This document discusses compensation differentials across industries. It notes that software, financial institutions, and consultancies pay the highest, while manufacturing, consumer durables, and pharmaceuticals pay lower. Industry characteristics like scarce skills or fixed costs impact pay. Larger organizations tend to pay higher wages to attract talent. Low-paying employers adjust pay based on labor demand, narrowing differentials in upswings. Compensating differentials provide incentives for undesirable jobs through higher pay. Government regulation can benefit workers by reducing risks, though costs must be weighed. Employee and employer preferences also impact compensation packages.
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Disclaimer: We do not encourage illegal activity. References to a content protected by the copyright law, are given exclusively in the fact-finding purposes. If you liked the program, music or the book – buy it.
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Disclaimer: We do not encourage illegal activity. References to a content protected by the copyright law, are given exclusively in the fact-finding purposes. If you liked the program, music or the book – buy it.
This work is aimed at identifying causal factors of attrition & retention and to produce a predictive model that could help to plan reduced attrition and increased retention at management level. This study is triggered due to high attrition scenario in BTO. Key points of this work are
• Attrition & Retention are mutually exclusive, having different set of factors
• A combination Herzberg’s Dual Factor Theory of Motivation, Hackman & Oldham’s Job Characteristic Model and ASA frame work helps best to model the current attrition in the industry.
• There are 8 set of factors which explains attrition and 4 set of factors which explains retention
A combination of Employee Motivation, Employee Satisfaction, Employee Involvement & Life Interest and Work Compatibility ensure prolonged association of an employee to an Organization
Analysis of the Equity and job Satisfaction at the Workplace- Implementation ...AI Publications
The aim of this research was to examine the relationships between employee perception of equity and job satisfaction in the Erbil private banks. Data were gathered using a face-to-face survey of 119employees at five private banks inErbil. The findings showed that there is a significant and positive relationship between affirmation action with job satisfaction, there is a significant and positive relationship between affirmation action with job satisfaction and there is no a significant and positive relationship between embracing diversity with job satisfaction in private banks in Erbil.
Note: If this publication all links are dead, but you need to download files from this publication, please send me a private message and I'll try to help you or emai to info@presslounge.vn for supporting
Disclaimer: We do not encourage illegal activity. References to a content protected by the copyright law, are given exclusively in the fact-finding purposes. If you liked the program, music or the book – buy it.
Note: If this publication all links are dead, but you need to download files from this publication, please send me a private message and I'll try to help you or emai to info@presslounge.vn for supporting
Disclaimer: We do not encourage illegal activity. References to a content protected by the copyright law, are given exclusively in the fact-finding purposes. If you liked the program, music or the book – buy it.
This work is aimed at identifying causal factors of attrition & retention and to produce a predictive model that could help to plan reduced attrition and increased retention at management level. This study is triggered due to high attrition scenario in BTO. Key points of this work are
• Attrition & Retention are mutually exclusive, having different set of factors
• A combination Herzberg’s Dual Factor Theory of Motivation, Hackman & Oldham’s Job Characteristic Model and ASA frame work helps best to model the current attrition in the industry.
• There are 8 set of factors which explains attrition and 4 set of factors which explains retention
A combination of Employee Motivation, Employee Satisfaction, Employee Involvement & Life Interest and Work Compatibility ensure prolonged association of an employee to an Organization
Analysis of the Equity and job Satisfaction at the Workplace- Implementation ...AI Publications
The aim of this research was to examine the relationships between employee perception of equity and job satisfaction in the Erbil private banks. Data were gathered using a face-to-face survey of 119employees at five private banks inErbil. The findings showed that there is a significant and positive relationship between affirmation action with job satisfaction, there is a significant and positive relationship between affirmation action with job satisfaction and there is no a significant and positive relationship between embracing diversity with job satisfaction in private banks in Erbil.
International Journal of Business and Management Invention (IJBMI) inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Kindly find this paper useful in all fields, you can as well share the resource with friends in all learning institutions. This is entirely the my original work. The paper will also be useful in fields like medicine, law and social science.
Move from industrial to employment relations revisedmusyokasaff
Kindly find this paper useful in all fields, you can as well share the resource with friends in all learning institutions. This is entirely the my original work. The paper will also be useful in fields like medicine, law and social science.
