CHAPTER VII

LABOR PAYMENT
 
I / CONCEPT OF WAGES AND LABOR REMUNERATIONS
1 / Salary concept:
The nature of the salary is the labor price which is formed on the basis of the
value of the labor power
Salary has the following functions:
Function measure the value of labor
Labor power reproduction function
Stimulating function
Cumulative function
Salary characteristics:
- The increase in wages is determined by the objective means of life needed to
reproduce labor force in both quantity and quality in accordance with the needs of
social development.
- Wages tend to increase constantly because the value of labor itself increases
constantly. A decrease in wages from the level reached will be subject to such
strong resistance that it is in fact not seen as a probable possibility in the long term
or to a perceptible extent.
- The pace of wage development must be slower than the pace of economic
development because the law of the cumulative development of capital is inclined
to a fixed part to ensure extended reproduction.
2 / Labor remuneration
In developed countries, people use the term labor remuneration to refer to the
material and non-material values that workers receive in the process of
employment.
  
II / FACTORS AFFECTING WAGES
1 / Group of factors that belong to the job itself
- Complexity of work
- The importance of work
2 / Group of factors belonging to the employees themselves
- The skill level of the employee
- The employee's own experience
- Level of work completion
Working period
- Loyalty
- Employee's potential
 3 / Group of factors belongs to the company environment
- The company's salary policy
- The company's financial capacity
- Labor productivity
4 / Group of factors belonging to the social environment
- The situation of labor supply in the market
- Average living standard of the population
- Price of living
- Public purchasing power
- Union, society
- Economy
- Law
When building a salary system, people tend to first rely on the job and then use
the skills and performance requirements to determine the salary of each employee.
Based on work based on work Based on skills
results
That means based on Based on the Enterprises pay
the employee's importance of the job that salaries for employees
performance to pay the the employee undertakes according to their
salary to pay the salary capabilities, not by job
names
Advantages: Advantages: Advantages:
- Motivating - Employees are - Motivating
employees to pay geared towards jobs of employees to improve
attention to work results higher importance their scientific and
- Employees interested   technical qualifications,
in improving skills and practice skills
experience to complete
better results
Cons: Cons: Cons:
Syndrome: "only - Does not consider the - Some employees may
doing paid jobs" nature of the work and the have high skills, but they
- Affecting the spirit of specific problems of the are not sure they have
cooperation job completed the job well
Difficulty in - The process of (knowledge, skills are not
evaluating results determining fixed wages necessarily the results)
- Stressful and is subjective Difficulty in
dissatisfied with work - It is difficult to apply determining what is an
this solution when job important skill
descriptions are not - Difficulty in
 specific assessing skill knowledge
- Tend to machines, level
bureaucracy
- "position is not the
result, position is not the
contribution"
 
II / OBJECTIVES, REQUIREMENTS AND PRINCIPLES OF WAGES
STRATEGY
1 / The goal of the salary strategy
- Attract talented employees
- Maintaining good staff
- Encourage employees to improve labor productivity
- Control costs
- Meet legal requirements
The targets are also the benchmarks for evaluating the success of that payroll
system
2 / The basic requirements of the salary strategy
- Salary for employees must be equal to negotiated
- Salary must ensure fairness
This is considered the most important requirement in the salary policy
- Must be consistent with the financial ability of the business
- Salaries must be flexible to cope with competition
3 / Principles of building a salary system
1. Simplicity
2. Match between salary level and salary structure
3. Salary must take into account the value of the job
4. Determine the salary in the market
5. Cost of life
7. Including bonus mechanism
8. Work results
9. Union participation
III. CONTENT, ORDER FOR CONSTRUCTION OF PAY TABLE
The order includes:
- Analyze work
- Determine work value
- Group similar jobs into one salary category
- Determine salary grade and An salary level.
 
* Research competitor salaries
 Determine who is the right competitor and who will be included in the
organization's investigation
 
* Decide strategy on salary.
After consulting the salaries of other companies, the company will decide
whether to adopt its own salary strategy that is equal to, higher or lower than the
prevailing market salary.
Impact factors:
- Viewpoints on salary policies of leaders
- Size and brand value of the company
- The field of business and production of the company
- Financial capability
 
The highest and lowest possible pay is the same as the competitor's, the middle
wages depend on the number of points on the job description.
- High salary strategy: 10- 15% higher than the industry average
       The company has abundant financial capacity
       When the labor cost accounts for a small proportion of the cost
       When a company can afford to control its monopoly market to pass on
labor costs to consumers in the form of slightly higher selling prices without fear
of losing customers
       When a company wants to maintain high recruitment standards (to attract
talented people, improve working morale)
- Low salary strategy: Should be 5 - 10% lower than average
       When the company provides employees with stable income and ensures
job stability
       When the company has the ability to provide additional non-salary income
       When the company continuously provides opportunities for employees to
work overtime for higher salaries
       When the company has a good working environment, there are many
opportunities for learning, training, development and advancement ...
 
III. WAGES FORMS
Generally, there are 2 types of wages. that is:
- Salary paid by time
- Salary paid by product.
1. Salary paid by time
The salary that the employee receives will depend on the working time and the
unit price per unit of time
 Scope of application of this form of salary:
- When the employee performs the jobs that cannot be assigned the labor norms
correctly
- When the work is performed by a chain machine or with a high degree of
mechanization and automation
- When the job requires high accuracy and quality
- There are interruptions and stagnation in production that cannot be overcome
- Apply for jobs of special nature that require high creativity.
- When work directly affects the lives of others.
Advantages:
- Time-based salary payment is easy to calculate and ensures employees a
certain amount of income during their working time.
widely applied in the world
Limit:
- Income is not closely linked with labor results, there arise egalitarian factors
in wage payment
- To overcome, apply the form of bonus salary.
 
2. Salary paid by product
The salary depends on the number of products (or workload) they make and the
unit price per unit of product.
This form of salary gives employees a high incentive for them to do a better
job, improve their productivity and their qualifications to be paid higher.
However, this form of pay-by-product may discourage saving in materials,
protecting machinery and equipment and possibly reducing collective cohesion
among employees.
The conditions for product-based salary payment include:
Labor results must be shown by natural measurements
- Can calculate the results of labor effectively.
- Have an exact labor norm
- Determine the correct grade salary paid for that job.
 
Product salary regimes are usually:
- Direct product salaries personally
Lsp = Average x Q
- Salary of bonus products
L = Lsp + ( ( increase ) x (% bonus) x Lsp)
- Progressive salary
L = Average assessment x Q + progressive assessment x (Q- Msl)
- Indirect product salary regime
  
- Salary for collective products.
 
- Contract salary regime
This salary regime is often applied to jobs where if each detail is assigned, the
department will not benefit but must assign the entire workload to the employee for
a certain period of time to complete. effective.
This salary regime is often applied in industries such as basic construction,
agriculture ...
In essence, the flat wage regime is a special form of product wages.