Disadvantages of the time-based bonus payment system. Advantages and disadvantages of forms of remuneration

Now as in Russian Federation, and throughout the world, one of the most common forms and methods of calculating wages is the time-based wage system. Its benefits provide employers maximum amount organization opportunities effective management personnel and make it possible to use this system in an almost unlimited range of industries and types of work performed. At the same time, it can combine other methods of remuneration, for example, in the format of a time-based bonus system.

What is a time-based wage system and the norms of the Labor Code of the Russian Federation

As can be understood from the very name of such a payroll system, a time-based wage system is a method of calculating wages to employees in direct correlation with the time they actually worked. Such a system involves the use of a wide variety of working time tracking mechanisms. It is applied, first of all, in relation to positions in which the use of payment will demonstrate insufficient effectiveness or cannot be implemented at all due to the specifics job responsibilities worker. However, in practice, the range of application of time-based wages covers many areas of labor activity.

Legal regulation of the time-based payment system presupposes that the employer has fairly broad powers in establishing certain terms of work and mechanisms for crediting wages. At the same time, there are simply no clear standards that could fix strict limits for the application of the above principles and mechanisms for issuing wages. However, when installing a time-based wage system, the employer should in any case pay attention to the following articles of the Labor Code of the Russian Federation:

Art.91. Establishes the concept of working time, which is subsequently used in most aspects of setting time wages. So, for time payment in to the fullest All general labor restrictions relating to issues of workers' working time apply.
Article 100. It regulates the procedure for recording working hours. Exactly work time, spent by an employee is the main quantitative indicator used in calculations in the case of using a time-based wage system.
Article 135. Its standards regulate the principles of setting wages in general and provide for the ability of the employer to independently regulate the mechanisms and applied remuneration systems.

Directly, the standards of the Labor Code of the Russian Federation consider the concept of time-based wages only indirectly, however, it is subject to all mandatory requirements for ensuring guarantees and rights of workers. These include:

Limitation of working hours and the right to rest. A standard workweek cannot include more than 40 hours of work, regardless of the working time recording system and the wishes of the employee. For work beyond these guidelines, the employer will in most cases be required to pay overtime.
Minimum wage. As part of the use of a time-based wage system, the employer is obliged to ensure that the employee complies with the statutory standards for calculating wages not lower than the federal or regional minimum. However, in the context of time-based pay, the minimum may be reduced if the employee's hours worked in terms of weeks of work are less than 40 hours.
Vacations and other guarantees are fully provided to employees on a time-based wage system, as well as on a piece-rate wage system or other payroll methods used.

The duration limitation does not apply or is applied conditionally for some categories of activity, for example, for rotational work. In addition, individual regulations may establish reduced standards for the length of the working week or working day.

In general, the time system itself is almost always considered standard with appropriate legal regulation. However, certain principles of time-based remuneration can also be applied when using other systems implemented in the organization, combining with them and complementing them. Such a combination can significantly increase the overall flexibility of the business and provide the manager with additional tools for implementing effective personnel policies and ensuring high level staff work.

Types of time wage systems

Basically, the following types of time-based wage system are distinguished:

Direct or simple time wages. This system is considered the simplest among all possible time payment systems. It provides for a direct correlation of time worked with the level of wages. Wages are calculated at a tariff rate in strict accordance with hours worked. This system is extremely simple in the application of accounting and does not require any additional human resources for its implementation in addition to the grid of tariff rates and time sheets.
Time-based bonus system of remuneration. Features of the time-bonus wage system suggest the presence of additional stimulating factors that can increase general level the employee’s earnings depending on the fulfillment of the requirements determined by the bonus procedure. They may concern both compliance with or exceeding production standards, as well as the employee’s long service or other aspects of his activity that require effective rewards. This system is devoid of many negative features; it is simple, but it also requires great effort to assess the quality of the employee’s work and preliminary documentary preparatory actions.
Time-based piecework wages. This payment mechanism is also called a mixed system and includes the application of both piecework and time-based wage standards to the employee. In particular, the introduction of such a mechanism is often practiced in production in case of forced downtime, or it can be applied to workers whose positions involve not only the fulfillment of certain quantitative performance indicators, but also the conduct of activities that are difficult to quantify.
Salary system of remuneration. It involves establishing not hourly standards for the employee to pay for work time, but providing a certain monthly salary, the amount and size of which are directly equated to the number of hours actually worked by the worker. That is, payment is calculated based on the results of the month or other terms of payment of wages and, if the employee fulfills all working time standards, is provided in full. Otherwise, a percentage change is made depending on the time the worker is absent from the workplace and released from work duties.

A time wage system may also have various shapes working time recording. In particular, the most common is the hourly wage system. However, in many modern enterprises that are equipped with specialized access equipment, it is also possible to use more accurate minute-by-minute or even second-by-second systems for calculating the duration of workers’ presence at the workplace. In other situations, weekly or monthly payment may be applied without careful consideration of the time actually spent at the workplace.

Advantages and disadvantages of a time-based wage system

In general, the advantages of time-based wages include:

Stability of workers' earnings. Employees on a time-based payment system are confident that they will receive their earnings in the expected amount and regardless of additional negative factors, such as breakdown or wear and tear of equipment, bad feeling or other extraneous problems.
Low staff turnover. Statistics show that employees working on a time-based wage system are much less likely to change jobs compared to piece workers, since they expect a long career and the possibility of promotion in order to increase pay, while piece workers are quite simply increase your own production.
Efficiency in the face of the complexity of labor regulation. In some cases, piecework payment cannot be applied simply because it is impossible to effectively and adequately calculate the volume of goods produced or services rendered. This may be due both to the excessive complexity and high cost of such calculations, and to the very nature of the worker’s work, which does not involve the use of quantitative indicators for evaluation. However, time payment may apply to most existing species work, while piecework has many limitations.
Lack of negative motivation. Working as a team on a time-based payment system is much more effective than on a piece-rate system, since the main way for workers to increase their salaries is in this case lies in directly bringing benefit to the organization, which is much better done in cooperation with other employees than in increasing personal performance.
Ease of accounting and maintaining personnel policies. Compared to piece-rate payment systems, time-based payment systems also have much greater simplicity in maintaining records and documents, as well as calculating wages in general. This reduces the burden on the enterprise’s accounting department, and also avoids additional costs associated with the implementation of accounting systems and assessment of production or other indicators of workers.

