(2) Piece Rate Systems: (a) Straight Piece Rate (b) Piece Rates with Guaranteed Time RateДЄ Textbook of Financial Cost and Management Accounting (a) At Ordinary Levels (b) At High Wage Levels (c) Guaranteed Time Rates. These may be further classified as under: (1) Time Rate Systems: The following are the important methods of remuneration which may be grouped into : (1) A system of incentive plans also takes into consideration the primary principles of these two basic plans known as Incentive or Bonus or Premium Plan. A variety of bonus and premium plans have been designed to overcome the drawbacks of two basic methods of wage payments. a workman is paid in direct proportion to his output. This is known as 'Piece Rate System' or 'Payment by Result.' Thus. Under piece wage system, remuneration is based on the amount of work done or output of a worker. The unit of time may be a day, a week, a fortnight or a month. This is known as Time Rate or Day Wage System. wages are paid on the basis of time spent on the job irrespect of the amount of work done. Method of Remuneration There are two basic methods of wage payment: (1) Time Wage System and (2) Piece Wage System.

The scheme should be sufficient to ensure for the worker and his family reasonable standard of living. The scheme should not undermine co-operation amongst the workers. The scheme should encourage productivity. The scheme should not be very costly in operation. Recognize individual differences in ability and contributions. The scheme should be based on work study, and the work contents of various jobs should be stabilized. Principles of an Ideal Wage System The following principles should be adopted for an ideal wage system (1)Дifferences in pay should be based on differences in job requirements.ДЇollow the principle of equal pay for equal work.

It should facilitate job sequences and lines of promotion wherever applicable.ДЄn ideal system seeks to project the image of a progressive employer and to comply with legal requirements relating to wages and salaries. It should reduce grievances arising out of wage inequities. It enables effective control of labour cost.ДЄn Ideal wage system helps to improve union-management relations. It assists to improve the motivation and moral of employees which in turn lead to higher productivity. The wage system should establish a fair and equitable remuneration.ДЄ sound wage system helps to attract qualified and efficient worker by ensuring an adequate payment. Objectives of an Ideal Wage System An ideal wage system is required to achieve the following objectives: (1) employee remuneration is a very significant issue from the viewpoint of employers. Wages and salaries have significant influence on our distribution of income. remuneration is more than a means of satisfying their physical needs. influences vitally the growth and profitability of the company. No organization can expect to attract and attain qualified and motivated employees unless it pays them fair remuneration. Remuneration of employees is a vital factor not only affecting the cost of production but also industrial relations of the organization. salaries and other incentives of employee remuneration constitute a very large component of operating costs. Labour Cost Accounting Introduction Labour cost is one of the important elements of production.

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