A disadvantagages of an hourly wage plan is that it?
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1. Number of hours worked by the employees:
An employee is paid according to the number of hours he works in the workplace. Salaried employees have fixed salary per month as it does not depend on the number of hours they work.
But, workers working on an hourly wage rate basis have to work for extra time to earn that extra income.
2. No guaranteed salary per month:
Employees working on an hourly wage rate basis do not have any fixed income. These employees have to work extra hours to get that extra income.
If these employees have to meet an extra expense any month then they will have to spend extra hours at the workplace and meet their requirements.
3. Lesser amount of extra work time:
Employees when work for overtime they are given extra money. Employees working on an hourly wage rate are also given extra money, but they don’t get a salary equivalent to the salaried employees.
Salaried employees are paid more salary because they are more qualified than the employees working on an hourly wage rate.
4. Wages are lost when an employee is absent due to medical reasons:
Medical emergencies can be faced by any individual any time. Employees working on an hourly wage rate when make themselves absent, then the wages earned by them are also lost and their monthly income schedule is also
lost.
hope this help you
An employee is paid according to the number of hours he works in the workplace. Salaried employees have fixed salary per month as it does not depend on the number of hours they work.
But, workers working on an hourly wage rate basis have to work for extra time to earn that extra income.
2. No guaranteed salary per month:
Employees working on an hourly wage rate basis do not have any fixed income. These employees have to work extra hours to get that extra income.
If these employees have to meet an extra expense any month then they will have to spend extra hours at the workplace and meet their requirements.
3. Lesser amount of extra work time:
Employees when work for overtime they are given extra money. Employees working on an hourly wage rate are also given extra money, but they don’t get a salary equivalent to the salaried employees.
Salaried employees are paid more salary because they are more qualified than the employees working on an hourly wage rate.
4. Wages are lost when an employee is absent due to medical reasons:
Medical emergencies can be faced by any individual any time. Employees working on an hourly wage rate when make themselves absent, then the wages earned by them are also lost and their monthly income schedule is also
lost.
hope this help you
Answered by
0
hiya here's your answer -
Hourly employees generally earn significantly less than their salaried counterparts do. This enables the company to achieve its goals at a lesser cost. The exception would be hourly-wage employees who are better paid and consistently work overtime hours. However, an employee who earns an hourly wage of $9 has an overtime pay rate of only $13.50. This is much less than what the company would pay a salaried manager.
Businesses perceive hourly workers as less valuable, and easier to replace, than management. However, low-paid employees may be less motivated to stay with the company once they achieve a higher level of expertise. The loss of knowledgeable and experienced employees results in lower productivity and possibly lowers profits for the company.
Benefits Package
Businesses offer hourly employees a reduced benefits package, compared to what executives receive. Hourly employees pay toward their health insurance premiums and may have a lower-quality healthcare plan that limits doctor options and patient choices. Some companies give hourly employees only one or two weeks' vacation each year and may restrict the available dates. The lesser offerings to hourly workers save the company money only if they can retain their staff; recruitment and training of replacement employees cut into any potential savings
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Small Business»Business Planning & Strategy»Business Goals»
The Advantages & Disadvantages of Hourly Wages
by Diane Perez; Updated June 29, 2018

The two main categories of employees are salaried and hourly wage. Employers usually classify nonmanagement positions as hourly wage. Salaried employees earn a set pay per week or per month, regardless of how few or how many hours they work. Hourly employees earn pay only for the number of hours they work, and this method has advantages and disadvantages for employer and employee.
Annual Pay
Hourly employees generally earn significantly less than their salaried counterparts do. This enables the company to achieve its goals at a lesser cost. The exception would be hourly-wage employees who are better paid and consistently work overtime hours. However, an employee who earns an hourly wage of $9 has an overtime pay rate of only $13.50. This is much less than what the company would pay a salaried manager.
Businesses perceive hourly workers as less valuable, and easier to replace, than management. However, low-paid employees may be less motivated to stay with the company once they achieve a higher level of expertise. The loss of knowledgeable and experienced employees results in lower productivity and possibly lowers profits for the company.
