Wages, problems and solutions

According to the Labor Code of the Russian Federation:

“Salary – remuneration for work depending on the qualifications of the employee, the complexity, quantity, quality and conditions of the work performed, as well as compensation payments and incentive payments.” The maximum wage is not limited, but there is a minimum amount that the state sets. It is called the minimum wage – the minimum wage. The minimum wage does not include additional payments and allowances, bonuses and other incentive payments, as well as payments for work in conditions that deviate from normal, for work in special climatic conditions and in territories exposed to radioactive contamination, other compensation and social payments.

The constant part of the salary is official salaries and tariff rates. The tariff system is a set of standards, with their help, wages are regulated.

The variable parts of the salary include: bonuses, allowances, additional payments and compensation. The size of the additional payment depends on the growth of the individual labor efficiency of the employee in this organization. Additional payments are not a permanent and mandatory element of the employee’s remuneration.

It is also worth distinguishing between monetary (nominal) and real wages.

Real – “purchasing power” of nominal wages.

Nominal – the amount of money received for the performance of work.

In developed countries, the difference between real wages and nominal wages is clearly visible. This difference is clearly observed during a crisis – a period when, due to inflation, there is an increase in nominal wages and a decrease in its real size. All this leads to a sharp jump in prices for goods and various services. The level of real wages at this point is rapidly declining. The structure of the modern labor market also affects the size of nominal wages. When there are fewer offers from the employer, the employee is forced to agree to a low wage rate for his work. And the employer has the opportunity to reduce the cost of goods and services and receive a large income. Thus, the employer benefits from low wages .

The choice of a wage system is an important condition for the work of each organization. The main ones are tariff, tariff-free and mixed payment systems, each of which has its pros and cons. The specific system should be selected taking into account the number of employees, the specifics of the work performed and the scope of the company.

Tariff wage system

Time-based – determined by the number of hours worked and the qualifications of the worker. This form is used when the work performed cannot be accounted for or there is no norm for this work.

Simple time wage – the salary of an employee for all the time he has worked. For its calculation, various periods can be used: a month, a certain number of days or hours. The basis for calculating wages here is the tariff rate.

Time-based bonus – this method of payment can be quite effective, provided that the bonus indicators are correctly established and economically justified. The payment of bonuses is influenced by such an indicator as the quality of the work itself or the goods produced.

Piecework – wages are calculated on the basis of piece rates and the number of products that the employee has manufactured.

Direct piecework – with this form of remuneration, wages are calculated by multiplying the piecework rate per unit of manufactured products by the number of manufactured products.

Piecework-bonus wages are calculated in the same way as with a simple piecework wage system. The amount of the bonus is added to the employee’s salary and paid along with the salary.

Piecework-progressive – the level of wages rises when the production norms are overfulfilled with each percentage of this overfulfillment.

Indirect piecework – used to pay employees of service and auxiliary industries. The amount of wages of workers in service industries depends on the earnings of workers in the main production.

Chord – used when remunerating a team of workers or when paying for a specific set of works.

The tariff-free system of remuneration makes it possible to adequately assess the degree of participation in the overall work of each employee.

Qualification level and degree of participation – wages are calculated according to the participation coefficient, the specific contribution of the employee to the results of the company’s activities for the past month is determined. Provides for the assignment of a certain level to each specialist. At the end of the month, in addition, team members set the degree of participation. Thus, the first element is relatively constant.

Consolidated rating – – the remuneration of one employee depends on the performance of the entire team. If the team can interact effectively and achieve good results, then such a system is beneficial to the workers.

The number of stages and the level of complexity – Payroll in this way is carried out in the manufacture of products, design of engineering structures. In this case, the process of direct development of a specific element in the device is performed by one worker. The complete formation of the project is carried out by the entire team.

Mixed system of remuneration – in this model, both tariff and non-tariff system of remuneration is used.

On a commission basis – wages are issued based on the results of the work done and depends on the quality and quantity of tasks performed. Used by private companies.

Floating rates – used in relation to managerial positions, the rate will be determined by the quality of the work done by the employees.

Dealer system – in this case, the employee purchases a certain set of goods from the company and independently sells them. Wages will be determined as the difference between their cost.

Wage issues:

Currently, in accordance with changes in economic and social development, the policy in the field of wages, social support and protection of workers is also changing significantly. In the field of wages, an increased differentiation in the amount of wages between industries, regions and enterprises is characteristic. The level of wages in the fuel and energy industries, non-ferrous metallurgy, in transport, in financial and credit institutions is significantly higher than the national average. At the same time, in agriculture, light industry, and public sector sectors, the level of wages is significantly below the national average.

The structure of remuneration is unbalanced: the over-tariff part at many enterprises is several times higher than the tariff share of an employee’s earnings. This indicates the need for a radical revision of tariff systems at enterprises. The tariff thus does not perform the function of a basic assessment of the results of work.

Weakened attention to the rationing of labor. At many enterprises, work is not carried out to revise outdated standards and to reduce the labor intensity of products. The number of rate setting specialists at enterprises is being reduced, and departments for the organization of labor and wages are being abolished.

All this makes it necessary to reform the wage system in the Russian Federation in order to radically increase real wages.

Ways to improve wages:

Priority reforms should be carried out in the organization of wages so that it corresponds to modern economic conditions. First of all, it is necessary to completely abandon the use of guaranteed tariff rates and official salaries. It is they who act as the main limiter and barrier of wages and the interest of personnel in the development and implementation of existing abilities.

In the near future, measures should be taken to increase the minimum wage on the basis of its gradual increase to the subsistence level.

Be First to Comment

Leave a Reply

Your email address will not be published.