Time Rates

The most commonly understood basis for remuneration is the time rate. The employer agrees to pay and the worker to accept a stated amount of money for a specified period of work. The period selected can be an hour, day, week, month or year, according to the nature and regularity of the work and the status of the employee. An office worker, for instance, will usually work for an agreed sum per year, called a salary. He or she will draw one-twelfth of this sum each calendar month, irrespective of the number of days in the month. Although there may be a requirement regarding minimum hours to be worked in a given period, the main criterion for measuring the work performed by a salary earner is not the number of hours put in, but the adequacy of the performance of the job for which he or she has been appointed. At the other extreme, a homehelp or jobbing gardener will often be paid at so much per hour worked.

The most usual example of a time rate is the fixed wage per week of a standard number of hours - say 371/2 hours consisting of five days each of 71/2 hours. The employee has to attend for work at the stated times and perform the required duties. The actual amount of work he in fact performs does not affect his pay, although were he to shirk, or were the supply of work to dry up altogether, he might find himself laid off, provided the terms of his employment permitted this.

Because there is no measured check on the amount of work performed it is common for workers on pure time rates to be appropriately supervised. In the case of salaried administrative or executive personnel, supervision takes the form of the employee being responsible directly to his superior. In the case of a large number of shop-floor workers a system of clocking on and off ensures that the required number of hours worked is correct, and the employing of a foreman or overseer ensures that workers are not idle and that their output is up to standard in quality and quantity.

Depending on the terms of employment there may be penalties for absence. Commonly, any period of non-attendance short of the standard day or week will involve a deduction in pay at the hourly rate. For example, if the standard week is 38 hours and the standard wage £76 per week, a shortage of one hour or a part of an hour during the week could result in a deduction of one hour at the equivalent hourly rate (in this case £2) from the week's wage. There may, of course, be provision for penalties to be calculated on a different formula.

Personal Income

Wages and salaries

Most people earn their living by working for somebody else - for a small firm, a company or a public authority. In other words, they sell their effort, whether on the factory floor or in an office, hospital, school or wherever, to other people who are able to use it for producing goods or services that have value to the community and can be either sold to willing purchasers or paid for by the public through taxation.

The majority of individuals, therefore, are employees working for a wage or salary. And, although it may be true that the payment we receive for... see: Personal Income

Personal And Business Finance 2018

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