Salary - this is the part of the funds that goes to consumption. This share of net income depends on the results of teamwork. Wages are distributed among employees in accordance with the quality and quantity of labor that was expended, and also depends on the amount of capital invested initially. Based on the definition of this term in the Labor Code, its main components can be distinguished. So, the wage structure consists of:
- the permanent part;
- compensation payments;
- incentive payments.
It can be of two types: real and nominal. The latter represents the total amount of the money that the employee receives for the labor that he invests. And real wages are the volume of services and goods that can be purchased with a nominal wage.
Without it, there can be no talk of improving the welfare of every person and of the state as a whole. Without material interest, the development and improvement of production is impossible. The following main functions of wages are distinguished:
1. Stimulating. The implementation of this function of wages is necessary, first of all, for the management of the enterprise. It is interested in encouraging subordinates to active and effective work, to maximum return. To this end, the size of the salary is set depending on the results of each individual. The wider the gap between the employee’s personal contribution and his remuneration, the faster his initiative and efforts fade.
2. Reproduction. The significance of this salary function is to support and even improve the living conditions of an employee. It is due to the fact that each person should be able to acquire the most necessary items, raise their children, give them an education, that is, prepare labor resources for the future. He must rest from time to time in order to maintain working capacity for a long time. Also, subordinates should be able to improve their culture.
3. Status. The implementation of this function of wages is to increase the status of a person in accordance with an increase in the assessment of his work in monetary terms. The main indicator of status is the amount of material reward. A person can judge the justice of payment by comparing its amount with his invested efforts.
4. Regulatory. This function affects the relationship between supply and demand in the labor market. It helps to strike a balance between individuals who seek very high pay and employers who still cannot pay a lot, as their company will become completely unprofitable. For this purpose, differentiation of salaries by groups of employees is carried out.
5. Social. This function, as a rule, continues and complements the reproductive one. This means that wages should not only help to replenish the workforce, but also enable employees to use the basic social benefits: raising children, education, rest, treatment, cash security after retirement.
6. Production share. This function affects the extent to which living labor is involved in the pricing of services and goods, and what is its share in costs and production, and labor. She is important. It determines the cheapness of the labor force or its high cost in the labor market, its ability to compete. In this case, the lower and higher limits of the established value are strictly observed. In the production-share function, through the system of salaries, bonuses, allowances, through the procedure for their accrual, all previous wage functions are implemented.
