METHODS OF

REMUNERATING
LABOUR
INTRODUCTION

Higher wages motivate

employees to work harder.
Do you agree?
 The employees working in any
organization are compensated by way of
salaries and other benefits in return of
services rendered.
 According to Minimum Wages Act, 1948,
wages means all remuneration capable of
being expressed in terms of money, which
would, if the terms of the contract of
employment, express or implied, were
fulfilled, be payable to a person employed
in respect of this employment of work
done in such employment.
DIFFERENCE BETWEEN
REMUNERATION AND INCENTIVE
 Remuneration :
(1) It is the salaries and statutory(permitted)
benefits put together.
(2) It is always individual based.

 Incentive :
(1) Payments and benefits given to stimulate
better performance or paid in return for a
better performance.
(2) It could be in monetary as well as non-
monetary base.
(3) It could be based on group performance.
WHAT ARE THE FACTORS
INFLUENCING WAGE RATE?
 Following are the factors which influence the
wage rate:
 Prevailing market rates: No enterprise can
ignore prevailing or comparative wage rates. The
wage rates paid in the industry or other concerns
at the same place will form a base for fixing wage
rates.
 Ability to pay: The ability to pay of an enterprise
will influence wage rates to be paid. If the
concern is running into losses then it may not be
able to pay higher wage rate. A profitable concern
may pay more to attract good workers.
 Bargaining of trade unions: The wage rate
are also influenced by the bargaining
power of trade unions. Stronger the trade
union higher will be the wage rates.
 Demand and Supply: When the demand
for a particular type of labour is more and
supply is less then the wages will be more.
On the other hand, if supply of labour is
more and demand on other hand is less
than persons will be available at lower
wage rate.