Understanding The Importance Of Wage Protection Systems For Organizational Productivity

August 1, 2021

Sometimes setting up and running a business in the UAE can be a complex task- especially with the need to comply with all legal requirements. The WPS (Wage Protection System) is one such legal requirement approved by the UAE government in 2009 to protect employees of an organization. WPS was introduced to ensure that organizations pay their employees the correct amount that matches the initial offer letter and local labour contract. 

If your business has employees in the UAE, it is a mandatory requirement for your business to pay them through WPS. This article will give a clear overview of the importance of WPS for organizational productivity. 

Supports effective HR decision making 

As WPS is a mandatory requirement, it will keep an organization bound to relevant payroll compliance, which can help your businesses constantly be aware of the nature and status of the payroll functions in your organization. These duly updates and other apt HR systems can help your business make efficient and effective decisions regarding HRM and payroll and even aid you in grabbing any favourable labour market opportunities, thereby boosting organizational productivity. 

When payroll is maintained through a system, the time taken to produce appropriate payroll statements, process, and verify them can all be less efficient or even be approached in a care-free manner. As a result, they are not bound to compliance, significantly reducing organizational productivity. This can also very well put off or delay certain HR or payroll decision-making that can aggravate any unfavourable conditions that need an immediate call-to-action. 

Improves employee satisfaction 

Employee satisfaction, also known as “employee engagement,” is a key indicator of organizational productivity. A WPS legally binds your business to pay employees according to the employee contract and the salary due date. If you fail to pay your employees within the ten days of the salary due date, you may receive a fine and receive a restriction on visa processing for new employees if payments are further delayed. Firstly, this legal requirement keeps your HR and payroll functions more streamlined, efficient, and organized to make payouts for employees duly, thereby boosting organization productivity. Secondly, when employees receive payouts without delay and are aware that they are governed under fair labour laws, it increases the level of employee satisfaction at your workplace- thereby yet again boosting organizational productivity. 

Avoids disagreements 

Disagreements regarding payroll processing and rectifying payroll errors can result in many inefficiencies in your organization and impact your organizational productivity. While appropriate HR software can help you increase the accuracy of payroll processing, the WPS adds a greater level of reliability as legal authorities govern it. In addition, this allows you to better outline an employee’s rights through transparent information regarding wages in the event there are any disagreements or disparities regarding payroll processing. 

And as a legally governed system, WPS is also naturally free from discrepancies or fraud. All these effects of WPS effectively help your business reduce labour disagreements or troubles and support a healthy and efficient work environment that boosts organizational productivity. 

If you have any more questions regarding the WPS system in UAE or any other related government liaison matter in Dubai, contact us at EmiratesHR. As one of the pioneers in providing custom-made HR systems to enhance organizational productivity, we offer the most suitable range of solutions and services for all your precise HR requirements.