The disadvantages of time payment in this way include the following features:

Low level of motivation. Due to the fact that employees receive payment depending on the time spent at the workplace, their work efficiency decreases since, regardless of the efforts made, they will receive the same income. To a certain extent, the use of piecework-time wages or the bonus nature of wage calculations helps to neutralize the risks of this shortcoming.
High collective responsibility with low labor justice. An extremely common phenomenon in the case of time-based wages is a significant difference in the effort put into work between employees. Thus, some employees may end up doing the work of several others, while the latter neglect their job duties. But wages are in accordance with the principles of application temporary labor in the end they will have the same one.
Inefficiency due to high staff turnover, the production nature of the activity and low requirements for the qualifications of workers.
In particular, if there is no shortage of personnel, and the activities of the majority of workers can be easily and without unnecessary costs assessed, a piece-rate wage system can be much more justified than a time-based wage system, taking into account its risks. Low level of efficiency in case of emergency or urgent need.
With a piece-rate wage system, it is possible to use the progressive nature of payment to solve important problems that arise, while with time-based wages, motivating workers to achieve urgent goals is quite difficult. High risks. Regardless of the practical state of the organization, the piecework system of remuneration, and, in particular, the salary system, imposes on the employer the obligation to provide for workers wages

Taking into account the above features of the time-based system, the employer and HR specialists should always remember that it can be used in conjunction with other options for ensuring payment of workers and can be combined between them. The employer may establish different mechanisms and payment methods for different categories of employees.

The process of implementing and processing time-based wages

To use time-based wages, the employer should first of all establish in local regulations the procedure for tariff rates and employee evaluation, as well as mechanisms for recording working time. This information must also be recorded in the employment contract with a specific employee and with all employees of individual business units. At the same time, information about time payment should always be available to the worker.

It is allowed to change the principles of remuneration and transfer workers from a piece-rate system to a time-based system. To do this, changes must be made to the individual employment contract with the employee in the format of an additional agreement on time payment. This will avoid unnecessary risks.

The trend towards reducing the use of piecework wages is noticed all over the world, since time-based payment is a more progressive and socially effective technique.

In general, given the fact that time payment is one of the most widespread in the world, its use is good choice for most situations in which piecework will not perform well. In particular, for non-productive positions, managers, accountants and other workers of a similar nature, it is optimal.

However, time wages can also work well in cases where they are assigned to employees engaged in production. This can reduce the volume of defects and the rate of equipment wear, and by reducing the psychological burden on workers, it may not even affect the overall production volumes.

For some positions, especially those related to repairs or eliminating the consequences of negative situations, the use of a time-based payment system is much more justified than the use of piecework mechanisms.

L.A. Maslennikova
expert of the Russian Tax Courier magazine, Ph.D. econ. sciences

Main types of remuneration systems

There are two main types of wage systems: time-based and piece-rate. This means that wages can depend either on the time worked or on the results obtained. Therefore, almost all remuneration systems to some extent relate to either time-based or piecework.

Time-based wage system

This is the most common wage system. It is used in almost any industry. With time-based wages, wages are calculated in proportion to the time worked, regardless of the results of work. Special tariffs are established for employees (salaries, daily and hourly tariff rates). Calculating wages with a time-based wage system is quite simple. A time sheet is sufficient for this. It is maintained according to the unified form No. T-13, approved by Decree of the State Statistics Committee of Russia dated January 5, 2004 No. 1.

EXAMPLE 1

Employee A.A. Ivanov has a time-based wage system. His daily tariff rate is 1000 rubles. In January 2006, this employee actually worked 16 days. Let's calculate his salary for January 2006:

1000 rub. x 16 days = 16,000 rub.

A type of time-based wage system is time-bonus system. In this case, the workers' salary consists of two parts. The first part is the salary or the product of the daily (hourly) tariff rate by the time worked. The second part consists of a bonus for achieving certain results in work.

Bonuses are accrued monthly in the form of a fixed amount or a percentage of the salary or tariff rate. The amounts of bonuses are set by the immediate supervisors of employees for whom a time-based bonus payment system has been adopted.

This remuneration system can, in principle, be applied to any employee. True, it most likely will not be suitable for top managers.

In addition, it is sometimes used time-bonus wage system with standardized tasks. The bonus here is paid for meeting certain production standards.

Piece wage system

The piecework wage system is used for those employees whose work results can be actually calculated. These are mainly workers involved in production. Moreover, we are talking not only about workers at the machine, but also about intellectual workers, for example, editors in a publishing house. In the latter case, the final products will be literary works (books, articles, etc.) prepared for publication, the volume of which can be easily calculated. And a certain number of edited copyright marks or copyright sheets can be accepted as a unit of production.

An organization that has decided to establish a piece-rate wage system must develop piece-rate rates for each type of product produced for all stages of production. Next, wages are calculated as follows. At the end of the month, information about the products produced by each employee, whose work is paid by the piece, is transmitted to the accounting department. The quantity of products is multiplied by the corresponding piece rates.

EXAMPLE 2

Alpha LLC produces two types of parts - A and B. The production of part A includes three stages, that is, it is made by three workers on different machines. To produce part B, two stages are sufficient.

In such a situation, prices must be established for all stages of production of each part. Therefore, to calculate wages for production workers at Alpha LLC, it is necessary to establish three piece rates for each stage of production of part A and two piece rates for the production of part B.

Let's say Alpha LLC has set the following piece rates for part A: at the first stage of production - 50 rubles/piece, at the second - 52 rubles/piece. and on the third - 51 rub./piece.

Let's calculate the salary of the worker processing part A at the first stage of production. In February 2006, the employee produced 400 parts. The payment amount was:

50 rub./pcs. x 400 pcs. = 20,000 rub.

As with the time-based wage system, the piece-rate system can also have a bonus component. At piece-bonus wage system In addition to the basic salary, workers also receive a bonus for producing a certain amount of products. The bonus amount can be fixed or depend, like the basic salary, on output.

