Some issues in improving the organization of labor remuneration system in the construction sector of Georgia

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Date
2018
Journal Title
Journal ISSN
Volume Title
Publisher
Ivane Javakhishvili Tbilisi State University Press
Abstract
At every stage of economic activity, it is important for a businessman, when formulating a business strategy, to answer questions - how much profits are produced at a certain level of sales, also, about the minimum sales volume needed to ensure profitability, stability and growth of the company. CVP (Cost-Volume-Profit) analysis is one of the most effective methods of strategic analysis. One of the objectives of the CVP analysis is to determine an optimal proportion of the fixed and variable costs of the organization in such a way as to minimize business risk. In the formation of the expenditure policy in the construction sector in Georgia, it is necessary to keep proper proportion between the time and piece wages in the salary schedule, so that the company can maintain financial stability even under unstable dynamics of the sales. The best way is to use the Hay`s profile spreadsheet method (grading system) for administrative and support staff, and lump sum salary for the builders, which is the most flexible form of remuneration in terms of variable sales.
Description
1. Michael E. Cafferky and Jon Wentworth, Breakeven Analysis: The Definitive Guide to Cost-Volume-Profit Analysis, Business Expert Press, 2010, 172 p. 2. М.К. Санин, Управленческий учёт, Спб ГУ ИТМО, 2014, 88 стр. 3. Бочаров В.В., Финансовый инжиниринг, Спб Питер, 2004, 400 стр. 4. თ. კაჭახიძე, შრომის ბაზარი საქართველოში, ჟურნალი „Forbes“, 2014, მაისი. 5. www.geostat.com
Keywords
CVP Analysis; marginal income; break-even point; operational leverage; margin of safety
Citation
III International Scientific Conference: "Challenges of Globalization in Economics and Business", Tbilisi, 2018, pp. 366-369
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