Question

Speed Ltd. paid its daily wage workers ₹ 100 per hour. Ravi, a worker, was paid ₹ 800 at the end of each day. He checked the number of hours he had worked and found the amount received to be correct. Recently, the company decided to focus on increasing productivity. Hence, workers were now paid on the basis of the number of units they produce. Under the new system, Ravi’s daily wages were ₹ 1000 as he is fast in his work. However, the trade union was dissatisfied. with this decision.

1. Which system of wage payment was initially followed by Speed Ltd? [1]
2. Briefly explain the merit of the old system of wage payment to Ravi. [1]
3. Why was the trade union dissatisfied with the new system of wage payment despite its rewarding efficient workers? [1]
4. Analyse the impact of change in the wage system on the economic security of workers. [1]

Answer 1

1. Time Rate System of Wage Payment
2. • Certainty of income
   • Income stability irrespective of output.
   • Less pressure to produce more units.
   • Suitable where quality of work is important.
3. • Income of workers becomes uncertain.
   • Workers may earn less if production falls.
   • Creates insecurity among workers.
   • Increases pressure to produce more units.
4. • Economic security decreases.
   • Wages depend on output rather than time.
   • Income may fluctuate.
   • Workers may face financial instability.