Fixed wage
This is the wage, which is pre-determined and not .• subject to adjustments.
Reasons for fixed wage
- To enable employees to get-:salaries, which are, commensurate to the task performed.
- It assists the employer when evaluating new assignments and when determining new rates of payments for new jobs.
- It saves burden of salary bargain.
- It helps management in making estimates for salary payments or drawing up the budge for the firm.
Demerits of fixed wage
(i) Time devoted for productive work may not tally with the monetary reward for the work.
(ii) It does not encourage hard work due to lack of incentives. .
(iii) Increases in wages brings psychological effects of inflatiQnary tendency.