Five Disadvantages of the Time-basis Method of Labour Remuneration
1. Lack of Motivation: Since employees are paid based on the time they spend at work, rather than the amount of work they complete, they may lack the motivation to work efficiently or quickly.
2. Inequality: It doesn't take into account the different skills, efforts, or productivity levels of different employees. Two employees who work the same hours might be paid the same, even if one is more productive or skilled than the other.
3. Increased Costs: If employees work slowly or inefficiently, it can lead to increased labour costs for the company. The company is essentially paying for time, not output.
4. Difficulty in Cost Control: It's hard for a company to control costs because it's not directly tied to productivity. If a task takes longer than expected, the company has to pay for the extra time.
5. Less Competitive: Companies using this method may find it harder to compete with companies that pay based on productivity or performance, as their labour costs may be higher.