Benefits Package
Businesses offer hourly employees a reduced benefits package, compared to what executives receive. Hourly employees pay toward their health insurance premiums and may have a lower-quality healthcare plan that limits doctor options and patient choices. Some companies give hourly employees only one or two weeks' vacation each year and may restrict the available dates. The lesser offerings to hourly workers save the company money only if they can retain their staff; recruitment and training of replacement employees cut into any potential savings.
Contracts
Unlike their European counterparts, hourly employees in the United States rarely have work contracts, especially in states with right-to-work laws. While state and federal laws regulate safety conditions, minimum wage, abuse, unpaid work and other employment situations for hourly employees, these employees can be dismissed without cause regardless of their length of employment. The reverse is also true: Your employees can quit their jobs without giving notice, resulting in a negative impact on your company.
Job Security
Hourly employees may feel less secure in their jobs, especially if you schedule full-time workers for less than 40 hours. While managers earn the same amount of money regardless of company slowdowns, hourly employees suffer when they work fewer hours. The company saves money by not paying them when there is no work to do, but it also takes the chance that another business will hire away its most talented workers.
Hourly employees generally earn significantly less than their salaried counterparts do. This enables the company to achieve its goals at a lesser cost. The exception would be hourly-wage employees who are better paid and consistently work overtime hours. However, an employee who earns an hourly wage of $9 has an overtime pay rate of only $13.50. This is much less than what the company would pay a salaried manager.
Businesses perceive hourly workers as less valuable, and easier to replace, than management. However, low-paid employees may be less motivated to stay with the company once they achieve a higher level of expertise. The loss of knowledgeable and experienced employees results in lower productivity and possibly lowers profits for the company.
Benefits Package
Businesses offer hourly employees a reduced benefits package, compared to what executives receive. Hourly employees pay toward their health insurance premiums and may have a lower-quality healthcare plan that limits doctor options and patient choices. Some companies give hourly employees only one or two weeks' vacation each year and may restrict the available dates. The lesser offerings to hourly workers save the company money only if they can retain their staff; recruitment and training of replacement employees cut into any potential savings
Skip to main content.
Small Business»Business Planning & Strategy»Business Goals»
The Advantages & Disadvantages of Hourly Wages
by Diane Perez; Updated June 29, 2018

The two main categories of employees are salaried and hourly wage. Employers usually classify nonmanagement positions as hourly wage. Salaried employees earn a set pay per week or per month, regardless of how few or how many hours they work. Hourly employees earn pay only for the number of hours they work, and this method has advantages and disadvantages for employer and employee.
Annual Pay
Hourly employees generally earn significantly less than their salaried counterparts do. This enables the company to achieve its goals at a lesser cost. The exception would be hourly-wage employees who are better paid and consistently work overtime hours. However, an employee who earns an hourly wage of $9 has an overtime pay rate of only $13.50. This is much less than what the company would pay a salaried manager.
Businesses perceive hourly workers as less valuable, and easier to replace, than management. However, low-paid employees may be less motivated to stay with the company once they achieve a higher level of expertise. The loss of knowledgeable and experienced employees results in lower productivity and possibly lowers profits for the company.
Benefits Package
Businesses offer hourly employees a reduced benefits package, compared to what executives receive. Hourly employees pay toward their health insurance premiums and may have a lower-quality healthcare plan that limits doctor options and patient choices. Some companies give hourly employees only one or two weeks' vacation each year and may restrict the available dates. The lesser offerings to hourly workers save the company money only if they can retain their staff; recruitment and training of replacement employees cut into any potential savings.
Contracts
Unlike their European counterparts, hourly employees in the United States rarely have work contracts, especially in states with right-to-work laws. While state and federal laws regulate safety conditions, minimum wage, abuse, unpaid work and other employment situations for hourly employees, these employees can be dismissed without cause regardless of their length of employment. The reverse is also true: Your employees can quit their jobs without giving notice, resulting in a negative impact on your company.
Job Security
Hourly employees may feel less secure in their jobs, especially if you schedule full-time workers for less than 40 hours. While managers earn the same amount of money regardless of company slowdowns, hourly employees suffer when they work fewer hours. The company saves money by not paying them when there is no work to do, but it also takes the chance that another business will hire away its most talented workers.
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