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MANAGEMENT THROUGH
WAGES AND INCENTIVES

Presented By:
Qaiser Iqbal Gondal
Assistant Manager (Civil) GSO
NTDC Islamabad
MANAGEMENT THROUGH WAGES AND INCENTIVES
MANAGEMENT THROUGH WAGES AND INCENTIVES

WAGES
Wages is the return
given to workers for
their mental and
physical efforts
which they put into
the production
process.
 MANAGEMENT THROUGH WAGES AND INCENTIVES

AN IDEAL WAGE-SYSTEM
 Guarantee of minimum wages

 Based on ability of the worker

 Simple

 Motivating

 Flexible

 Regular payment
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF WAGE
SYSTEM

 TIME WAGE
SYSTEM

 PIECE WAGE
SYSTEM
MANAGEMENT THROUGH WAGES AND INCENTIVES

TIME WAGE SYSTEM

In this system the workers are
paid wages according to the
time spent at the work place.
e.g. a day, a week. A month etc.
MANAGEMENT THROUGH WAGES AND INCENTIVES

TIME WAGE SYSTEM

In this system, the work or
production done by an employee
is not taken into consideration.
This is the oldest type of wage
system.
MANAGEMENT THROUGH WAGES AND INCENTIVES

TIME WAGE SYSTEM

MERITS AND DEMERITS

 MANAGEMENT THROUGH WAGES AND INCENTIVES

TIME WAGE SYSTEM

MERITS
 Clear and simple
 Provides guaranteed minimum wages
 Quality is maintained
 Wages payable are pre-determined
 Workers are motivated to work efficiently
 Reduces labor turnover rate
MANAGEMENT THROUGH WAGES AND INCENTIVES

TIME WAGE SYSTEM

DEMERITS
 Fails to motivate efficient and
industrious workers
 Work needs supervision
 Conflict and jealousy between
efficient and inefficient workers
 Cannot be considered a progressive
wage system
MANAGEMENT THROUGH WAGES AND INCENTIVES

PIECE WAGE SYSTEM

In this system, wages are paid to
workers according to their output.
This wage system is directly related
to the skill, production capacity,
speed and precision of the worker.
This system is also known as PAYMENT BY
RESULT SYSTEM.
MANAGEMENT THROUGH WAGES AND INCENTIVES

PIECE WAGE SYSTEM

MERITS
 Workers skill is taken into account.
 No need for supervision and
inspection.
 Efficient workers are given more
incentives and rewards.
 Easy to estimate the cost per unit

 Easy to calculate wages

MANAGEMENT THROUGH WAGES AND INCENTIVES

PIECE WAGE SYSTEM

DEMERITS
 Quality is not maintained
 Workers intentionally ignore safety
rules, inviting accidents
 Sense of job satisfaction is less
among workers
 Administrative expenses are high
 Workers feel a sense of insecurity
MANAGEMENT THROUGH WAGES AND INCENTIVES

INCENTIVES
MANAGEMENT THROUGH WAGES AND INCENTIVES

INCENTIVES
Get to know the
personal side of worker
Understand the workers
motivational behavior
Match peoples motives
with incentives they
value
MANAGEMENT THROUGH WAGES AND INCENTIVES

INCENTIVES
 Incentives create aptitude for work among
the workers, increasing their productivity.

 In the absence of incentives, frustration and

indifference of the workers leads to
inefficiency in the long run.
 MANAGEMENT THROUGH WAGES AND INCENTIVES

INCENTIVES

TYPES OF INCENTIVES

1. MONETARY INCENTIVE

2. NON-MONETARY
INCENTIVE
MANAGEMENT THROUGH WAGES AND INCENTIVES

MONETARY INCENTIVES
 Money is the main element of incentives.
It boosts the self-confidence of the workers.

 It provides the workers with economic

security and gives the worker a social
security.
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF MONETARY
INCENTIVES

 Profit-Sharing

 Co-Partnership
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF MONETARY
INCENTIVES

 Bonus

 Commission
 MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF MONETARY
INCENTIVES

 Prizes

 Promotion
MANAGEMENT THROUGH WAGES AND INCENTIVES

NON-MONETARY INCENTIVES

Incentives not based on money are non-

monetary incentives. Non-monetary
incentives are useful in increasing
production and efficiency.
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF NON-MONETARY
INCENTIVES

Security of
employment

Improvement of food
qualities
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF NON-
MONETARY
INCENTIVES

LETTER OF
APPRECIATION
MANAGEMENT THROUGH WAGES AND INCENTIVES

TYPES OF NON-MONETARY
INCENTIVES
Other incentives such as
housing facilities, life
insurance, education
and conveyance for
children etc.
MANAGEMENT THROUGH WAGES AND INCENTIVES

THE BOTTOM LINE

 To achieve organizational and individual
objectives, workers need to be motivated.
 The first component involves an
understanding of the motivational concept.
 The second component in a motivational
program is a high-performance working
culture.
 Workers have basic needs that influence
behavior and lead to goal attainment.
MANAGEMENT THROUGH WAGES AND INCENTIVES

MOTIVATIONAL TECHNIQUES
 Teach teamwork
 Empower
 Communicate
 Hear
 Notice
 Set standards
THANKS