| Fixation of compensation or wage rates for | | | | should be related to skill job requirements of job. |
| different categories of employees in a company is | | | | Due consideration should be given to such factors |
| an important task of management. The | | | | as skill, length of time required in learning, |
| employees are not only concerned with the | | | | versatility required and working conditions. In all |
| wages received but also concerned with the level | | | | fairness to management, the plan should usually |
| wages received by same level of employees in | | | | result in a reduction of unit cost of manufacture, |
| similar organizations. Hence wage structure may | | | | making possible lower prices and higher profits.In |
| be considered very important. The relative | | | | all fairness to the consumers a share of higher |
| wage-rules must be fixed carefully, because they | | | | efficiency should be passed on to them by way |
| have implications for promotion, transfer, seniority | | | | of lower price. This will be possible when there is |
| and other important personnel matters.Wage plan | | | | reduction in cost due to higher efficiency. Thus |
| should possess certain fundamental characteristics | | | | the wage plan must ensure that all participate |
| if the long term interests of the worker, | | | | share the gains of higher productivity. The wage |
| management and the consumer are to be served. | | | | plan should include an incentive system for the |
| The wage plan must be linked with the | | | | efficient workers. The system should ensure |
| productivity of the workers. Unless higher pay | | | | higher pay to the workers who perform work at |
| scales of workers are linked in some way to the | | | | higher level of efficiency. The wage plan should |
| productivity of workers, a wage plan will not be | | | | guarantee minimum wage to protect the interest |
| fair either to the management or to the | | | | of workers against conditions over which they |
| consumers.Basic wage for each job classification | | | | have no control. |