What is meant by Time wage system?

[laji]

Explain Time wage system with its merits and demerits

[nbm]

Time wage system—Irrespective of the quantity produced by workers, time is made the basis of payment and even now-a-days it is widely used as a form of remuneration. The greater mechanisation of industrial operations and the increased strength of labour unions tend to make this form of wage payment more popular today than it was in the first quarter of this century. According to this system, wages are calculated by the formula = T X R where 'T' is the time spent in the work-place and 'R' is the rate of payment per unit of time.
Merits
Time wage system offers the following advantages:
1. Simplicity is the greatest merit of the time wage system. The time, which a man extends on a job, is easy to measure.
2. It gives the workers a sense of security which is so important for sustaining their interest in work. It gives the workers a remuneration which is more definite and certain as compared with other forms of payment.
3. Where the quality of product is more important than quantity, or the materials worked upon are very costly, time wages prove cheaper than piece rates in their ultimate results.
4. Time wages become the only equitable form of wage payment in those cases where labour productivity cannot be measured because of the non-standardised character of production.
5. In factories with assembly line, each operation is bound up with other operation and a worker cannot work faster than the group. Accordingly time wages become the usual mode of payments rather than piece rates.
6. The workers will avoid over speeding and consequently damage to equipment if they are paid a fixed time rate independent of production.
7. Trade Unions accept this form of wage payment quite willingly because it does not create any distinctions in the ranks of workers on account of differences in efficiency.
Demerits
The greatest disadvantage of this form is that it does not provide any incentive to greater effort or harder work. It makes no difference between an efficient and a lazy worker and both are treated on the same' footing.
The superior workers are repressed under this system because they are paid at par with the inferior workers.
It leads to a reduced quantum of work unless a strict and close supervision is arranged. This method relies more upon the driving power of the supervisor for the purpose of obtaining a satisfactory output.
It offers too much security to workers.
From the employer's point of view, it create difficulties in the calculation of labour cost and the cost per unit.
It destroys the morale of workers and efficient workers are either driven out or their efficiency is pulled down to the level of inefficient workers.
Suitability—The system may prove to be ideal in following cases:
(1) Where supervision is close as in small concerns.
(2) Where quality is more important than quantity e.g., tool making.
(3) Where measurement of work is not simple or not possible.
(4) Where production has to pass through different stages in which case delays and interruptions are inevitable.
(5) Where specialised skills are required to perform the job.
(б) Where increase in the volume of production is beyond the capacity and capability of worker.
(7) Where nature of job changes frequently.
(8) Where a worker is learning a job.