The economic essence of the organization of remuneration. The socio-economic essence of remuneration and the basis of its organization. Mixed remuneration system
SOCIO-ECONOMIC ESSENCE OF WAGES AND THE BASIS OF ITS ORGANIZATION
KOVALENKO A.Yu.,
graduate student,
Institute of Economics and Management, e-mail: [email protected]
The article examines the social economic entity remuneration and the basis of its organization, the main functions of wages are studied.
In article the social and economic essence of a payment and a basis of its organization is considered, the basic
functions of wages are investigated.
Keywords: a category; a payment; compensation system; motivation; functions.
JEL classifier codes: J31, J32.
Remuneration is a system of relations related to ensuring the establishment and implementation by the employer of payments to employees for their work in accordance with laws and other regulations legal acts, collective agreements, agreements, local regulations And employment contracts. The central element of this system of relations is wages, which act as remuneration for work depending on the qualifications of the employee, complexity, quantity, quality and conditions of the work performed, as well as compensation and incentive payments.
Wages are based on the price of labor as a factor of production, which comes down to its ultimate performance. According to the theory of marginal productivity, a worker must produce a product that replaces his wages, therefore, wages are made directly dependent on the worker’s labor efficiency.
As a socio-economic category, wages require consideration from the point of view of its role and significance for the employee and the employer. For a worker, wages are the main and main article of his personal income, a means of increasing the level of well-being of himself and his family members. Consequently, the stimulating role of wages is to improve labor results to increase the amount of remuneration received. For an employer, employee wages represent one of the main production costs.
On the one hand, the employer is interested in reducing unit costs work force per unit of production, and on the other hand, is interested in improving its quality, and therefore increasing the costs of its maintenance, if this will increase the profit of the enterprise by stimulating the initiative of employees.
Wages perform three main functions: reproductive, motivational, and regulating.
The reproduction function provides the worker with the volume of consumption of material goods and services at a level sufficient for the normal reproduction of the labor force and increasing intellectual potential in accordance with changing technical and social factors production.
Motivational function is the ability to encourage an employee to be active and improve labor efficiency. This purpose is served by establishing the amount of earnings depending on the labor results achieved by the employee. The implementation of this function is carried out by the management of the enterprise through specific remuneration systems.
The regulatory function plays the role of balancing the interests of workers and employers. It acts as a regulator of demand for the company’s products and services, as well as for labor in the labor market. The basis for implementing the regulatory function is to differentiate wages by groups of workers, by priority of activities or other characteristics. Thus, a certain policy is developed to establish the level of wages for various categories of workers in specific production conditions.
Currently, none of the functions of wages are fully realized. This is primarily due to the underdevelopment Russian market labor.
The mechanism for organizing wages at an enterprise directly reflects the process of converting the price of labor into wages. Through the organization of wages, a compromise is achieved between the interests of the employee and the employer, which contributes to the development of social partnership relations between the two driving forces of the market economy.
The amount of wages determines not only the amount of money the employee will have, but also what he can buy with this money. That is, the purchasing power of money is determined by the ratio of nominal and real wages.
© A.Yu. Kovalenko, 2011
TERRA ECONOMICUS ^ 2011 ^ Volume 9 No. 4 Part 3
A.Yu. KOVALENKO
Nominal wages are the entire accrued amount of an employee’s wages, regardless of taxes and mandatory payments. Disposable wages are the accrued amount of wages minus income tax and mandatory payments. Real wages are the amount of material goods and services that can be purchased with nominal wages, i.e. the purchasing power of nominal wages.
Thus, an increase in nominal wages by 15% with a price increase of 20% (assuming tax deductions remain unchanged) can lead to a decrease in real wages by 4.2% (115:120*100-95.8).
One should also distinguish between monetary and non-monetary forms of wages. The monetary form is the main one, which is due to the role of money as a universal equivalent in commodity-money relations in a market economy. However, if there is no cash Money an enterprise can pay employees with manufactured products, which can be either personally consumed by the employee and his family, or sold (or exchanged for other goods).
Money is the most obvious way an organization can reward employees. Conflicting estimates of the amount of money needed to motivate effective action go back to the early days of human relations theory. Proponents of this theory argue that the social needs of people are of paramount importance, while supporters of the theory scientific management stand on the fact that rewards of a material and economic nature necessarily lead to increased motivation.