This SHRM article —is primarily for the benefit of HR professionals who are not compensation specialists—discusses all the steps involved in developing and implementing a market-based pay structure. It refers to but does not include a detailed discussion of job evaluation or of other internally focused methods of setting base pay.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
This PPT contains about wage differentials or compensating differentials. it is an HR concept. it has meaning, reason, factors, types, and determinants of inter and intra industry wage differential.
A STUDY ON PERFORMANCE MANAGEMENT IN BMTC WITH SPECIAL REFERENCE TO DIVISIONSIAEME Publication
A financial performance management is essential for every company to know the position of the business in this competitive world which helps them to analyse their strength and weakness. It analyses four years of data. This research study has been done with regards to divisions of BMTC in Bangalore. For the study purpose, secondary data have been collected from the annual report of these divisions for the period of four years starting from 2017-2020. Data has been analysed by applying one-way ANOVA. From the analysis, it has been concluded that there is a statistically significant difference in financial performance of these divisions based on the components like kilometre per litre top up oil, Total Vehicles, average vehicles on road and staff productivity of different zones. The expenses incurred with different zones have been analysed. It has been found from the study BMTC remains in standing Position compared to all other divisions between East, west, north, south and central zones. This also helps us to analyse the revenue and expenditure of the BMTC which gives information about financial health.
This research investigates the determinants of the capital structure of firms listed service sector on BIST(Borsa Istanbul) and the adjustment process towards this target. The econometric analysis employs the Generalized Method of Moments estimators (GMM-Sys, GMM difference) techniques that controls for unobserved firm-specific effects and the endogeneity problem. The findings of the paper suggest that firms have target leverage ratios and they adjust to them relatively fast. Consistent with the predictions of capital structure theories and the findings of the empirical literature, the results of this paper suggest that size, assets tangibility, profitability, growth opportunity except earnings volatility have significant effects on the capital structure choice of hotels and restaurants.The capital structure or leverage is measured by total debt ratio. Analysis results indicates that firms with high profits, sizable, high fixed assets ratio and high total sales and more growth opportunities tend to have relatively less debt in their capital structures.
Most public hospitals have been facing the shortage and migration of doctors in the health market in
the context of global integration and the development of the private economic sector in Vietnam. The public
hospital system focuses on developing high-quality and stable human resources. Human resources development
that must be linked to organizational performance is a challenge for policy makers and hospital managers. This
study uses 246 doctor survey data and applies a Linear Structural Model in the analysis
International Journal of Business and Management Invention (IJBMI) inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online
Kindly find this paper useful in all fields, you can as well share the resource with friends in all learning institutions. This is entirely the my original work. The paper will also be useful in fields like medicine, law and social science.
Move from industrial to employment relations revisedmusyokasaff
Kindly find this paper useful in all fields, you can as well share the resource with friends in all learning institutions. This is entirely the my original work. The paper will also be useful in fields like medicine, law and social science.
This SHRM article —is primarily for the benefit of HR professionals who are not compensation specialists—discusses all the steps involved in developing and implementing a market-based pay structure. It refers to but does not include a detailed discussion of job evaluation or of other internally focused methods of setting base pay.
International Journal of Business and Management Invention (IJBMI)inventionjournals
International Journal of Business and Management Invention (IJBMI) is an international journal intended for professionals and researchers in all fields of Business and Management. IJBMI publishes research articles and reviews within the whole field Business and Management, new teaching methods, assessment, validation and the impact of new technologies and it will continue to provide information on the latest trends and developments in this ever-expanding subject. The publications of papers are selected through double peer reviewed to ensure originality, relevance, and readability. The articles published in our journal can be accessed online.
The Journal will bring together leading researchers, engineers and scientists in the domain of interest from around the world. Topics of interest for submission include, but are not limited to
This PPT contains about wage differentials or compensating differentials. it is an HR concept. it has meaning, reason, factors, types, and determinants of inter and intra industry wage differential.
A STUDY ON PERFORMANCE MANAGEMENT IN BMTC WITH SPECIAL REFERENCE TO DIVISIONSIAEME Publication
A financial performance management is essential for every company to know the position of the business in this competitive world which helps them to analyse their strength and weakness. It analyses four years of data. This research study has been done with regards to divisions of BMTC in Bangalore. For the study purpose, secondary data have been collected from the annual report of these divisions for the period of four years starting from 2017-2020. Data has been analysed by applying one-way ANOVA. From the analysis, it has been concluded that there is a statistically significant difference in financial performance of these divisions based on the components like kilometre per litre top up oil, Total Vehicles, average vehicles on road and staff productivity of different zones. The expenses incurred with different zones have been analysed. It has been found from the study BMTC remains in standing Position compared to all other divisions between East, west, north, south and central zones. This also helps us to analyse the revenue and expenditure of the BMTC which gives information about financial health.
