The method in which workers are employed on monthly basis (Time rate system), is called as direct employment. Such workers are taken on the roll of the organisation and they are paid on monthly basis. Management is responsible for the quality and quantity of work performed by such direct labour. This method is suited particularly in case of employing persons to the positions like drivers, electricians, operators, etc.


Advantages

  • Under this system of wages the employer buys the time of the workers and not the output.

  • The remuneration is paid on the basis of the number of hours of work put in and not on the basis of production.

  • In this system there is less chance of dispute about the amount of payment.

  • It gives security to the workers because they get the wages at the end of the prescribed period, irrespective of whether he actually does work or otherwise.

  • Quality of work can be improved as there is no hurry about the completion of the job.

  • There is no rough handling of materials, tools and machinery.

  •  Interruption in work does not put workers at loss.



Disadvantages

  • In case the worker works slowly the employer is put to loss.

  • It requires strict supervision.

  • This system tends towards higher cost of construction.

  • This system is not useful in case there are lazy workers.

  • Efficient workers never get encouragement.

  • This system of employment is adopted when quality is more important than quantity.

  • When the workers output cannot be measured satisfactorily, this system is suitable.

  • Workers in same grade receive almost the same salary.