Although Frederick Herzberg concluded that most people attribute payment only as a hygienic factor to ensure the absence of dissatisfaction, many behaviorists believe that money can serve as a motivating factor in certain situations. One of them, in particular, wrote that “the application of Maslow’s theory of needs to wages allows us to conclude that it satisfies many needs various types- physiological, needs for confidence in the future and recognition." In one of his early works, Herzberg admitted “that wages, properly related to the employee’s performance, can become a motivating factor for performance, i.e. Usually salary is not directly related to performance and is a hygiene factor.”
This finding has received support from behavioral researchers who have studied expectancy theory. They found that only under certain conditions does an increase in wages stimulate an increase in labor productivity. The first one is that people should attach great importance to salary. The second is that people must believe that there is a clear connection between wages and productivity, and specifically that increased productivity will necessarily lead to higher wages. Obviously, it is desirable for personnel to have a connection between salary and achieved work results. Research has shown, however, that although most managers proclaim their commitment to pay based on the final result, in practice they compensate the effort expended by the employee in accordance with the experience and time spent on work, and not at all according to the characteristics of the results achieved.
Thus, it cannot be denied that wages or employee compensation (compensation in any way that an employee receives from an organization in exchange for his or her labor) plays an extremely important role in attracting, motivating and retaining an adequate workforce in an organization. Compensation can have a dual effect on employees - motivating and demotivating.
An ineffective remuneration system can cause dissatisfaction among employees (both with the size and with the methods of determining and distributing remuneration), which always entails a decrease in labor productivity, a drop in quality, and a violation of discipline. Employees dissatisfied with compensation may enter into open conflict with the organization's leaders, stop working, organize a strike, or leave the organization.
On the other hand, an effective compensation system stimulates the productivity of employees, directs their activities in the direction necessary for the organization, i.e. increases the efficiency of using human resources.
The motivating role of money is especially effective when enterprises reward their employees based on work performance and specific results, rather than on time spent at work.
The main significance of the compensation system is to stimulate the production behavior of the company's employees, directing it to achieve the strategic objectives facing it, in other words, to connect the material interests of employees with the strategic objectives of the organization.
The stimulating, or more precisely, motivational function plays a major role in the intensive use of living labor and directs it to the implementation of management goals.
The motivational mechanism of wages itself is of decisive importance in the implementation of the strategy for the future. However, this value is due not only to the high share of wages in the employee’s total income (usually more than 70%). Traditionally, in the employee’s mind, wages are psychologically associated with recognition of his authority in the enterprise and indirectly expresses his social status. Through wages, an employee indirectly evaluates himself and his success at work in comparison with others. Wages may be low (as they were during all the stagnant years of direct government controlled economics), but if it turns out to be higher than that of work colleagues, then the motivational effectiveness will be higher.
Depending on the remuneration system and the organization of wages at the enterprise, the motivational incentive can be both the amount of wages and the employee’s assessment directly (although the latter will ultimately also be expressed in the amount of earnings). However, the assessment of the employee (the employee’s merits) with the subsequent determination of the amount of earnings turns out to be more preferable for workers compared to an indirect assessment (in the sequence: wages - the employee’s merits). Therefore, the organization of wages with assessment of merit plays a greater motivational role than payment without assessments.
By the way the process of recognizing the employee’s merits during his working life, expressed by the dynamics of earnings growth, we can talk about an adequate process of his integration with production (enterprise, firm). If there is no recognition, then there will be no loyal, motivated attitude towards the enterprise on the part of the employee, or orientation towards high productivity and impact. Thus, for correct socially conditioned motivation, the organization of wages is a decisive condition for achieving the goal of labor management, the employee’s focus on productive work.
Wages are closely related to labor productivity. Labor productivity is the most important indicator of the efficiency of the labor process and represents the ability specific labor give a certain amount per unit of time
SOCIO-ECONOMIC ESSENCE OF WAGES AND BASIS.
quantity of products. And wages refer to the monetary reward paid to an employee for work performed. Wages, being the main source of income for workers, are a form of remuneration for labor and a form of material incentive for their work. It aims to reward employees for work performed and motivate them to achieve the desired level of productivity. That's why, proper organization wages directly affect the growth rate of labor productivity and stimulate the improvement of workers' skills. Wages, being a traditional factor of labor motivation, have a dominant influence on productivity. An organization cannot retain a workforce unless it pays competitive rates and has pay scales that incentivize people to work. In order to ensure stable productivity growth, management must clearly link wages, promotions with indicators of labor productivity and product output.
The reward system must be designed in such a way that it does not undermine long-term productivity efforts with short-term negative results. This especially applies to the management echelon.