This research investigates the determinants of the capital structure of firms listed service sector on BIST(Borsa Istanbul) and the adjustment process towards this target. The econometric analysis employs the Generalized Method of Moments estimators (GMM-Sys, GMM difference) techniques that controls for unobserved firm-specific effects and the endogeneity problem. The findings of the paper suggest that firms have target leverage ratios and they adjust to them relatively fast. Consistent with the predictions of capital structure theories and the findings of the empirical literature, the results of this paper suggest that size, assets tangibility, profitability, growth opportunity except earnings volatility have significant effects on the capital structure choice of hotels and restaurants.The capital structure or leverage is measured by total debt ratio. Analysis results indicates that firms with high profits, sizable, high fixed assets ratio and high total sales and more growth opportunities tend to have relatively less debt in their capital structures.
Most public hospitals have been facing the shortage and migration of doctors in the health market in
the context of global integration and the development of the private economic sector in Vietnam. The public
hospital system focuses on developing high-quality and stable human resources. Human resources development
that must be linked to organizational performance is a challenge for policy makers and hospital managers. This
study uses 246 doctor survey data and applies a Linear Structural Model in the analysis
An introduction to pitching and presenting from my own experience. These slides were used during a workshop session for SEA XChange Algeria, a social entrepreneurship competition.
Hogyan indíts vállalkozást munka és kisgyermek mellett?Vida Ágnes
Alkalmazott vagy és mellékállásban vállalkoznál? Kisgyermekes anya vagy és fogalmad sincs, mikor szakíthatnál időt a vállalkozásra? Ebből az előadásomból kiderül! (elhangzott az Ecommerce Expon 2016. március 24-én)
Today’s complex environment requires an agile and adaptive planning and decision making model to develop innovative solutions in a world of tight economic coupling, information compression, terrorism and regional uncertainty. At ALIS we have adapted the Design Methodology to enable effective learning, planning and decision making in the challenging world we live in today. In this presentation, Jim Greer introduces Design Methodology. Jim is a nationally recognized facilitator, instructor, and Design expert – applying Design Methodology to complex problems for a wide range of organizations and developing innovative, sustainable solution sets to effect progress toward a desired end state. If you would like to view this presentation with audio, copy and paste the following URL to route directly to this on-demand webcast: http://www.alisinc.com/?q=webcast/introduction-design
Hogyan növeld az értékesítési oldalaid, a honlapod, a hírleveled konverzióját és tegyél szert még több vevőre? Mire kell figyelned? Mit kell beállítanod?
In this short webcast, Jim Greer discusses the benefits of a Strategic Foresight and Scenario-based Planning approach particularly in this dynamic and complex environment. To access this presentation complete with audio, please visit us at www.alisinc.com in our Professional Development tab.
The slide deck accompanying my talk at GeekFtourDZ on 19/07/2014. Presentation was in Darja (Algerian Arabic along with some berber, french/english words) which explains why some of the slides are in arabic. The topic was about optimizing people's performance by living a fully engaged life, inspired by "The Power of Full Engagement", Jim Loehr and Tony Schwartz.
Hogyan alkalmazkodj a marketing trendekhez?Vida Ágnes
Ne tudsz kiigazodni a sok újdonságon? Nem tudod, mit érdemes a stratégiádba illeszteni? Ebben az előadásomban erre a kérdésre adtam választ (elhangzott 2016. februárjában a Magyar Vállalkozónők Kozhasznú Egyesületének konferenciáján)
HR, 3eAngelo S. DeNisi, Ricky W. GriffnThe amount of value.docxwellesleyterresa
HR, 3e
Angelo S. DeNisi, Ricky W. Griffn
The amount of value people create for an organization and what the organization gives them as compensation for that value are important determinants of organizational competitiveness. If employers pay too much for the value created by workers, then profits (and hence competitiveness) will suffer. But if they pay too little or demand too much from their workers for what they are paying, they will suffer in different ways: lower-quality workers, higher turnover, or employee fatigue and stress. Clearly, then, managing compensation and benefits are important activities for any organization. And just as clearly, Nucor managers have a keen understanding of the relationship between worker compensation and company performance.
