Transcript Document

Wages in all forms of economic
organization is the main source of income of
the employee, the basis of material well-being
of his family members, it is the most effective
means of encouraging employees to high
performance and high quality work.
The transition to a market economy
are profoundly changing the content and
organization of all work to pay.
In economic theory there are two main
concepts to determine the nature of wages:
a)wage is the price of labor. Its size and
dynamics are influenced by market factors and
primarily supply and demand;
b) the salary - this is the monetary expression of
value of the commodity "labor" or "converted
form of the cost of goods the labor force." Its
value is determined by the conditions of
production and market factors - supply and
demand, which is under the influence of
deviation of wage labor costs.
It is also necessary to distinguish
between nominal and real wages. Nominal
wages or income is the total amount of
money received by the employee for his
expended labor, work done, services
rendered or hours worked. It is determined
by the current rate of wages or the cost of
labor per unit of time of work.
Real wages - is the amount of goods
and services that can be purchased at a
nominal salary.
Wages play a huge role in the
development of the state's economy, raising
living standards. It gets reflected broad
aspect of economic relations between society,
the workforce and workers about their
participation in social work and its payment.
Wages performs several functions.
Reproductive function is to provide
opportunities for the reproduction of labor
power socially normal level of consumption,
that is, determining that the absolute wage,
which allows for normal reproduction of the
conditions of labor, in other words,
maintaining and even improving the living
conditions of the employee, who must be
able to normally live (pay rent, food,
clothing, that is, the essentials), which
should be a real opportunity to take a break
from work to restore power required to
separated from reproduction, but is a
continuation and complement of the first.
Wages as a major source of income should
not only contribute to the reproduction of
labor power as such, but also give a person
to use a set of social goods - health care,
quality recreation, education, education of
children in preschool education, etc. And,
moreover, provide a comfortable existence
working in retirement.
Stimulating function is important from
the standpoint of the company's management: it is
necessary to encourage the worker to labor, to
maximize impact, increase efficiency. This is the
purpose of setting the amount of earnings,
depending on the progress made by each of the
results of labor. The separation of payment from
the individual work effort of employees undermines
the basis for labor wages, leads to weakening of
the incentive function of wages, to make it to the
consumption function and dampens initiative and
human rights efforts. The employee should be
interested in increasing their skills for greater
earnings, as higher qualifications higher pay.
Status function implies that the wage
status, defined by the amount of wages,
employment status of the employee.
Regulatory function - is the regulation
of the labor market and the profitability of the
firm. Of course, other things being equal, the
worker hires to work at a company where
people get paid more. But it is true, and more
- the company is unprofitable to pay too
much, otherwise its profitability decreases.
Businesses hire workers, and employees offer
their labor in the labor market. Like any
market, the labor market has laws formation
of prices for labor.
With the organization of wages in the
enterprise due to the solution of the
following tasks:
- To guarantee wages to each employee in
accordance with the results of his labor and
labor costs in the labor market;
- To provide to the employer in the
manufacturing process to achieve this result,
which would allow him (after the sale of
products on the market of goods) to
reimburse costs and profit.
The economic purpose of wages -
to ensure the conditions of human life. The
more so that higher wages may have a
beneficial effect on the economy as a whole,
ensuring a high demand for goods and
Thus, the main requirements for the
organization of wages in the enterprise
responsible, as the interests of the employee
and the interests of the employer, is:
1) Providing the necessary wage growth;
2) By reducing its unit costs;
3) Guarantee pay increases for each
employee on the growth performance of the
enterprise as a whole.
Level of pay depends on many
factors. First of all, this is - the economic
condition of the organization, the overall
socio-economic situation in the country and
the region, supply and demand in the labor
market, the state of the consumer market,
the dynamics of consumer prices for goods
and services, etc.
Other definitions of wages:
• the price of labor involved in the production
• expressed in monetary terms of the gross
national product originating in private
consumption of workers in accordance with
the quality and quantity of labor expended.
• the costs of production and sales, is
earmarked for salaries of employees.
The tariff system is the set of
standards, with the aid of which the
differentiation of wages of workers in
different categories depending on: the
complexity of the job, working conditions,
climatic conditions, the intensity of work,
nature of work.
piecework and time-based.
- a form of
compensation of employees, in which
earnings depend on the number of units
produced them or the amount of work
performed in accordance with their quality,
complexity, and working conditions.
The most appropriate use piecework
under the following conditions:
• The need for increasing the volume of
• the availability of quantitative performance
indicators that are directly dependent on the
• The need to stimulate this part of the
employee to a further increase in workload;
• to increase the volume of work without
compromising quality.
When using piece rates there is a
• reducing the quality of products;
• deterioration of equipment maintenance
and as a result of premature equipment
• violations of the process;
• violations of safety requirements;
• raw materials and cost overruns.