Salary can act as a factor that disincentivizes the development of labor productivity. Slow work is often rewarded with overtime pay. Departments that overspend this year can expect an increase in next year's budget. The mere fact of spending more time is not an automatic indicator of more work being done, although pay plans often make these assumptions.
The policy should be to encourage things that increase productivity.
Theoretically, in the private enterprise system there should be an unambiguous connection between what and how you do and how much you get for it. Pay and performance must be linked. As a results-oriented society, the underlying assumption is that full compensation for effort, including salary, should reasonably reflect each worker's contribution, or more specifically, how effectively he performed.
It is imperative to keep in mind that employee motivation, in the end, is associated with common system remuneration of a given organization, which can provide an almost unlimited variety of them, “connecting” to the system of labor intensification. At the same time, countless events can occur in an organization that will “disable” employees. (Some of these can be controlled by the organization, and some cannot.) In order for the organization to be highly productive, the impact of “on” events must be significantly greater than that of “off” events.
One of the most powerful “connectivity” tools an organization has at its disposal is a compensation and incentive program. Anyone who has worked with people knows that there is an almost unlimited number of factors and ways to influence the motivation of a particular person. Moreover, the factor that today motivates a particular person to work intensively, tomorrow may contribute to the “switching off” of the same person. No one knows exactly how the motivation mechanism works, how strong the motivating factor should be and when it will work, not to mention why it works. All that is known is that the employee works for monetary reward and a set of compensation and incentive measures. The employee can, to a certain extent, use the money he receives at his own discretion. Monetary remuneration and other compensation components provide the necessary conditions for the employee’s survival, development, leisure activities in the present, as well as confidence in the future, development and high quality of life in the future.
These compensation components, of course, can in no way meet all of an employee's needs. At the same time, the organization provides literally hundreds of other benefits to its employees, which can at times significantly enhance and complement the compensation and incentive program and often satisfy those needs that are beyond the capabilities of this program.
To no less an extent, a consolidated program of compensation measures for any organization can characterize how this organization evaluates the significance of the work assigned to a given person and the results achieved by him. In this regard, it should be remembered that the value of any type of activity and the value of the person working in this position are two completely different things.
However, the current level of wage organization does not allow us to draw conclusions about any serious successes in the target orientation, or its use for the implementation of motivational policies.
In order for wages to meet the goals of management strategy: developing a sense of community among employees, educating them in the spirit of partnership, rational combination of personal and public interests, a change in its motivational mechanism is required. Psychologically, and then economically, wages should aim the employee at a clear understanding of the relationship between the requirements of the enterprise, company and his contribution to the final results, and, as a consequence, the amount of wages. Unfortunately, in modern organization wages are dominated by economic orientation. Economic categories are of dominant importance: income, wage fund, internal prices (calculated, planned and accounting, etc.) and others, which are not analyzed from the point of view of the formation of motivation, inducement to active work every employee.
So, in order for wages to fulfill their motivating function, there must be a direct connection between its level and the employee’s qualifications, the complexity of the work performed and the degree of responsibility.
LITERATURE
1. Vikhansky O.S. Management. M.: Gardarika, 1998. 133 p.
2. Ilyin E.P. Motivation and motives. St. Petersburg: Peter, 2000.
3. Ogirenko E.A. Deductions for personal income tax: new rules, old problems // Glavbukh. No. 3. February 2005. pp. 13-15.
4. Organization and regulation of labor: Textbook / Ed. SOUTH. Odegova. M.: Exam, 2003. 464 p.
5. Paliy V.F. Modern accounting: Textbook. allowance. M.: Accounting, 2008. 387 p.
6. Podolsky V.V. Audit / Ed. IN AND. Podolsky. 3rd ed. reworked and additional M.: UNITY-DIANA, 2006. 405 p.
7. Smirnova N.M. From social metaphysics to the phenomenology of the “natural attitude”. M., 2006.
8. Sokolov Ya.V. Encyclopedia of General Auditing. M.: Business and Service, 2007. 863 p.
TERRA ECONOMICUS ^ 2011 ^ Volume 9 No. 4 Part 3
Topic 8 Organization of remuneration at the enterprise
8.1 The socio-economic essence of remuneration and the basis of its organization
8.2 Forms and systems of wages
8.3 Foreign experience material incentives for the labor of enterprise personnel
8.4 Features of organizing remuneration for public sector workers and civil servants
Wage - This is a remuneration for work issued for the personal consumption of workers, in accordance with the quantity and quality of labor expended.
