducting rent and interest from total product, the

employer will deduct his profits. What remains after
deducting rent, interest and profits is wages. It is
possible to increase wages by increasing the total
product by improving the efficiency of the workers.
Theory # 5. Marginal Productivity
Theory:
• Marginal productivity theory of wages is an extension of marginal
productivity theory of distribution.

• According to this theory, wage for labor should be equal to the

value of the marginal product under conditions of perfect
competition.

• The difference in total production is the marginal productivity. The

employment of an additional unit of labor will result in increase in
output and cost. As long as MPP is greater than MFC, the employer
will employ additional units of labor. But he will stop employing
additional units of labor when MPP=MC.
Theory # 6. Discounted Marginal
Productivity Theory:
• the wage for labor is determined not by its marginal product but by
the discounted marginal product.

• laborers cannot get the entire amount of the marginal product

because production is a long drawn out process.

• As the laborers are poor and cannot wait till the product is sold,
they have to be supported by the employers. The employer does not
pay the full amount of the marginal product of labor. In order to
compensate the risk involved in giving advance to the workers, the
employer deducts a certain percentage from the final output.
incentiv
es
INCENTIVES
An incentive, monetary or otherwise, is
something that encourages people to do
something. It may be a bonus or a
reward to motivate people to work hard
towards achieving a certain goal.
Types of incentives:
Economic Incentives
• referring to the material and tangible benefits that pertain to cash
awards and such. These signify that the receiver of the incentive
has given exceptional results in a specified amount of time.

Social Incentives
• referring to the status and reputation of a particular employee, can
mean that the person hitting the targets will be receiving a
promotion or a change in hierarchal status.
Types of incentives:
Moral Incentives
• referring to the moral high ground one climbs onto when one sets
personal goals for themselves.
DepEd Public School Teacher Benefits and Incentive
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DepEd Public School Teacher Benefits and Incentive
references:
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