What are the Wages?
The term Wages are another name of the monetary payment to the employees/workers in accordance with they give their input of work to the employer. Wages do not mean only the payment encashment or financials directly but the meals, lodging, and the like also are considered under the wage domain.
Wages are the commissions, overtime worked payments, vacation pay, and alternative payments equal to financials like reasonable cash value things, tips payout, bonuses on the basis of any pay periods, or any other compensation in the form of remuneration.
- Wage payment is the core dominion of the compensation management under human resource management functions whereby it does not include the cafeteria(s) and/or the meeting rooms’ management for smooth functioning of the strategic organizational perspectives of the employers. On the other hand, it is the main source of the work input done by your workers/employees.
- The economists’ perspectives say The demand for labor to fall causes a decline in the demand of the purchasing power. Or in simple words when there is a decline in wages of labor, consumption will also be reduced. This is because the wages make up a major portion of the national income of any state. This is neither a theory of wages but likely a theory of the spending influence by way of consumption and investments.
- According to the human capital theory which determines wages are the outcome of the skills and the information of employees available in the job markets. Gary S. Becker after the 1960s [a student of Theodore W. Schultz - he is the American Economist] gained the famous view termed labors the human capital. Despite three other factors of production land, capital, and organization, the manpower the human resource the human capital is the main production factor which is invested into, by their own selves or by the employers, for the purpose the skills development useful for production and the task completion success at all the organizational levels – say technical, non-technical, administrative, managerial, middle management, junior, senior, strategic, etc.
- The age-earnings profile was given the name of the journey of the human resources taking time investments and putting into financials to gain knowledge skills and particular abilities to work for the employers, in return getting the wages, and they are the processors towards the total good of the national productivity.
What is the difference between Salary and Wages?
People often use wages and salary interchangeably though they are different terminologies. The wages are often paid per hour, per day, or weekly. Whereas the salary is paid monthly or calculated on yearly basis.
Regularly the monthly payments and yearly payments are said to be salaries. For example, Linda earns $ 24, 000 per year, one may say her yearly salary is $ 24, 000 per year; instead, if someone says Lind earns $ 24, 000 as wage would look weird.
A salaried employee is not eligible, in routine, for overtime as they are paid the fixed amount per month and that is calculated yearly. Whereas wage receiving employees get such benefit when they work more than 40 hours a week, the number of hours they input of workload carried and done, they get paid for accordingly. But this differs from state to state and country to country, at a global level. Local laws must be referred to for any such clarity.
How to calculate the wages?
Wages are calculated with a certain rate of pay against the time worked. Then the hourly rate is multiplied by the total number of hours invested into the work done. Hence the product is known as the total wages, per week if done for 40 hours like 8 hours a day into 5 days a week.
Michael earns $ 12 per hour, and he works 8 hours a day and five days a week, hence the data would be like this:
Hourly wage = $ 12
Hours a day = 8
Days per week = 5
Total Wage per Week = Hourly wage X Hours a day X Days per week
Total Wage per Week = 12 X 8 X 5
Michael’s total Wage = $ 480 per week
How Wages can be paid?
Wages can be paid in the following manner:
- On Weekly basis (52 paychecks per year)
- On-Bi-week basis (26 paychecks per year)
- Fortnightly basis (24 paychecks per year)
- On Monthly basis (12 paychecks per year)
What you must know about the Wages?
It is pertinent to mention here about the wages that the employers must know that they are buying the skills and the time of the employees / of the workers / of the labor. Not only this but the education, knowledge, abilities, and the necessary relevant experiences, as well as expertise, are also bought by you to serve your business segment better than the alternatives available into the markets and the competition facing you and the company.
- As human resource specialists you must know the wages are the vital portion of the capital management which is necessary to be in line with the market forces: say the supply of labor, the demand of services, legislative regulations of the state, labor’s seniority in a company and a domain, in vogue practices like bonuses commissions, etc. and much more.
- Nevertheless, human resources are the capital which is the most inimitable resource of any company, therefore, the wages must be attractive to gain the market competitive labor force hired and then their retention with you for you to be having an edge over your competitor. This way the organizations do gain and maintain their USPs – the Unique Selling Propositions – which are the core protectorate of “You – being the employer and the Organizational Strategic Partner” and that USP is unavailable with others until you leave the employee or the employee leaves you and joins the competitor(s).
Related: Wage to Salary, Supplemental Wages