Objectives of an Ideal Remuneration System
An ideal wage system is required to achieve the following objectives:
- The wage system should establish a fair and equitable remuneration.
- A sound wage system helps to attract qualified and efficient worker by ensuring an adequate payment.
- It assists to improve the motivation and moral of employees which in turn lead to higher productivity.
- It enables effective control of labour cost.
- An Ideal wage system helps to improve union-management relations. It should reduce grievances arising out of wage inequities.
- It should facilitate job sequences and lines of promotion wherever applicable.
- An ideal system seeks to project the image of a progressive employer and to comply with legal requirements relating to wages and salaries.
Principles of an Ideal Remuneration System
The following principles should be adopted for an ideal wage system
- Differences in pay should be based on differences in job requirements.
- Follow the principle of equal pay for equal work.
- The scheme should be based on work study, and the work contents of various jobs should be stabilized.
- Recognize individual differences in ability and contributions.
- The scheme should not be very costly in operation.
- The scheme should be flexible.
- The scheme should encourage productivity.
- The scheme should not undermine co-operation amongst the workers.
- The scheme should be sufficient to ensure for the worker and his family reasonable standard of living.