What are the merits and demerits of incentive system?

[rms]

Discuss merits and demerits of the incentive system of wage payment.

[nbm]

Merits of the Incentive System
Incentive system of wage distribution has following merits to its credit:
1. Incentive system is a healthy way to strengthen the productive front of the industry.
2. Employers as well as workers, both are at advantage.
3. Incentive system reduces the burden of heavy supervision costs.
4. It has been found that the cases of absenteeism arc comparatively lower than in other systems . of wage payment.
5. It develops healthy industrial relations and reduces chances of disputes between the workers and the employers.
6. Incentive system provides better scope for developing human ingenuity.
7. Incentive system develops the feeling of co-operation among the workers.
8. Supervision instead of acting as watch dogs, now act as individuals responsible for managing machines and materials being employed.

Demerits of the Incentive System
1. Though it is expected that under incentive scheme production must go up, but there is equal chance of contrary happenings. r
2. It is very difficult to consider and achieve the psychological and social dimensions.
3. Employment is uncertain.
4. It is difficult to measure the proportionate value of the extra work done.