In addition, there is a standard piecework-bonus wage system. It is usually used to pay auxiliary workers organized in complex teams. A tariff salary is paid to the team for performing a certain amount of work, and a bonus is awarded for achieving any quality indicators.

Options for the piecework wage system can also be piecework-progressive, indirect piecework and piecework wages.

At piecework-progressive wages Piece prices for each unit of production depend on the total quantity of products produced.

BY THE WAY
Addictive effect
Human resource management specialists in the course of their research came to the following conclusion. It turns out that any changes in the remuneration system in order to increase its efficiency, including those related to increasing the level of wages, may become ineffective. And quite quickly. The fact is that after two months the effect of habituation to income begins to take effect. So managers should probably take this fact into account when making decisions about choosing a remuneration system.

For example, if an employee makes 200 parts per month, they will be paid at the rate of 68 rubles. for a unit. For parts from 201 to 300, piece rates will increase to 73 rubles, and from part 301 - to 79 rubles.

Indirect piecework wages provides percentage bonuses to employee salaries, tied to the salary of employees whose work is paid on a piece-rate basis. Indirect piecework wages are used mainly for workers in service industries. This means that the better the service industries work, the greater the output of the main production will be, and the wages will increase for workers in both industries.

Chord payment is entered for groups of workers, for example a department, a team. In this case, piece rates are set not for each employee, but for a group performing one task. The accrued salary for a completed task is distributed among employees taking into account the time worked by each of them. The direct contribution of each employee is not taken into account.

Other remuneration systems

As already mentioned, all wage systems are based on either a time-based or piece-rate system. However, each system has its own characteristics. Let's look at them.

Bonus wage system

This remuneration system is similar to the time-based bonus system. Wages under the bonus system also consist of two parts: salary and bonus. However, the amount of the bonus (in percentage) for each employee must be clearly defined. It depends on the revenue received directly by the employee, the total income or profit of the organization.

The bonus remuneration system is used, for example, for workers in trade or the service sector. In other words, for those on whose work the income or profit of the organization directly depends.

EXAMPLE 3

For the RV seller Zakharova has established a bonus wage system. Her salary is 4,000 rubles, and her bonus is 5% of the monthly revenue received from customers.

Let's calculate R.V.'s salary. Zakharova for February 2006, provided that the month was fully worked, and the revenue she received was 175,000 rubles.

Since R.V. Zakharova worked all working days as scheduled in February, she is entitled to a full salary - 4,000 rubles.

Let's calculate the bonus amount:

175,000 rub. x 5% = 8750 rub.

Consequently, for February 2006 R.V. Zakharova should receive the following salary:

4000 rub. + 8750 rub. = 12,750 rub.

Commission-based remuneration system

This remuneration system is close to a bonus one. But in a commission-based wage system, the salary consists of one part: employees receive only a certain percentage of the income or profit they bring to the organization.

Such a remuneration system can be used, for example, for workers engaged in delivery or distribution trade, when the time worked cannot be verified.

As a safety net in a commission-based wage system, so-called minimum wages are sometimes used. They will be received by employees whose salary, calculated using a set percentage, will be less than the minimum wage.

EXAMPLE 4

For the seller M.I. Sidorov, who is engaged in delivery trade, has established a system of remuneration on a commission basis. The employee is paid 20% of the income received with his participation by the organization.

M.I. Sidorov has a minimum salary of 10,000 rubles.

In February 2006, the organization’s income from M.I. Sidorov activities amounted to 150,000 rubles. Let's calculate the salary of M.I. Sidorov for February 2006:

150,000 rub. x 20% = 30,000 rub.

As you can see, this amount exceeds the minimum wage.

Tariff-free wage system

With a tariff-free wage system, calculating workers' wages is quite difficult. After all, there are no salaries or set bonuses. Only the total wage fund is determined for all employees of the department or even the organization as a whole (if a tariff-free system is adopted for the department or the entire organization, respectively). Then the labor participation coefficient is established for each employee. Next, the wage fund must be divided by the sum of the labor participation coefficients and multiplied by the labor participation coefficient of the employee whose salary is being calculated.

A tariff-free wage system can be adopted for a team where all employees perform similar functions and the participation rate of each can be established.

EXAMPLE 5

For the marketing department, which employs three people (N.M. Ivanov, A.L. Alekseev and T.O. Sergeev), a tariff-free wage system has been adopted. As of February 2006, this department has a payroll fund of 50,000 rubles. and labor participation rates for each employee:

N.M. Ivanova - 1.15;

A.L. Alekseeva - 1.3;

THAT. Sergeeva - 1.25.

Let's calculate the salary for February 2006 of N.M. Ivanova.

Let us determine the sum of the coefficients of labor participation of workers:

1,15 + 1,3 + 1,25 = 3,7.

The salary of N.M. Ivanova is defined as follows:

50,000 rub. : 3.7 x 1.15 = 15,540.54 rubles.

Remuneration system with group bonuses

The remuneration system with group bonuses is very similar to the non-tariff system. The difference is that workers' wages here consist of two parts: salary and bonus. The salary is determined for each employee in accordance with the employment contract. But the bonus is determined similarly to wages under a non-tariff wage system.

The total amount of bonuses is established either for a department or for a group of employees involved in one project. Next, the share of employment of each employee in this project is determined. After this, the amounts of bonuses for all project participants are directly calculated. To calculate the bonus of each employee, the same formula is used as in calculating wages under a non-tariff wage system.

Remuneration system with bonuses for knowledge and competence

This remuneration system is similar to the time-based bonus system. However, bonuses in this case are awarded not for the results achieved in work, but for the skills or knowledge acquired. That is, the higher the qualifications or education level of the employee, the larger the bonus he will receive. Of course, the last statement is true if the education and qualifications of the specialist correspond to the position held and the nature of the work.

Combined wage systems

An organization can develop a remuneration system on its own. To do this, it is not necessary to invent something fundamentally new. It is enough to combine existing remuneration systems in a way that is convenient and beneficial for the organization.

For example, an employee’s salary can be calculated in accordance with a time-based wage system, and piece-rate and progressive and bonus systems are used to determine the amount of the bonus. This means that the premium will be set as a percentage, say, of the revenue received. Interest, in turn, may vary depending on the amount of revenue. For a higher range, the percentage will be higher accordingly.

