Anyone joins the organization and works there with the objective of earning his bread and butter. The wages or salary which he earns for his work enables him/her to fulfill the basic needs and there requirements of life. The Remuneration must be in equality with the work done by the employees. This will motivate him to perform better and become loyal to the organization.
Fayol’s principle of management has been respected by management gurus everywhere. The principle of remuneration comes as number seven of the fourteen principles.
The principle of remuneration comprises of salary plus other compensations in the form of commission on the work done. Thus while the salary is fixed, the remunerations can vary according to the quality and the quantity of work done.
a fair wage system is one of which guarantees that both the employer and employee will be satisfied. The owner in the guarantees due to which both the employer and the employee will be satisfied. The owner in the term of the work completed by an individual employee who in turn will be received by him/her.
Thus the seventh principle enunciated by Fayol brings about a cordial atmosphere in the organisation. It also leads to better work environment.
Positive Impacts of this principle:
- It creates better relations between workers and management.
- Employees get motivated.
- It reduces the turnover rate of the employees.
- When employees feel satisfied with their salary / remuneration they contribute there best effort.
- This raises the standard of living of the employees.
- Finally It develops the society as a whole.
Consequences of the violation of this principle:
- The efficiency of the employees decreases.
- Conflict between the management and employees spoils the work environment.
- The attrition rate or turnover rate increases.
- The immediate result is incomplete work and general dissatisfaction.
- Finally it becomes hard to achieve the organizational objectives.