Wages are the main source of personal income for an employee, a means of increasing his level of well-being. For an employer, wages are a cost item for production.
Socio-economic essence of wages consists in the presence of opposing interests of the employee and the employer in their relations regarding the work performed by the employee. The employee's interest is to increase wages by increasing his labor contribution to labor results, and the manager's interest is to minimize labor costs.
Salary serves three functions:
1) reproductive;
2) motivational;
3) regulating.
Reproductive function of wages provides the worker with a volume of consumption of material goods at a sufficient level for normal reproduction of the labor force and increasing intellectual potential in accordance with changing technical and social factors of production.
Motivational function is the ability to encourage an employee to be active at work and improve labor efficiency. This function is implemented through various ways wages. The regulatory function acts as a regulator of labor demand in the labor market.
Regulatory function is implemented through differentiation of wages for workers of different categories (workers, employees).
The mechanism for organizing wages at an enterprise reflects the process of converting the price of labor into wages. Through the organization of wages, a compromise is achieved between the interests of the employee and the employer.
The amount of wages is determined not only by the amount of money, but also by what he can buy with this money. Therefore, a distinction is made between nominal, disposable and real wages.
Nominal wages- this is the entire accrued amount of wages, regardless of taxes and mandatory payments (income tax, contributions to funds).
Available salary– this is the accrued amount of wages minus income tax and mandatory payments for social needs.
Real wage is the amount of material goods and services that can be purchased with disposable wages.
Wages can be paid in monetary and non-monetary form, for example, in products, but mainly in monetary form.
The structure of remuneration for employees of an enterprise shows the composition and share of remuneration elements:
1) basic salary - 50%;
2) additional salary - 10%;
3) remuneration for the final result - 5%;
4) bonuses for work results for the year - 30%;
5) social payments - 5%.
Types of wages:
1) main;
2) additional.
Basic salary– this is remuneration at tariff rates and salaries, bonuses and zone coefficient.
Additional salary- This is payment for time not worked. It includes surcharges and allowances for harmful conditions labor, additional payments for night work (from 10 p.m.), for the level of employment during the shift, vacation pay. Allowances for employees are introduced to stimulate the efficiency of their work: personal allowances for managers and specialists - for qualifications (for example, for an academic degree, title), for combining professions, for performing additional duties. Remuneration for the final result is paid for achieving planned indicators and exceeding them. For example, for increased labor production and resource savings. The bonus for performance is paid based on the results of the month, quarter, or year at the expense of the enterprise’s profit. It stimulates the achievement of high final results. Social benefits include full or partial payment of expenses for transport, medicines, voluntary life insurance for employees, financial assistance. They are carried out from the profit of the enterprise.
Payroll organization includes:
1) establishing labor standards: time standards; service standards; staffing standards; controllability standards;
2) development of a tariff system;
3) determination of forms and systems of remuneration.
Tariff system of remuneration is a set of norms and standards that provide the possibility of differentiation and regulation of wages of various categories of workers depending on the quality of their work.
The tariff system includes:
1) the wage scale is a scale of categories, each of which is assigned its own wage coefficient;
2) tariff rate - the amount of wages for various groups of workers per unit of time;
3) tariff-qualification reference book is a collection regulatory documents containing qualification characteristics workers. It serves to determine the category of work by profession depending on complexity and working conditions. Nowadays, tariff-free systems are common, in which guaranteed rates are abandoned, and wages depend on the products sold.
The Constitution of the Russian Federation of 1993, as one of the fundamental rights and freedoms of man and citizen, enshrined the right to remuneration for work without any discrimination and not lower than established federal law minimum wage. The mechanism for implementing this constitutional right is enshrined in Labor Code RF through the determination of wages. In accordance with Art. 129 of the Labor Code, remuneration is a system of relations that are associated with ensuring that the employer establishes and makes payments to employees for their work in accordance with laws, other regulations, collective agreements, agreements, local regulations and employment contracts.
That is, for his work - work performed, products produced - the employee receives wages. This is a reward for his work, recognition by society of the need this work, bringing a socio-economic effect, which is expressed in the employer receiving income (profit).
But wages are not only payment for the results of labor. The role of wages is expressed in its stimulating effect on a person: the amount of payment, the payment procedure and elements of the organization usually develop a person’s personal interest in work. Thus, wages play a dual role: on the one hand, it is payment for the result of labor, on the other, it is an incentive to work.
