In other words, salaries correspond to time wages and fees to piece wages.
It would be out of place in an article of this kind to discuss the many problems of an economic character which the question of the remuneration of labour, the constituent parts of labour, and the relationship of labour to the State, present. So far as the business man is concerned the subject of wages presents many interesting features which are quite worthy of consider ation, apart from the academic importance of the subject.
In connection with accounts, the term " wages " should be used only when the remuneration of productive workers is intended to be referred to, " salaries " being the proper designation of the amounts paid for services rendered by other employees. It may be said that the foreman, for instance, of a large manufacturing establishment does not actually produce anything, but the remuneration of such a person is almost without exception included under the heading of " wages," because his services are absolutely necessary in the supervision of the producers; so that the general outline which has been indicated above must be slightly enlarged to this extent, and the remuneration of productive workers may he called "direct wages," while the amounts paid for the supervision of such workers may be shown under the heading of " indirect wages." In small businesses, where the proprietor or manager is able to keep all important matters under his own control, the question of wages presents very little difficulty. All the employees will probably be known by a number, and there can be no question of any risk of fraud in that direction ; but when the case of large establishments, and particularly large manufacturing firms, comes to be considered the matter is one which requires very careful consideration.
In the large majority of cases it is probable that the wages are based upon time, or at any rate the time served will occupy a prominent place in the basis of calculation. It is important, therefore, at the outset that the recording of time should be performed in a scientific and satisfactory manner. It is not too much to say that the duty of recording the time of each work man is one that requires the greatest care, and, bearing this in mind, it is not surprising to discover that often where many loose ends may be found in the organisation of a manufacturing establishment the time office is usually well organised. The old-fashioned method of recording lies in the direction of the use of metal checks or discs bearing numbers which relate to each workman, and each are dropped into a box or other receptacle as the workmen arrive on the premises, being afterwards sorted out by the time keeper and recorded in a proper register. This method, while having the advantage of being inexpensive, is by no means satisfactory in other respects, for the risk of impersonation is by no means small, and the record is thereby to a certain extent unreliable. Under the modern system the use of time
recording clocks has reduced this risk to a very great extent. There are many instruments on the market, and in most cases each workman records the exact time of his arrival and departure by either one mechanical means or another, such as the insertion of a key in a special slot or the pressing of a lever through a pierced number ; but in all cases the result is to create a register by self-acting agencies in such a manner as to avoid any possibility of dispute. The record is removed at a fixed time and any late-comers registered on a separate sheet, being subsequently called upon for explana tion if necessary. Absentees will be duly noted, and the records of these time machines will be used as a basis for the purpose of writing up either the actual wage sheet, or at any rate the time sheet. The time of the various foremen, other officials, and the clerical staff is usually separately recorded, and except where the staff is very large an ordinary signature book will be all that is required. The actual wages sheet should be written up in a department specially devoted to the preparation and payment of wages, extensions being made by a person other than the clerk who actually writes up the details, the extensions being checked by a third party; and, in order to avoid any risk of fraud, the actual payment should again be made by an independent person. The methods of payment vary in almost every case, and it would be impossible to describe them in detail in these pages, for usually such a system is adopted in each instance as is best calculated to meet particular needs. The main object to be borne in mind in connection with the subject of wages is that by the passing of the record through as many hands as possible any collusion on the part of employees is made much more difficult than if the whole of the matter were under the control of one person. The preparation and payment of wages lends itself so much to the risk of fraud, that the utmost precaution cannot be considered excessive. It is quite a common practice for some responsible official to pay surprise visits to the wages office and make the actual payment himself, or an abso lutely independent person, such as the firm's accountant, is instructed to perform this duty at intervals and without warning to the wages clerks. Even where the exigencies of the business will not permit a special staff to be detailed to deal with the question of wages, the precautions which have Leen indicated should nevertheless be adopted, for if there is any looseness in the system at all it may be taken for granted that, sooner or later, fraud or misappropriation will follow.