Methods of wage/salaries determination in Uganda

1. Collective bargaining. This  refers  to round  table  negotiations   between  the  representatives    of the trade  union  and  the  employer   aimed  at  improving   wages  and  other  working   conditions    of  the workers.   The  stronger  the  trade  union,  the higher  the wage  and  the weaker   the  trade  union,  the lower  the wage
2. Government wage determination. This is where the government   sets the wage which   is to be paid to the employees by the employers.    This can either be a minimum wage or maximum   wage.

(a) Minimum   wage legislation (wage floor).This   is where the government   sets a wage above  the equilibrium   wage  below  which  the  employer  is not  allowed  to pay  the workers.   This is done to protect the workers from being exploited by the employers.

(b) Maximum wage legislation (Wage ceiling).This is where the government   sets a wage below the equilibrium   wage  above  which  the  employer  is not  allowed  to pay  the  workers.   This  is done  to protect  the employers  from  being  exploited  by the workers,  especially  through  their  trade  unions.

Note.   For the implications   of fixing maximum   and minimum   wages, relate to the effects of fixing maximum   and minimum prices.

3. Piece rate. This  is where  wages  are paid  according  to the amount  of work  done  by the  employee for example  10,000/=  for 2000 bricks  made.   This is common with unskilled   labour.
4. Time rate. This is where wages are paid to employees  according   to the number   of hours worked for example 1000/= per hour, 1O, 000/= per day or 500,000/- per month.   This is common with skilled labour.
5. Signing contracts between   employers   and employees.    In this case, contracts   are signed which specify the wage to be paid to the employee for a given time.
6. Wage leadership. This  is where  small  firms  set their  wages  following   the  wages  paid  by  large firms  to  their  workers.     Therefore   large  firms  determine   the  wage  which   is  to  be  paid  to  the workers  by small  firms.
7. Market forces of demand and supply of labour. This is where the wage paid to the employees   is determined by the market forces of demand and supply in the labour market.
8. Individual bargaining.  This  is where  individual   workers  bargain  with  employers   the  wage  they are supposed  to be given  in a given  time.

Note

(a)  Wage freeze.  This  is where  the  government   directly  and deliberately   keeps  down  the wages  paid to  the  workers   for  some  time  to  check  on  the  aggregate   demand   and  control   inflation   in  the economy.

(b)  Wage restraint. This is where the government   indirectly   influences   private   employers   and trade unions  to keep  down  the  wages  paid  to the workers  to check  on aggregate   demand   and  control inflation  in the economy.