The famous English economist A. Smith believed that wages are remuneration for the labor that the employee sells to the employer. From his point of view, the product in the labor market is the process of activity itself to create a product (service). A. Smith put forward the position that wages represent the price of labor and are reduced to the cost of the minimum means of subsistence necessary for the worker and his family.
According to another classic of economics, D. Ricardo, labor, like other goods, has a natural and market value. At the same time, by natural he understood the cost of the means of subsistence of the worker and his family, and considered market wages, which fluctuate around its base - the natural price - under the influence of supply and demand.
The concept of wages developed by K. Marx is based on the distinction between the concepts of “labor” and “labor power”. A specific feature of the hired as an expedient activity of a person is that he, after concluding a contract of employment. Before this, labor does not exist, unlike other goods that receive a material form before they are sold. The subject of purchase and sale, therefore, is not labor, but labor - the ability to work as a set of physical and spiritual abilities that a person has.
In theory, wages are the price of labor power, corresponding to the cost of consumer goods and services that ensure the reproduction of labor power, satisfying the physical and spiritual needs of the worker and his family members. This approach to understanding the essence of wages, which determines the cost of reproduction of labor power through the appropriate level of consumption of goods and services, characterizes the attitude of society to the justification of wages. At the enterprise level, this value is adjusted taking into account the profitability of the work, the quantity and quality of the employee’s work, but should not be lower than the size guaranteed by the state. The actual amount of wages is determined by the funds allocated by the employer for these purposes.
At present, wages play a special role in the structure of a worker’s income, since for the vast majority of workers the main source of income, and therefore the level of wages in the future will remain the most powerful incentive to increase the productivity of labor and production in general.
Table 1.1 - Main functions of remuneration
Reproductive
Consists of ensuring the possibility of reproduction of the labor force
Stimulating (motivational)
Aimed at increasing interest in production development
Social
Contributes to the implementation of the principle of social justice
Accounting and production
Characterizes the extent of participation of living labor in the process of formation of the price of a product, its share in total production costs
10. 40.What role does wages play for the employee and the employer?
Wages perform several functions, the most important of which are reproduction, incentive, status, regulatory (distribution), production-share, etc.
The reproductive function of wages is the ability of wages to be sufficient to compensate for physical, mental and other costs that occur in the process labor activity person and preparation for it. That is, the degree (completeness) of implementation of the reproductive function of wages is determined by its size, and also depends on the level of prices for goods and services, inflation, timely payment of remunerations and some other aspects.
The degree of implementation of the reproductive function of wages can be assessed, measured and analyzed by comparing two values - the cost of living and the wages that a particular employee receives. If the wage is not less than the officially established subsistence minimum, then it fulfills its reproductive function.
To ensure not only simple, but also expanded reproduction of the labor force, it is not enough for the worker’s wages to be equal to the subsistence level alone. Wages must exceed the subsistence minimum, so for their expanded reproduction a person needs funds for physical, cultural, intellectual development, as well as the maintenance of disabled, young family members, etc.
The status function of wages presupposes the correspondence of the status, determined by the amount of wages, to the labor status of the employee. By “status” we mean a person’s position in a particular system of social relations and connections. Labor status is the place of this employee in relation to other employees, both vertically and horizontally. Hence, the amount of remuneration for work is one of the main indicators of this status, and its comparison with one’s own labor efforts allows one to judge the fairness of remuneration.
The status function is important, first of all, for the workers themselves, at the level of their claims to the salary that workers of the corresponding professions have in other companies and the orientation of personnel to a higher level of material well-being.
The stimulating function of wages is its property (ability) to direct the interests of workers to achieve the required results of labor (more of it, more High Quality etc.), primarily by ensuring the relationship between remuneration and labor contribution. That is, the degree of implementation of the stimulating function of wages is determined, first of all, by its organization, and not by the size of wages. For example, main reason The lack of full realization of potential abilities and capabilities of half of all workers in the real sector of the Russian economy is precisely due to the lack of relationship and dependence of the size of their wages on the actual results of labor, qualifications and professionalism.
The stimulating function of wages is to ensure a certain labor return from the employee, necessary for the employer, to create a certain stereotype of the employee’s behavior in the production process, to realize his physical and spiritual abilities in the process of work. Wages, in the process of implementing their stimulating function, force the employee to a certain level of labor efficiency required by the employer, sufficient to not only cover his labor costs, but also bring a certain profit, from which taxes for national and local needs will be paid and expansion of production is ensured.