Or, on the contrary, it is possible to use a regressive percentage, that is, the more revenue, the lower the percentage.

Choosing the optimal wage system

Each organization chooses a remuneration system based on its needs. However, there are several rules that are useful to any company. Typically, a remuneration system is chosen before the activity begins. If the company is already operating, and the previously established wage system is ineffective, it can be changed.

So, the choice of a remuneration system can be divided into the following stages.

1. Created working group, which will evaluate the effectiveness of various remuneration systems for different categories of workers. This avoids subjective opinions, unlike the situation when the assessment is made by a single specialist.

2. The organization’s personnel are distributed into groups for which a remuneration system is established.

A choice must be made: either the organization will use a single remuneration system, or different systems will be installed for different categories of employees.

If the second option is chosen, all employees of the organization need to be divided into groups. The principle of division is as follows: employees who have the same impact on the results of the organization or on the success of other specialists fall into one group.

You can take a simpler path and consider personnel not by special groups, but by departments and divisions, if possible.

3. The area of responsibility of each group of personnel is determined.

Table. Advantages and disadvantages existing systems wages

Remuneration system		Advantages	Flaws
Time-based		Easy payroll calculation, sufficient tariff rates and information on hours worked	Salary does not depend on performance results
Time-based bonus		Easy to calculate; when distributing bonuses, work results can be taken into account	Bonuses do not always depend on performance results. Bonuses are distributed by the manager, and therefore there is a possibility of subjective assessment
Piecework		The amount of wages clearly depends on the quantity of products produced; there is an obvious interest of workers in increasing labor productivity	The quality of the products produced is not taken into account, only the quantity
Piece-bonus	For employees whose work results can be assessed in physical terms	The same as the piecework wage system. In addition, if bonuses are set for product quality, the employee is interested in producing more products without compromising its quality	The same as the piecework wage system, provided that bonuses are not related to the quality of the products produced
Bonus	For employees on whom the level of profit or income of the organization directly depends	Employees are directly interested in increasing the organization's revenue or profit	The growth of revenue and profit does not always directly depend on the employee
Remuneration on a commission basis	For employees on whom the organization’s income directly depends		The same as for the non-tariff wage system. Specialists will be more willing to participate in a new project and help each other to complete it as quickly as possible	The same as for the non-tariff wage system
Remuneration with bonuses for knowledge and competence	For specialists whose work requires special knowledge, skills and a high level of professionalism	Specialists are financially interested in improving their professional level	Competence and knowledge do not always coincide with effective work

At this stage, the organization’s management needs to decide the following question: what indicators - expenses, revenue, profit, etc. - can each group of personnel be responsible for. In other words, you need to understand whether the work of personnel can change the amount of expenses, revenues or profits of the organization. If personnel are not directly responsible for the financial results of the organization, then special indicators of responsibility can be introduced for this group. For example, the finance department may be responsible for reducing accounts receivable, the legal department may be responsible for improving the balance of fines received and paid, etc.

4. Depending on the area of responsibility, the organization selects several acceptable remuneration systems for each group.

For example, if personnel may be responsible for the volume of revenue or income, the possibility of using a remuneration system on a commission basis or a bonus system, etc. is assessed. For groups that have special indicators, it is possible to offer remuneration systems with a bonus for achieving a certain level of these indicators .

5. The quality indicators of each of the selected remuneration systems are assessed.

For example, how it will be more convenient for an accountant to calculate wages or under what system of remuneration for employees it will be clearer on what the amount of payments depends.

6. The remuneration systems selected for each group of employees are assessed on a five-point scale.

Each remuneration system is analyzed from the point of view of compliance with the specifics of the work, sphere of influence and quality indicators.

7. Remuneration systems with maximum ratings are selected.

If any remuneration system provides for the same assessments, then the head of the department or division must make a decision: under which system personnel management will be most effective.

8. The selected remuneration systems for each group of personnel are recorded in special documents: regulations, labor or collective agreements. Note that each employee must be familiarized with the remuneration system chosen for him.

Let's try to choose a remuneration system for a small organization.

As you know, wages are an integral part labor relations employee and employer. At all times, the question has arisen about how to pay for labor most effectively. There are two basic types of payroll: time-based and piece-rate. Each of them has its pros and cons. However, in our country, time-based wages are most common, so you need to know about all the nuances and aspects of its calculation.

In what cases is it used?

This type of payment is used when it is impossible to determine the amount of work performed by an employee. Time payment labor - remuneration for hours actually worked in the reporting period. In addition to time, the qualifications of the employee and his working conditions are of decisive importance in this aspect.

Accrual for ordinary workers is based on the tariff rate, and for managers it is realized in the form of an official salary. Calculation of time wages is carried out on the basis of a time sheet. It displays the days and hours worked by a particular employee, taking into account those that he missed. This system is quite rare in this form; its branches are more common. We'll talk about this below.

The legislative framework

According to the regulations of our country, wages must consist of several components. These include a certain salary, bonus, bonus for qualifications, additional payment for seniority, as well as other payments, established by law. In the Labor Code, namely in Art. 133 it is indicated that a person who has worked monthly norm time and who has coped with the volume of work, has the right to receive wages, the amount of which cannot be less than the minimum.

It is worth noting that the cost of living and other limits are set by the state throughout the territory. However, the threshold may differ in specific regions.

The time wage system allows compliance with certain documents. These include a general labor contract, acts that apply in a specific organization, as well as an agreement with a trade union. This body protects the interests of the employee and monitors the implementation of his rights.

Classification

As already noted, the time-based form of remuneration in pure form is extremely rare. In most cases, its varieties are used, which are regulated Labor Code our country.

The following types are distinguished this method payroll:

simple;
premium-time;
time-based salary;
piecework-time;
time-normative.

Each of them has certain characteristics. To better understand how wages are calculated, you should consider all types separately.

Simple

In this case, the name speaks for itself. This form of payroll differs as follows:

payment is made in accordance with the tariff rate;
to calculate specific earnings, months, days and even hours can be used as a time period;
formula for determining the final salary:

Zp = Vf x Tf, where:

Salary - remuneration (total);

Vf - time that was actually worked by the employee;

Tf - tariff rate.

