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Wages and incomes: Wages systems and composition of pay

From the employers' point of view, wages should be fixed in such a way that they maximize labour productivity, both in terms of quantity and quality. For this purpose, many wage systems are used, often leading to a very complex structure or composition of pay. Businesses aim at increasing the pace of work individually, for a team or a whole enterprise, or aim at retaining the workforce by reorgainzing seniority. On the other hand, some wage systems may have a considerable negative impact on the working conditions of workers concerned. Convention No. 95 and Recommendation No. 85 on the protection of wages develop some instruments which are useful for this purpose.

Updated by C.McC. Approved by FE. Last update: 17 January 2005.