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Sir, I doubt how we make payment for direct labor if they have worked less time in producing units than the allotted time.
For example, if a worker is paid at a rate of $5/hr for producing units and he has worked for 20 hours which was less than the allotted time I.e. 24hrs. Therefore, in this case, do we need to make payment for the whole 24hrs or just the payment for 20hrs, if this is the condition it may not motivate the workers to work efficiently since they would be paid less as per the time-based system which means they may only get paid for hours worked which is lower than the payment for the allotted time. However, it may be cost-effective for the company but for the worker, it is unlikely to motivate them to become efficient, right?
Sir, In such cases how do we value the payment of the worker(Do we pay for the allotted time or the actual hours worked by the worker )?
There is no rule for this – it depends on what the company has stated as being their own rule as to how they calculate pay (and similarly in exam questions it will be stated as to how the company is calculating pay).
What you have written with regard to motivating employees is correct, and the company should take this into accounting when deciding on their remuneration system.
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