This formula is very often used in practice, as it is simple and quite effective. Let's consider the calculation of simple time-based wages for specific example. The employee was set at a rate of 200 rubles per hour. At the end of the month, he worked 100 hours. Using simple mathematical calculations, we get the result: Salary = 200 * 100 = 20,000 rubles.

Premium time wages

This form is already more advanced than the previous one. Here, the calculation takes into account not only the tariff rate and the actual time worked, but also the quality of the work performed. In case of a job well done, the employee is awarded a bonus. It is added to the simple wage formula.

In other words, the final salary consists of a salary and a bonus part. The latter depends solely on the employee himself, the quantity and quality of completed tasks. It is worth noting that time-based bonus wages are quite effective, since additional monetary reward motivates the employee to work efficiently and quickly.

Salary salary

This system has several features, including:

The monthly salary is fixed.
To receive money, the employee must work the number of hours specified in the employment contract.
The total amount does not depend on the number of days worked. The system is as follows: completed the volume - received wages, even if he exceeded the standard working hours.
The salary may change if you go on sick leave or required vacation. Also, the reason for the change may be absence without a good reason. It should be understood that payment will be made on the basis of salary and not tariff rate.

This type of time-based wages is quite rare due to its low level of efficiency. However, sometimes, depending on the specifics of the work, the salary can be seen at the enterprise.

Time-based piecework

In practice, such a system is often called mixed. The following nuances of this type of time payment are highlighted:

It is used in most cases trading enterprises. It's hard to find more effective method payment for direct sales.
This system is also perfect for those organizations that use a shift work schedule. For example, during the day, payment depends on the volume completed, and at night there is a premium for overtime work.
The calculation is made by adding a certain percentage of the amount of products sold to the basic salary.

Currently, the piece-rate wage system is very popular. It is especially actively used in enterprises whose specific focus is sales. This system simultaneously motivates employees to make more profit and brings benefits to the enterprise from the products sold.

Hourly payment

This form of payroll is also widely used. Its essence lies in the fact that in addition to a certain amount per hour, the employee receives additional money for fulfilling the plan. Speaking about motivation, it can be noted that much attention is paid to it in this system.

Wages for time-based wages, as we have found out, depend on many factors. The first place here comes to the definition of the type of accrual, and, based on this, the calculation is carried out. The employer must carefully analyze and decide which form of remuneration is most appropriate in a particular situation. It should be borne in mind that an employee is, first of all, a person, and therefore wages should not be allowed to be too low. On the other hand, the employer needs to protect itself from payments simply for the employee’s presence in the workplace.

Payment must be made for some actions, contributions to the development of the enterprise. Therefore, you should seriously study this issue, and then opt for a more suitable form of payroll.

Effective use of time wages

Of course, each employer is in a different situation and must select a payment system individually. However, in general view There are several moments when the time-based form will be most effective:

increasing employee motivation;
establishment work discipline In the organisation;
encouragement to improve qualifications;
in the case of technical work for production purposes;
if the organization uses a conveyor type of production;
when what comes first is not the quantity of goods produced, but its quality.

In specific situations, you need to look and evaluate the effectiveness in individually. At one enterprise this form of payroll will take root well, but at another it will break the system. There are many examples of time-based wages. Take any trade organizations involved in the sale of products. In almost all cases, wages depend on how many goods were sold. This allows you to stimulate employees and make profit for the company.

Reflection in the employment contract

In practice, this agreement is not given due attention. The employee needs to know that the employment contract specifies all the rights and obligations of the parties. They should be carefully studied to avoid unpleasant situations.

A mandatory part of this agreement is the wage clause. If the employer has chosen a time-based wage system, then the tariff rate or salary must be indicated in the form of a certain amount or coefficient. Also, the employment contract includes everything due compensation and allowances.

The bonus portion is often indicated in internal regulatory documents, where specific conditions for receiving monetary remuneration are prescribed. The time-based system is best used to pay for work that is difficult to meet the standards. It is also recommended to use this form in the service industry. Namely, in those types of activities where exceeding the plan is not required.

The time-based wage system is the most common and effective. Currently used in most developed countries of the world.

Pros and cons of time-based form

Let's look at this question in detail. First, let's define the benefits for the employer. Among them are:

reduction of funds spent on product quality control;
reducing the turnover of qualified personnel, which makes it possible to save on training;
workers strive for cooperation, and this significantly increases labor productivity;
the employer pays for hours actually worked.

In addition, some advantages of this system also appear for employees:

receiving a stable regular income;
the higher the qualification, the more they pay;
work in a friendly team.

Despite all the advantages, time-based payment also has disadvantages. For the employer they are expressed as follows:

it is necessary to constantly monitor the volume of production;
additional staffing unit;
employees receive the same salary, but their performance can vary significantly.

Disadvantages for the employee include:

wages are lower than under the piecework system;
the number of products made does not affect the increase in wages.

It should be noted that the time-based system is not suitable for everyone. To apply it effectively, all factors must be analyzed.

Registration of transition to piecework form

It is worth noting that piecework and time-based wages are not opposites. Sometimes a situation arises when you need to switch to a different method of calculating salaries. To do this, you must fulfill a number of requirements:

there must be a document confirming the transfer;
changes in the terms of the labor agreement are carried out after agreement with the trade union organization;
the contract must be in writing and signed by both parties;
indication of the reason for the transition, for example, reorganization, change in production technology, or other.

It is worth noting that the time-based wage system is very common and quite effective. In this article, all aspects and nuances of this method of calculating wages were discussed most extensively. It should be remembered that the choice of the form of remuneration remains with the employer. He needs to think through everything so that there are no unpleasant consequences.

Let's consider a problem that has existed since the advent of wage labor: how best to pay for it.

Basic, traditional forms wages - time and piecework. Numerous payment systems are based on these two forms of payment or combinations thereof. IN different periods development industrial civilization first one form, then the other, prevailed.

