Principle of Remuneration

Answer: Remuneration is the fair price paid to employees for their services, and Fayol’s principle says it should be fair and satisfactory to both employees and the organisation.

This is one of Henri Fayol’s 14 principles of management. Wages and salaries should be decided after considering the cost of living, the nature of work, the paying capacity of the business and the rates in similar industries. Fair pay keeps employees satisfied and motivated, increases productivity and reduces labour turnover and disputes. Monetary rewards may be supported by non-monetary incentives such as recognition and promotion.