The regulatory function of wages affects the relationship between demand and supply of labor, the formation of personnel (number of employees and professional qualifications) and the degree of its employment. This function serves as a balance between the interests of employees and employers. The objective basis for the implementation of this function is the principle of differentiation of wages by groups of workers, by priority of activities or other grounds (features), i.e. development of a specific policy for establishing the level of wages for various groups (categories) of workers in specific production conditions. This is subject to regulation labor relations between social partners on mutually acceptable terms and reflected in the collective agreement.
The production-share function of wages determines the extent of participation of living labor (through wages) in the formation of the price of a product (product, service), its share in total production costs and in labor costs. This share makes it possible to establish the degree of cheapness (high cost) of labor power, its competitiveness in the labor market, because only living labor sets materialized labor in motion (no matter how great it is), and therefore presupposes mandatory adherence to the lower limits of the cost of labor power and certain limits salary increases. This function embodies the implementation of previous functions through a system of tariff rates (salaries) and grids, additional payments and allowances, bonuses, etc., the procedure for their calculation and dependence on the wage fund.
The production-share function is important not only for employers, but also for employees.
11. What is the difference between nominal wages and real wages??
Salary, or in common parlance – salary, is one of the most important and important economic resources. This type of income is the only one for most people, which is why wages are so important. In Soviet times, wages were some part of the total national income. Each worker had the right to receive monetary remuneration for his work, which was given to him for personal use. Today, wages are defined as payment for labor used by the employer and expressed in monetary terms. Labor here has several definitions - it is not only labor in the direct sense, for example, the labor of workers who produce material goods, but also intangible labor: creativity, the service sector, etc.
Wages, being the main source of income for workers, are a form of remuneration for labor and a form of material incentive for their work. Therefore, the correct organization of wages directly affects the growth rate of labor productivity and stimulates the improvement of workers' skills.
Remuneration is the monetary expression of that part of workers’ labor in the social product that goes into personal consumption.
In accordance with Art. 80 of the Labor Code of the Russian Federation, types, remuneration systems, sizes of tariff rates, salaries, bonuses, other incentive payments, as well as the ratio of their amounts between individual categories of personnel, enterprises, organizations are determined independently, which is reflected in the remuneration system of the enterprise.
There are two types of remuneration: basic and additional.
The basic payment includes the payment accrued to employees for time worked, quantity and quality of work performed. Payment based on piece rates, tariff rates, salaries, bonuses for piece workers and time workers, additional payments due to deviations from normal working conditions, for night work, for overtime, for brigade supervision, payment for downtime not due to the fault of workers, etc.
Additional wages include payments for unworked time provided for by labor legislation: payment for regular vacations, breaks in the work of nursing mothers, preferential hours for teenagers, for the time they perform state and public duties, severance pay upon dismissal, etc.
The main forms of remuneration are time-based, piece-rate and piece-rate. The first two forms of remuneration have their own systems: simple time-based, time-based bonus, direct piecework, piecework-bonus, piecework-progressive, indirect piecework.
The remuneration system is a method of calculating the amount of remuneration to be paid to employees in accordance with their labor costs or the results of their work.
With time-based forms, payment is made for a certain amount of time worked, regardless of the amount of work performed.
With a time-bonus wage system, a premium in a certain percentage of the tariff rate or other measure is added to the amount of earnings at the tariff. The primary documents for recording the labor of employees with time-based payment are time sheets.
With a direct piece-rate system, workers are paid for the number of units of products they produce and work performed based on fixed piece rates, established taking into account the required qualifications.
The piece-rate bonus system for remunerating workers provides bonuses for exceeding production standards and achieving certain quality indicators (no defects, complaints, etc.).
Under the piece-rate system, pay increases for production above the norm.
With an indirect piecework wage system used for auxiliary workers, the amount of wages depends on the results of the labor of the main jobs they serve.
Chord form remuneration involves determining the total earnings for performing certain stages of work or producing a certain volume of products.
Other forms of wages are also used.
Contract -- This is an agreement under which one party, the contractor, undertakes to perform certain work on the instructions of the other party, the customer, who, in turn, undertakes to accept and pay for the work performed. Remuneration is made only based on the final result. Funds for paying the contractor's labor include the basic salary, which is formed, as a rule, according to established salary standards for the final result of the work, and bonuses based on collective results; in addition, some individual payments, mainly of an incentive nature, may be made.
Various systems can be used for remuneration.
The tariff system is a set of standards by which the level of wages of various groups and categories of workers is regulated depending on the following conditions:
complexity of the work performed;
labor levels, including those deviating from normal levels;
natural and climatic conditions in which the work is performed;
intensity of work (combining professions, team management, etc.);
nature of work.