Wages fulfill various functions, which can be implemented with to varying degrees efficiency systems based on piecework or time-based wages. In addition, it is necessary to distinguish for whom this or that form of wages is better: for the employee or for the employer. Their interests may coincide in some situations and be opposite in others. The interests of the employee are primarily realized by the reproductive function, and the employer - by the stimulating function of wages.

Which of the two forms of remuneration is better, more efficient in modern conditions? market economy? The evolution of forms and systems of remuneration abroad reflects a long-term search for a balance between the interests of employers and workers, unionized or not.

Piecework form of remuneration

At first glance, the piecework form of remuneration most fully meets the interests of both the employee and the employer, since the amount of earnings depends on the volume of products made (sold) or services provided, on the results of labor and its productivity. The direct relationship between work results and the amount of remuneration should indeed be attributed to the advantages of piecework wages. The interests of the employer are successfully realized, since the employee is interested in increasing output and in this regard does not need to be controlled. If an employee, for one reason or another, reduces output or productivity, he will be the first to suffer losses. Therefore, his risk is higher than the employer's risk. If we consider that piecework pay attracts workers who agree to work hard and intensively, then this can be perceived as a kind of market signal to the employer about the desire to work productively, which is important in conditions of incomplete and asymmetric information.

For the worker, the benefits of piecework are related to what he has real opportunity increase your earnings by performing more work and increasing labor productivity. In addition, in some cases, almost any worker can get a job with piecework payment, regardless of his reputation, state of health, and sometimes the presence of documents (for example, while harvesting, unloading wagons, etc.). The employer's risk in such cases is small: the employee receives a basket (box, bag, etc.) in his hands, and then - “as you trample, you burst.”

With piecework wages, the utility of a worker depends on his abilities. Empirical studies by American economists have shown that the productivity of workers with piecework wages is higher than with time-based wages. Thus, at enterprises in the shoe and clothing industry, workers' earnings when using a piecework system are 14-16% higher than when using a time-based system, and in the automotive industry - by 20-50%.

In certain areas of production, the use of piecework wages is more effective than time wages, since it motivates the employee to increase productivity. Piecework wages abroad are still successfully used in leather, steel, furniture and other light industries.

Why, from the middle of the 20th century. in most developed countries, the share of pieceworkers is beginning to decline rapidly? In the USA over the 1950-70s, their share decreased from 70 to 30%; in France over 15 years (since the early 60s) it fell from 40 to 15%; in the 90s, on average, 70-80% of workers in developed countries received time wages; in the USA their share reached 86%.

The fact is that piecework payment is associated with a number of disadvantages and gives rise to many problems - both for employees and employers:

It can be difficult for an employer to take into account factors that do not depend on the employee, but affect production (illness, equipment breakdown, supply interruptions, weather conditions, etc.). If earnings do not depend on results, then he is unlikely to want to be particularly diligent. It should be borne in mind that the increase in the output of piece workers is due not only to their own efforts, advanced training and development of their abilities. It is determined by the entire set of factors for the effective functioning of a given workplace - its technical, organizational, economic preparation. The results of the work of piece workers embody the work of engineers, auxiliary workers and many other specialists of the enterprise.
There is also the problem of balancing the employee's efforts with the employer's goals. Not all aspects of work activity are observable or measurable. How to measure, for example, conscientiousness, politeness, friendliness, good manners, dedication to the interests of the company? Establishing any criteria for evaluating work can lead to the fact that the employee will strive to improve exactly those indicators of his work that meet these criteria, ignoring other aspects of work that are not measured quantitatively.
A serious disadvantage of piecework payment for the employer is the danger that, in pursuit of quantity of production, workers will not pay attention to its quality. Costs for quality control of products (services) may negate savings on other forms of control.
The piece-rate wage system links an employee’s earnings to his individual results, leaving the work of a department, division or organization as a whole without attention, which negatively affects collective motivation and group work. There is a weakening of the sense of belonging and belonging to the team. The pieceworker is not too interested in the successes of his fellow workers and the overall results of the company’s activities. He has no incentive to achieve results in the long term; what matters is how much he has earned now. One consequence of this is high staff turnover.
Problems often arise with correct use technology. Excessive haste of workers leads to equipment breakdowns, violation of safety standards, an increase in injuries, and excessive consumption of raw materials. Some companies abroad even require pieceworkers to use their own tools or machines in their work.
It is very difficult to establish reasonable production standards, especially when revising them during the introduction of new equipment. This is especially true for industries with frequent changes in products and technology. Specialists-standardizers, documentation of changes, etc. are required.
For the same annual salary, time-based payment is preferable to employees. Most of them, having a natural aversion to risk and having financial obligations associated with regular expenses (paying rent, buying food, etc.), will prefer greater certainty of earnings. This means that the transition to piecework payment will require equalizing differences in pay, which will compensate for workers’ concerns about possible fluctuations in their earnings, which will bring additional costs to the employer. By the way, this also explains why the earnings of piece workers are higher than those of time workers.
When using a piece-rate payment system, workers often encounter the so-called “ratchet effect”. It is as follows. The worker produces more output than the company expected. The manager attributes this to the fact that the work is not too hard and, therefore, the wages are too high. Therefore, there is a high probability that the wage rate will decrease.
With piecework wages, it is not easy to measure individual output. While quantitative aspects of work can be measured objectively, qualitative aspects often require subjective assessments. If only part of the functions performed by an employee can be objectively measured, then unmeasured responsibilities will be ignored by him. But how to measure the individual output of an assembler on an assembly line? Group incentives are more appropriate here.

In this regard, it should be noted that, along with individual types of piecework wages (the most common of them are piece payment and payment of commissions to sellers), group incentives and various systems profit sharing - with an emphasis on rewarding groups rather than individual workers. Group piecework pay allows you to more closely link the interests of the employee and the employer, linking the amount of collective earnings with the results of the company's activities. The main problem in this case is the “free rider problem”, when the laziness of some workers is compensated by the diligence of others, which, of course, does not contribute to the motivation of the latter’s work. This problem is easier to resolve in small groups. But what if the team is large and some employees are not too confident in the efforts and productivity of others? Creating an atmosphere of ownership (of the interests of the entire organization) can help. With piecework payment this is much more difficult to do.

