| Fixation of compensation or wage rates for | | | | Basic wage for each job classification should |
| different categories of employees in a | | | | be related to skill job requirements of job. |
| company is an important task of management. | | | | Due consideration should be given to such |
| The employees are not only concerned with the | | | | factors as skill, length of time required in |
| wages received but also concerned with the | | | | learning, versatility required and working |
| level wages received by same level of | | | | conditions. In all fairness to management, |
| employees in similar organizations. Hence | | | | the plan should usually result in a reduction |
| wage structure may be considered very | | | | of unit cost of manufacture, making possible |
| important. The relative wage-rules must be | | | | lower prices and higher profits. |
| fixed carefully, because they have | | | | |
| implications for promotion, transfer, | | | | In all fairness to the consumers a share of |
| seniority and other important personnel | | | | higher efficiency should be passed on to them |
| matters. | | | | by way of lower price. This will be possible |
| | | | when there is reduction in cost due to higher |
| Wage plan should possess certain fundamental | | | | efficiency. Thus the wage plan must ensure |
| characteristics if the long term interests of | | | | that all participate share the gains of |
| the worker, management and the consumer are | | | | higher productivity. The wage plan should |
| to be served. The wage plan must be linked | | | | include an incentive system for the efficient |
| with the productivity of the workers. Unless | | | | workers. The system should ensure higher pay |
| higher pay scales of workers are linked in | | | | to the workers who perform work at higher |
| some way to the productivity of workers, a | | | | level of efficiency. The wage plan should |
| wage plan will not be fair either to the | | | | guarantee minimum wage to protect the |
| management or to the consumers. | | | | interest of workers against conditions over |
| | | | which they have no control. |