Compensation and benefits refer to the various types of outcomes employees receive for their time at work. Compensation is the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization. Benefits are the various rewards, incentives, and other items of value that an organization provides to its employees beyond wages, salaries, and other forms of financial compensation. The term total compensation is sometimes used to refer to the overall value of financial compensation plus the value of additional benefits that the organization provides.
Compensationis the set of rewards that organizations provide to individuals in return for their willingness to perform various jobs and tasks within the organization.
Benefitsgenerally refer to various rewards, incentives, and other things of value that an organization provides to its employees beyond their wages, salaries, and other forms of direct financial compensation.
In this chapter, we cover the basic concepts of compensation and benefits. We start by examining how compensation strategies are developed, and then we turn to the administration of compensation programs and how organizations evaluate their compensation programs. We look at benefits, discussing the basic reasons for benefit plans and describing different types of benefit plans typically found in organizations. Next we consider the often controversial topic of executive compensation, discussing the basic components of executive-compensation packages and why they are so controversial. We conclude with a discussion of legal issues associated with compensation and benefits and the ways in which organizations can evaluate their compensation and benefit programs.
9-1 DEVELOPING A COMPRATION STRATEGY
Compensation should never be a result of random decisions but instead the result of a careful and systematic strategic process.3 Embedded in the process is an understanding of the basic purposes of compensation, an assessment of strategic options for compensation, knowledge of the determinants of compensation strategy, and the use of pay surveys.
9-1a Basic Purposes of Compensation
Compensation has several f ...
Unit V Lesson Notes It is understood that a labor union is an.docxmarilucorr
Unit V: Lesson Notes
It is understood that a labor union is an organization that acts as a filter between its members and the organization in which the members are employed. It has also been identified that the main purpose of labor unions is to give employees the opportunity and power to negotiate for better working conditions, decent wages, and other benefits through collective bargaining. Now that the foundation of collective bargaining has been laid, it is now time to look a little further into some of the issues that employees bargain for.
Whether working in a union or non-union environment, what would be one of your major concerns with employment? When addressing this question, many of you would probably state “compensation/wages” would be the main topic of interest. Sure, there are other perks that you would look for; however, most would not consider employment or would consider leaving current employer for better wages.
According to the textbook, “wages and benefits represent the heart of the collective bargaining process. Guarantee of a certain standard of living and a reasonable return for their productive efforts is the major concern for most union members” (Carrell & Heavrin, 2013, p. 278). This second part of this statement can be said to be true for non-union workers as well. Although there are similarities among non-union and union environments, there are differences in how wages and benefits are determined and implemented.
Non-Union Environment: Most non-union employees do not have the opportunity to negotiate their wages. Most of these organizations have a set pay rate or pay range for all positions. Many organizations conduct job analysis and job evaluations to determine appropriate pay rates. When offered a job, some may try to negotiate on the front end with the hiring manager and/or human resources a certain pay rate. Sometimes, the employee does succeed and the organization may meet the applicant half-way or offer a little more to display true interest in the applicant. However, there are some organizations that will not budge and the applicant would be forced to accept or decline the offer. Even if the applicant does accept the offer, there may be limits on how often raises are given or if they are given at all. Based on experience, sometimes the applicant will accept the job and continue to look at organizations that offer better wages and benefits. Unlike union environments, wages can also differ tremendously among individuals who have the same job title and perform the same duties. This can have a major impact on the organization.
Union Environment: Wages within union environments are negotiated. Pay rates/ranges, along with pay raises, are determined and outlined within the collective bargaining agreement. The pay rates/ranges are set for each job covered under the agreement. Many organizations will conduct job evaluations, wage surveys, and other methods when making wage decisions. Management must look ...
certified compensation and benefits manager sample-materialVskills
The sample course material covers the following topics as under.
