After reading this article you will learn about:- 1. Meaning of Time Wage 2. Chief Features of Time Wage 3. Conditions Favouring 4. Advantages 5. Disadvantages.


  1. Meaning of Time Wage
  2. Chief Features of Time Wage
  3. Conditions Favouring Time Wage
  4. Advantages of Time Wage
  5. Disadvantages of Time Wage

1. Meaning of Time Wage:

Time Wage is based on the amount of time spent or the passage of time, e.g., hour, day, week or month. Wage is measured on the basis of unit of time, e.g., per day, per week or per month. It is also called salary and it is fixed for the specified time, i.e., income is not variable and it does not depend at all on the performance or the amount of output given by the employee.


2. Chief Features of Time Wage:

1. It is more widely used as it is very simple.

2. It facilitates payroll function.

3. Computation of earnings is quite easy.


4. It provides guaranteed and secured income, thereby removing the fear complex of uncertainty and irregularity of income.

A salaried employee has assured and regular income so that he can concentrate his attention on improvement in the quality and his workmanship. It is very suitable for pioneering work.

3. Conditions Favouring Time Wage:

Time wage is preferable and it is always a practical proposition under the following conditions:


(i) Unit of output is not measurable, commodity is non-standardised, it is not uniform and we have varieties of output. In short, the amount of output cannot be accurately measured, counted and standardised.

(ii) Volume of work is not always within the control of labour. Delays or interruptions in the work may be inevitable due to conditions of work, i.e., speed of work is set by the machine, e.g., assembly line of production in the automobile industry. In chemical industry, paper industry, we have process controlled operations and in such continuous process industries time wage is always preferable.

(iii) If speed of work is risky and we want to minimise risks of accidents.

(iv) When workers are new and learning the job or trade.


(v) When it is difficult to fix the unit of output, e.g., clerical work.

(vi) When quality of work assumes special importance.

(vii) When competitive conditions and cost control do not require precise advance knowledge of labour cost per unit of output.

(viii) When employees have little control over the quantity of out-put, e.g., automation or computer-controlled industry.


(ix) When supervision is good and supervisors know what constitutes ‘a fair day’s work’.

4. Advantages of Time Wage:

1. Greater care and attention on quality and workmanship can be ensured.

2. Worker knows exactly the amount he is to get.


3. Sense of security of income regular and stable.

4. Conducive to harmony and better labour-management relations.

5. Disadvantages of Time Wage:

1. There is no close control over labour costs because we have unequal output by workers. In the absence of positive correlation between pay and output, wage east determination is very difficult no plan, no control over unit labour cost. This is the greatest weakness of time wage system.


2. Time wage system by itself offers no incentive for employees to put forth their best efforts, because there is no direct incentive to produce more, Effort and reward have no direct positive correlation. Hence, employee merit rating and incentive wage plans have to be adopted.

3. Time wage system is inequitable. All are paid equally irrespective of ability, skill or experience. There is no encouragement for better performance. On the other hand merit is discounted and inefficiency is at a premium. All receive the same salary.

4. It is an unsound basis of wage payment. A worker loses initiative. Ambitious workers receive no monetary reward for their talents. Hence, it is unscientific and arbitrary.

5. It demands adequate, intensive and strict supervision over workers. This will increase managerial cost. If the boss is absent, the employees just while away the time in gossiping.

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