It is necessary to properly reward managers for the performance of their departments. But here, too, a measurement problem arises, for example, over what period should the manager’s performance be assessed? Foreign experts believe that it is better to take into account the results of a manager’s activities not for one year, but for several recent years. It is also advisable to link executive pay to the value of the company's shares, aligning their interests with those of shareholders.

As you can see, there are many disadvantages to piecework payment. The time-based form of payment is largely freed from them, although it also has its drawbacks.

Time wages

The increasingly widespread use of time-based wages in the world is explained by many circumstances, the main one of which is scientific and technological progress, which makes changes to the technology and organization of production. The division of labor and specialization are deepening, and the requirements for personnel qualifications are growing, including in the service sector. Increasingly, the results of an individual employee's work are difficult or impossible to separate from overall results and quantify. Often the production process is strictly regulated. It is not always possible to increase output, and this is not always necessary, especially if an increase in product output can lead to a deterioration in its quality or the company solves the problem of saving material resources.

An important advantage of the time-based payment system for the employer is the reduction in the costs of product quality control. At the same time, it is easier to form in the employee a sense of involvement in the interests of the entire organization (corporate patriotism). Staff turnover is reduced; it is possible to use personnel motivation models that “work” only with long-term cooperation between the employee and the company.

Time payment for an employee is a guarantee of relatively stable income. A workforce where work is paid by the hour is usually more united, since there is less turnover and the economic interests of some workers are less likely to conflict with the interests of others.

But there are also many problems. After all, the employee actually receives money for being present at the workplace; he has no incentive to work productively. There is a need for a supervisor who controls the labor process and the volume of production. But this requires considerable costs and reduces the possibility of specialization. The observer must have sufficient information. Sometimes detailed control is simply not feasible. Controllers can collude with those they are supposed to monitor, so they themselves have to be monitored.

In conditions of perfect competition, firms that pay by the piece, as well as those that pay by the hour, will receive the same normal profit. At the same time, firms using a time-based form of remuneration will not be able to pay the costs of control (their profit will be lower than normal and they will go bankrupt), and the workers themselves will pay for them from their wages. By the way, this is another explanation for lower earnings with time wages than with piecework wages. The choice of a remuneration system may depend on how high the control costs are: firms with high costs will prefer to pay piecework, and firms with low costs will choose time payment.

By paying the employee's work on a time basis, i.e. in fact, just by being present at certain hours at the workplace, the employer assumes the risk of fluctuations in his productivity. A productive worker increases the company's profits, an unproductive one does the opposite, and their wages are the same. Pay is more difficult to link to the end result. In addition, employees may put their own interests above the interests of the consumer, which can cause damage to the company in the long run.

The advantages and disadvantages of piecework and time-based wages are presented in Table 1.

Table 1. Comparative characteristics piecework and time-based wage systems

	Piece wages	Time wages
	Positive sides
Employer	1. The employee is interested in increasing output. 2. Fluctuations in productivity fall more on the employee. 3. Reducing the costs of employee control. 4. Reducing risk for the employer. 5. Willingness to work on piecework terms is a signal of the desire to work productively.	1. The costs of monitoring product quality are reduced. 2. The employee has a higher sense of belonging to the organization. 3. Less staff turnover.
Worker	1. There is an opportunity to increase your earnings by performing more work and increasing labor productivity. 2. Almost any employee (regardless of his reputation, health, etc.) can get a job.	1. Certainty and relative stability of earnings. 2. Possibility of stable income with limited effort. 3. Cohesion in the work team.
	Negative sides
Employer	1. In pursuit of quantity, workers stop paying attention to product quality. 2. Quality control costs may offset savings from other forms of control. 3. Excessive haste leads to equipment breakdowns, violation of safety standards, and an increase in injuries. 4. Overconsumption of raw materials and supplies is possible. 5. There are difficulties in establishing production standards, especially when revising them. 6. Standardization specialists and documentation of standards are required. 7. There are difficulties in determining the volume of output: it is impossible to measure all aspects of activity - the employee works for measurable indicators. 8. There is a weakening of the sense of belonging to the team; The pieceworker does not care about the successes of his colleagues and the overall results of the company. 9. The employee has no incentive to work in the long term (it is important to him how much he has earned now), hence the higher staff turnover. 10. Equalizing differences in pay are needed to compensate for workers' concerns about possible fluctuations in their earnings.	1. The employee actually receives money for being present at the workplace - he has no incentive to work productively. 2. There is a need for a “supervisor” who monitors the labor process and production. 3. The need to control output increases the firm's costs. 4. The employer takes more risks than the employees: a highly productive employee increases profits, an unproductive one - on the contrary (their wages are the same). 5. The employer assumes the risk of fluctuations in performance. 6. Payment is more difficult to link to the end result. 7. Employees may put their own interests above the interests of the consumer, which in the long term may harm the interests of the employer.
Worker	1. The presence of fluctuations in earnings, which is undesirable for workers who are usually risk-averse. 2. The possibility of underestimating factors that do not depend on employees, but affect production and results. 3. The likelihood of safety violations increases. 4. With group incentives, the interests of the employee and the employer are more closely aligned, but a “free-rider problem” is possible. 5. Ratchet effect: the danger of lower wage rates due to high output.	1. Wages are lower than with piecework. 2. Inequity in pay is possible due to its indirect connection with labor results. 3. Equal pay for high- and low-productivity workers is possible. 4. An employee cannot increase his earnings by increasing his labor efforts. 5. With group pay, a “free rider” may appear.
	Conditions of use
	There are quantitative indicators of output (production, sales, service). Workers have a real opportunity to increase output. It is necessary to encourage workers to further increase production volumes. Useful in mass production where workers perform simple, repetitive tasks so it is easy to measure the results of their work.	The results of an employee’s work are difficult to separate from the overall results. The results of an employee's work are difficult to quantify. The employee has no opportunity to influence the increase in output. Manufacturing process strictly regulated. The task has been set to achieve savings in material resources. An increase in production volumes may lead to a deterioration in its quality.

The use of piecework in its pure form is advisable where a person works independently and produces homogeneous products. In modern integrated and highly mechanized production, which uses mainly intellectual rather than physical labor, this is rare. Nevertheless, in light industry and trade, piecework payment is used. It can also be successfully used in mass production, where workers perform simple repetitive tasks, since in this case it is easy to measure the results of their work and make wages directly dependent on output. Piece wages are used if it is necessary to encourage workers to further increase output, if there are quantitative indicators of output that workers are able to increase.