The main elements of the tariff system include tariff and qualification reference books, tariff schedules, and tariff rates.
The basis of a tariff-free system wages due qualification level characterizing the actual productivity of the employee. It is defined as the quotient of dividing the employee’s actual salary for the previous period by the minimum wage level established at the enterprise, based on the proportions specified tariff system. The base can be taken not from the qualification level, but from salaries and tariffs, with or without taking into account the corresponding bonuses.
IN last years the payment system has become quite widespread determining the amount of remuneration for an employee based on the salary of the manager; in this case, the monthly salary of the manager is taken as 100%, and a coefficient is established for each position (taking into account its importance in the structure of the enterprise).
In addition, the employer may establish any other form of remuneration that does not violate the interests of the employee, and also does not worsen his position in comparison with that provided for in the collective agreement and the law.
In accordance with Article 78 of the Labor Code, the monthly remuneration of an employee who has worked the standard working hours fully determined for this period and has fulfilled his job responsibilities, cannot be lower than the minimum monthly amount of labor. IN minimum size wages do not include additional payments and allowances, as well as bonuses and other incentive payments.
1. The essence and significance of the remuneration system
1.1 Concept and essence of the remuneration system
The employees of an organization are its main capital, since it is on them that the achievement of the goals of the organization, institution and enterprise depends. In order for employees to strive to achieve the goals of the institution, it is necessary that it, in turn, motivate them to do so. Motivation in this case is understood as the process of motivating oneself or others to act in order to achieve personal goals and (or) the goals of the institution.
One of the means by which motivation can be achieved is stimulation.
Stimulation is the process of using various incentives to motivate people, where incentives act as levers of influence that cause the action of certain motives.
Stimulus is an external motivation, elements of the work situation that influence a person’s behavior in the world of work.
For effective stimulation, three of its functions are considered: economic, social and psychological.
Economic function, i.e. there is assistance in increasing production efficiency;
Social function, i.e. through income, a social structure is formed, needs are formed, personality develops, etc.;
The moral function, or educational function, is directly formed by the attitude towards work.
They most fully embrace progressive social relations, being an impact on the object of management, which involves the creation of an external situation that encourages an individual or a team to take actions that correspond to the goals at hand. At the same time, individuals themselves choose these very actions, since they create all the necessary and sufficient conditions. An improvement in labor indicators entails an increase in the degree of satisfaction of any needs of the object, and a deterioration in indicators threatens a decrease in the completeness of their satisfaction.
Stimulation as a method of management presupposes the need to take into account the interests of the individual, the workforce, and the degree of their satisfaction, since it is the needs that are the most important factor behavior of social systems. It should be noted that the set of needs is different for individuals included in any social system, not the same. This individual range of needs is determined by the process of personality formation and the influence of the environment.
The need itself cannot motivate an employee to take any specific action. Only when a need meets an object capable of satisfying it can it direct and regulate the activities of the social system and control its behavior. Awareness of needs evokes interests, desires, aspirations, and attractions.
The execution of certain calculations by the control object in stimulating situations indicates that the incentive mechanism is based on direct exchange (symmetrical, equivalent and guaranteed). Symmetry manifests itself when, in the presence of an agreement to pay for non-gratuitous labor, the efforts of one of the parties involve compensating actions of the other. Equivalence means the presence of a contractual relationship between actions and remuneration (collection) that suits both parties. Security requires both parties to strictly comply with their obligations towards each other.
The essence of employee incentives is as follows:
1) this is the stimulation of high performance indicators of the employee;
2) this is the formation of a certain line of employee labor behavior aimed at the development of the organization.
3) this is an incentive for the employee to make the fullest use of his physical and mental potential in the process of performing the duties assigned to him.
1.2 Types and forms of labor incentives
The most important type of incentive is material, designed to play a leading role in increasing the labor activity of employees. This type consists of material-monetary and material-non-monetary incentives, the latter containing part of social incentives.
The second important thing is spiritual stimulation, which contains social, moral, aesthetic, socio-political and informational incentives. In the psychological approach, moral stimulation is the most developed and widely used subsystem of spiritual stimulation of work.
Let's consider the existing classification of types of incentives:
1. Material and monetary incentives are incentives for employees with cash payments based on the results of their work activities.
