National Commission on Labour (1967)||
17.0 The systems of remuneration for work in industry are, in the main, variants or combinations of two fundamental arrangements: payment by time and payment by output. Under the former, a worker is paid a pre-deter-mined amount for a specified unit of time. which may be an how, a day, a week or a month; yearly payments are not common in industry. So long as he is engaged on tasks specified by his employer, there is no direct control on the amount of work done by him except through supervision. In the latter arrangement, the worker is paid his dues according to his output, or the output of the group to which he belongs. This relationship may be simple when the remuneration is for a straight piece work, i.e., a uniform rate per unit of work work/output. It may assume complex forms as in the case of "differential piece work" wherein rates of remuneration per unit of output may be either progressive or regressive. Long-term collective systems relating wages to costs, standard production, sales or profits are other variants of payment by results. There ale also other types of remuneration that are not directly dependent on production, like bonuses for regular attendance, length of service, quality of production and elimination of waste, all constituting an area of wage incentives.
17.1 There are advantages in Incentive payments. They serve a double purpose, viz., (i) to increase the earnings of the workers and (ii) to improve the efficiency of the unit, thereby lowering costs. If properly worked, they could have an effect on prices in a manner which will benefit the community. On the debit side, the use of a system of payment by results accentuates the differences between the management and unions. While incentives provide additional remuneration for workers as production proceeds from day to day, another mode of such payment has come in vogue which may depend upon the total output of the unit as also on the state of the market, viz., payment of bonus. We propose to discuss in this Chapter some of the incentive schemes which prevail in this country and the manner of their introduction/implementation. In the later portion, we review the system of bonus payments.