1. PAYMENT SYSTEMS AND WORKING HOURS
CHAPTER 5

2. INTRODUCTION
In order to attract workers and to retain the best performers, employers need to have a compensation system that will achieve their objectives.
Furthermore, employers need to comply with the relevant laws which relate to payment systems and hours of work.

3. WAGE AND PAYMENT SYSTEMS
THE REMUNERATION PACKAGE
Basic Wages
Benefits
Incentives

4. GOALS OF A WAGE SYSTEM Attract employees to work in the organization
Retain efficient employees
Motivate employees to perform effectively
Establish a simple system that is easy to administer

5. WAGE SYSTEMS There are 2 major systems of payment:
Time-related systems
Piece-rated systems

6. 1) Time-related systems
Wages are paid for a set period of work on an hourly, weekly or monthly basis.
The pay varies with the number of hours worked and not with the output.

7. ADVANTAGES They are easy to understand and administer
The worker is assured of a steady income

8. DISADVANTAGES
No relationship between effort and reward

9. Examples:
Plantations and manufacturing workers are being paid based on a daily rate.
Office workers receive monthly-rated pay.

10. 2) Piece-rated/ Piece-work systems or payment by result
Workers are paid according to the number of units produced in given time.
To encourage workers to produce at maximum levels, progressively higher rates may be paid for higher levels of output.

11. ADVANTAGES Workers will be self-motivated
Workers put in their best effort in order to increase their pay packet

12. DISADVANTAGES
Workers do not necessarily attempt to maximize their earnings
The quality of output may be affected

13. FACTORS AFFECTING LEVELS OF PAY
Legislation and government policy
Unions
Selection policy
Employment conditions
Company profitability

14. FACTORS AFFECTING INDIVIDUAL LEVEL OF PAY
Seniority
Increase in the cost of living
Performance
Degree of skill

15. LEGISLATION RELATING TO PAYMENT OF WAGES
The Employment Act
The Sabah Labor Ordinance
The Sarawak Labour Ordinance
The Wages Councils Act

16. CHOOSING A WORKING HOURS SYSTEM
Factors:
The legal constraint
The effect on the efficiency of the workers of a particular system
The effect on the motivation of the workers
The type of system being used by a majority of employers in comparable organizations and in the same locality

17. CHOOSING A WORKING HOURS SYSTEM
Non-traditional working hours can provide benefits to both employers and employees.
In a tight labor market, work sharing, flexitime systems, part-time shifts and the compressed work week are examples of systems which can help to recruit employees

18. OVERTIME WORKING
The Employment Act stipulates that no worker can be required by his employer to work more tan 8 hours per day or 48 hour per week.

19. OVERTIME WORKING Except for:
Accident, actual or threatened, in or with respect to the employee’s place of work
Work, the performance of which is essential to the life of the community
Work essential for the defense or security of Malaysia
Urgent work to be done to machinery or plant
An interruption of work which it was impossible to foresee
Work to be performed by emplyees in an industrial undertaking essential to the economy

20. OVERTIME RATES
Overtime worked on an Ordinary Working Day = 1 ½ times the normal hourly rate
Overtime worked on a Rest Day = 2 times the normal hourly rates
Overtime worked on a Public Holiday = 3 times the normal hourly rate

21. REASONS FOR OVERTIME A temporary shortage of manpower
A temporary increase in workload
Low productivity of the workers
Difficulty in recruiting additional workers

22. PROBLEMS CAUSED BY EXCESSIVE OVERTIME
Increased cost
Effect on morale effect on productivity
Effect on productivity

23. STEPS TO REDUCE OVERTIME WORK
Keeps records
Recruiting new staff
Improving supervision and training
Investment in new technology
Changing the mode of payment

24. SHIFT WORK SYSTEMS Shift work involves:
Hours of work, which include hours outside the ‘normal’ or traditional 8 to 4, or 9 to 5 pattern
2 or more groups of workers who take turns to man the workstations

25. SHIFT WORK PATTERNS Double-day shifts: Shift I – 7.00am – 3.00pm
Shift II – 3.00pm – 11.00pm

26. SHIFT WORK PATTERNS Three-shifts day: Shift I – 7.00am – 3.00pm
Shift II – 3.00pm – 11.00pm
Shift III – 11.00pm-7.00pm

27. SHIFT WORK PATTERNS The split shift:
Involves working several hours early in the morning, having time off and then continuing the same shift later in the day

28. SHIFT WORK PATTERNS Rotating and permanent shift:
System whereby an individual worker, if he is on a double-day system, alternates between the first and second shift on regular basis.

29. JUSTIFICATION FOR SHIFT WORK
4 common situations in which shift work is found:
Service-oriented industries
Production technologies is that the machinery needs to be run continuously without a break.
Maximize the productive use of plant and machinery
Consumer service

30. THE PROBLEMS CAUSED BY SHIFT WORK
Women and night work
Increase in cost
Workers’ health
Stress and psychological problems