The use of material and monetary incentives makes it possible to regulate the behavior of management objects based on the use of various monetary payments and sanctions:
additional payment is a form of remuneration for additional results of labor, for the effect obtained in a specific area;
salary supplement - cash payments above the salary, which stimulate the employee to improve his qualifications, professional skills and long-term performance of combining work responsibilities:
compensation - monetary payments established for the purpose of reimbursing employees for costs associated with the performance of their labor or other duties provided for by federal law:
Bonuses – cash payments for special increased results of work.
2. Social incentives– is presented as material non-monetary. The main focus is the relationship between people, expressed in management’s appreciation of the employee’s merits. This is encouragement through material, non-monetary incentives and social relationships in the team.
3. Moral stimulation- the most developed and widely used subsystem of spiritual stimulation of work and is based on the specific spiritual values of a person.
Moral incentives are those incentives whose action is based on a person’s need for social recognition.
The essence of moral stimulation is the transfer of information about a person’s merits and the results of his activities in the social environment. The source of information about a person’s merits is the subject of management;
the receiver is the object of stimulation, the employee and the team, the communication channel is the means of transmitting information. Therefore, the more accurately such information is transmitted, the better the system performs its function. One of the main conditions for the high effectiveness of moral incentives is to ensure social justice, that is, accurate accounting and objective assessment of the labor contribution of each employee.
Forms of organizational incentives are important in managing the behavior of social objects in the world of work. Let's expand on each of the forms:
1. Anticipatory and reinforcing forms of stimulation.
The difference between proactive and reinforcing forms of incentive organization is the degree of awareness of the control object and the relationship between incentives and performance results.
In anticipatory stimulation, the object of stimulation is informed, even before the start of activity, about what results need to be achieved and what can be obtained for them. He is told how his work will be measured, how it will be evaluated and what the incentive function will be.
With reinforcement, the object of stimulation learns that he was valuable, recognized and encouraged in his work only after the completion of the activity. Stimulation in this case reinforces actions already taken.
2. Individual and collective forms of stimulation.
The division of forms of organization of incentives into individual and collective depends on the results of what work the incentives for specific performers are carried out. If it is based on the results of the labor of the employee itself, then this is an individual form of incentive organization, and if the result of the work of the team as a whole is a collective form. The advantage of the individual form of incentives is that the connection between the effectiveness of a particular performer and its encouragement is clearly visible.
3. Positive and negative forms of stimulation.
Positive and negative forms of incentive organization are based on taking into account deviations of performance results from normative ones. The subject of management encourages the achievement and exceeding of standard indicators by the object of stimulation by increasing the degree of satisfaction of the object's needs. Conversely, failure to achieve or lag behind the established performance indicators is punished accordingly by a decrease in the degree of satisfaction of the needs of the management object.
4. Immediate, current and future forms.
Immediate, current and long-term forms of organization of incentives are highlighted depending on the time gap between the results of activity and the receipt of the corresponding incentive.
The advantage of the direct form is its efficiency and a very clear and direct relationship between action and stimulus.
The current form can appear at the end of the quarter, half year and year. Prospective form - the incentive is awarded within a year of the achieved result.
5. General and target forms.
The general form applies to all participants in social production. In this case, promotion is carried out in connection with public campaigns, anniversaries in the lives of individual employees or public holidays.
In the target form, the development of special offers is mandatory.
1.3 Principles of labor incentives and requirements for its organization
Principles of labor incentives:
the principle of transparency and accessibility (incentives must be understandable to every employee);
the principle of the reality of the stimulus (the stimulus must be real and effective);
the principle of gradualism, timeliness;
On the one hand, we need to strive for a strict connection “fulfilled the conditions - received.” But if you immediately increase the incentive, you may not be able to maintain this level.
Requirements for organizing labor incentives:
1. Complexity suggests that a comprehensive approach is required, taking into account all possible factors: organizational, legal, technical, material, social, moral and sociological. All of these factors should be applied not individually, but in combination, which guarantees good results. This is when significant improvements in efficiency and quality of work will become a reality.
2. Systematicity involves identifying and eliminating contradictions between factors and linking them together. This makes it possible to create an incentive system that is internally balanced due to the mutual coordination of its elements and is able to work effectively for the benefit of the organization.
3. Regulation involves the establishment of a certain order in the form of instructions, rules, regulations and monitoring their implementation. When creating an incentive system, the objects of regulation should be the specific responsibilities of a particular employee, the specific results of his activities, labor costs, that is, each employee must have a complete understanding of what his responsibilities are and what results are expected of him.
4. Specialization- this is the assignment of certain functions and jobs to individual employees in accordance with the principle of rationalization. Specialization is an incentive to increase efficiency and improve the quality of work.
