Proceedings of the 5th International Conference on New Trends in Management, Business and Economics
Year: 2023
DOI:
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The Fair Wage Model in Determining the Bonus Fund for Employees from the Perspective of the Company’s Periodic Performance
Jurij Renkas
ABSTRACT:
The perception of accounting as a theory and system of measuring the economic quantities that characterize the activities of an economic entity made it possible to reveal its significant role in the analysis of these quantities and the development of the function of economic activity (FEA). According to this function, the production process, which ends in a market exchange, can be described by a function of several variables, taking into account the fact that production factors are concentrated in a product according to the principles of cost accounting. The idea of the FEA derives from cost accounting, from its algebraic description. In this calculus we can find all the necessary variables. The starting point for the development of the function of economic activity (FEA) is the representation of the production process in realization prices as a function of production costs. Among other things, the model makes it possible to determine the real level of use and payment of human capital in the enterprise. The variables by which intellectual capital and institutional capital are measured are the labor productivity index Q and the management variable M. Also from the FEA model, a formula is obtained for calculating the general fund for paying labor in the enterprise, as a function of the data that characterize the economic performance of the entity, as well as the bonus fund, consistent with the results achieved. With its help, it is possible to analyze the level of management, as well as the system of paying labor, in each enterprise and, based on the set parameters, calculate the corresponding values for the next year. A general relationship is manifested here: the higher the level of labor productivity Q in an enterprise, the higher the level of labor payment should be. By predicting the appropriate level of the labor productivity index Q for the next year on the basis of the model of the economic activity function, it is possible to estimate the size of the future wage fund (including bonus wages). For this purpose, you can use the variable Q, as well as the management variable M. They are the basis for managing wages in the enterprise.
keywords: economic activity function, human capital, economic constant