In service industries, time wages (or variations thereof) are often more effective because it is difficult to determine the volume of services provided to clients by an individual employee. Time-based payment is appropriate in conditions where the employee cannot influence the growth of output during regulated technological processes, forced work, when paying repairmen, etc. Typically, managers, engineers, technicians, specialists and office workers are paid on a time-based basis. Hourly wages are effectively used today to remunerate highly qualified specialists working in the service sector (lawyers, psychoanalysts), on whose final result their professional reputation depends.

If an error is made in determining the payment system, negative results may occur. For example, instead of paying dentists a salary based on the number of hours they spent seeing patients, the British National medical service I decided (temporarily) to pay by the piece, according to the number of teeth filled. As a result, the number of diseased teeth (according to doctors) increased sharply, and the time to treat one tooth was reduced from 18 to 6 minutes, from which patients hardly benefited.

The form of remuneration is important element, realizing its reproductive and stimulating (motivational) functions. In this case, not only the amount of earnings is important, but also how and according to what rules it is formed. This affects the economic, moral, psychological and other aspects of the organization's activities.

Managers need to consider the merits of each form of pay in light of its potential negative consequences and use payment systems that allow you to intelligently combine the interests of employees and the organization.

Motivation, Incentive, Remuneration, KPI, Benefits and Compensation

When getting a job, a person is naturally interested in what his salary will be and on what principle the accruals will be based.

In our country, two forms of remuneration are common: time-based and piece-rate. The first type of salary is more common in Russia.

However, piecework wages are being used more and more. What does piecework salary mean?

Piece wages are a form of remuneration for an employee of an enterprise or company, in which the amount of funds paid depends entirely on the quantity or volume of products produced.

When determining the amount of wages, the complexity of the work performed, its quality and the conditions in which the person works are taken into account.

The piecework wage system perfectly takes into account the interests of the employer. After all, every employee strives to complete the maximum possible amount of work while maintaining excellent quality. After all, if an employee makes a mistake, then his wallet has to pay.

Advantages and disadvantages

Piece wages, like hourly wages, have a significant number of advantages and disadvantages for both the employee and his employer.

If we talk about the positive aspects of the “deal”, then these are:
The amount of money earned depends entirely on the volume of products produced.
The ability to motivate employees and maintain products at the proper level. In many countries around the world, in certain areas of industry (automotive, metallurgy, clothing, footwear, etc.), exclusively piecework wages are used.
Some trade work can be performed by anyone. At the same time, his education, reputation, documents, and health status do not matter. A striking example This includes harvesting vegetables and fruits in the fields, unloading wagons, etc.

With so many advantages, piecework wages are fraught with a lot of unpleasant moments for the employee and the employer.

Let's highlight the main ones:

The influence of factors beyond the control of the employee that may affect production (equipment breakdown, lack of raw materials, problems with partners, natural factors).
The goals of the employer do not coincide with the goals of the employee.
High probability of deterioration in product/service quality in pursuit of high volumes. The need for additional control can lead to unnecessary expenses and reduce the income item to a minus.
Piece-rate payment of wages depends solely on the personal qualities of the employee, leaving aside the factor of work in the general team/department/unit. Quite often these structures have a strong influence on final result human work.
The race to complete the required volume can lead to improper use of equipment, cause its breakdown, violation of labor protection requirements, excessive consumption of raw materials, etc.
Difficulty in establishing reasonable standards per employee. For this process, it is necessary to have a standardizer and special documentation correctly filled out at all stages of the work being carried out.
Instability of piecework wages. This requires additional monetary compensation on the part of the employer.
High production output by an employee in pursuit of high pay can reduce the actual complexity of the work performed and reduce the rate per unit of production. This is sometimes called the “ratchet effect.”
The difficulty of determining the individual production of products for certain operations (assembly on a conveyor belt, etc.).

Therefore, before you agree to a piece-rate salary or introduce it in your company, you need to carefully study all the intricacies of this type of payment.

Scope of application

There are certain conditions in which it is more appropriate to use piecework wages than time-based wages.

This scope of application includes the following indicators:

Increase in activity volumes.
Quality indicators of completed work/manufactured goods, which directly depend on the employee.
Stimulating the contractor at a particular site to increase the volume of work.
Increasing the total quantity of product produced while maintaining high quality.
Accurate accounting of the volume of products completed by an individual employee.
Operation of industrial facilities in a continuous mode (no equipment breakdowns, failures in the supply of raw materials).
Availability of standards justified by a technical specialist.

Varieties

Piecework wages can be made different ways depending on the working conditions and agreement with the employer.

Modern enterprises use the following types of piecework wages.

Direct deal implies the accrual of earned funds based on the volume of tasks completed by the worker. This type is characterized by the presence of fixed prices and taking into account the qualifications of the employee. The disadvantage of this type is the lack of direct interest of the worker in the quality performance of the work of the rest of the team.
Piece-bonus salary combines payment of labor at fixed transaction rates and bonuses to employees for performing work beyond the norm or for improving the quality of manufactured products. The amount of the bonus is set by the company itself. Most often, the indicators for bonuses are the absence of defects, cost reduction, increased labor productivity, etc.
Chord type is that the entire volume of work is taken as a unit for payment and a deadline is set for its completion. Payment of wages to the employee is made only after all work is completed. If a certain deadline is long, then an advance payment is made. If the work is done efficiently and ahead of schedule, employees can receive a bonus. This type most often used in construction, repairs, etc.
Piece-progressive type is a combination of remuneration at fixed rates (if the norm is met) with the addition of increased prices (if the norm is fulfilled). At the same time, the increased tariff differs from the usual one by two times. This type of payment is introduced temporarily, for a period of up to 6 months, exclusively at emergency work sites, in the presence of an urgent order, etc. It is constantly unprofitable to use piece-rate wages due to the rapid growth of workers' wages at a low rate of increase in productivity.
Time-piece type used extremely rarely and is a combination of payment by transaction and payment by the hour.