Introduction
Objectives of compensation management
Principles of compensation formulation
Types of wages and wage policies
Procedure and practices for wage determination
Compensation decisions
Compensation benchmarking
Compensation trends and practices in India
Get the complete material. Check more details on the below link.
http://www.vskills.in/certification/Human-Resources/Certified-Compensation-and-Benefits-Manager
9 Salary Surveys A Snapshot Market data obtained from salary surv.docxsleeperharwell
9 Salary Surveys: A Snapshot Market data obtained from salary surveys create the foundation for a viable compensation strategy. When combined with economic statistics and business strategy, they create the infrastructure of an organization’s salary practices. Just as DNA provides information used to construct, identify, and operate the human body, market data obtained from salary surveys are used to construct and operate organizations’ pay programs. Market data evolve from salary surveys that are compiled and analyzed periodically to determine how well the company pays relative to the market. How the company statistically analyzes, charts, and uses the data is a function of its corporate compensation strategy. Then, pay is delivered to employees through base salary and bonus/commission programs and maintained using salary administration guidelines and other pay delivery systems. Critical to this effort is effective communication of all components of pay to earn the most satisfaction from employees, and, ultimately, high productivity and success for the company. THE BIG PICTURE Where do salary surveys fit in? Why do we use them? An organization has many resources to achieve its goals. Even though these resources include land, material, capital, and people, it is only people who make decisions about and do things with the land, material, capital, and the people. An organization’s goals are accomplished only through people. Hence, the major challenge of any organization is to attract, retain, motivate, and align the types and numbers of people it needs to achieve its goals. This is accomplished through a value exchange—a situation in which the company and the employee give value to the other in exchange for value received to achieve their respective self-interests. This notion can be summarized by the phrase, “Value given for value received.” Figure 9.1 shows some of the items involved in the exchange. FIGURE 9.1 Value exchange pie charts. Many items given by the employee to the employer are not quantitatively measurable, but they are present and are very important to the company. The items from the employer to the employee may differ from one employee to the next with regard to what is of value. Indeed, even the relative size of the pieces differs among employees and individuals during a lifetime. For example, a relatively new employee may value growth opportunities more than an employee near retirement. Likewise, an individual might feel pay is very important today but tomorrow, when a new baby joins the family, benefits become more important. This shows that pay is just one component of the exchange. When an employer decides how much to pay an employee, several factors usually are considered: Business strategy. Internal value of job/skill. Market pay. Individual factors. Experience. Education. Performance. Contribution. Skills. Balance with benefits, stock, work environment, etc. What the company can afford. Compensation philosophy. Desired m.
Acorn Recovery: Restore IT infra within minutesIP ServerOne
Introducing Acorn Recovery as a Service, a simple, fast, and secure managed disaster recovery (DRaaS) by IP ServerOne. A DR solution that helps restore your IT infra within minutes.
This presentation by Morris Kleiner (University of Minnesota), was made during the discussion “Competition and Regulation in Professions and Occupations” held at the Working Party No. 2 on Competition and Regulation on 10 June 2024. More papers and presentations on the topic can be found out at oe.cd/crps.
This presentation was uploaded with the author’s consent.
Have you ever wondered how search works while visiting an e-commerce site, internal website, or searching through other types of online resources? Look no further than this informative session on the ways that taxonomies help end-users navigate the internet! Hear from taxonomists and other information professionals who have first-hand experience creating and working with taxonomies that aid in navigation, search, and discovery across a range of disciplines.
0x01 - Newton's Third Law: Static vs. Dynamic AbusersOWASP Beja
f you offer a service on the web, odds are that someone will abuse it. Be it an API, a SaaS, a PaaS, or even a static website, someone somewhere will try to figure out a way to use it to their own needs. In this talk we'll compare measures that are effective against static attackers and how to battle a dynamic attacker who adapts to your counter-measures.
About the Speaker
===============
Diogo Sousa, Engineering Manager @ Canonical
An opinionated individual with an interest in cryptography and its intersection with secure software development.
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...Orkestra
UIIN Conference, Madrid, 27-29 May 2024
James Wilson, Orkestra and Deusto Business School
Emily Wise, Lund University
Madeline Smith, The Glasgow School of Art
Sharpen existing tools or get a new toolbox? Contemporary cluster initiatives...
Human Resource Compensation
1.
2.
3. WHAT IS COMPENSATION?
All forms of financial returns and
tangible services and benefits that an
employee receives as part of an
employment relationship
5. TYPE OF INDUSTRY
There are large compensation differentials across
industries–software, Financial institution, consultancies
and FMCG companies are top bracket paymasters while
at lower rung are manufacturing, consumer durables and
pharmaceutical companies.
In industry like software packages are to retain
employees as manpower is scarce
In industry like engineering there is heavy basic fixed
component.
In industry like financial services, and banking, high
variable component and paying for performance
In FMCG and financial sectors salaries are high
6. SIZE OF INDUSTRY
Larger size organizations’ characteristics are higher profits, a lower ratio of labor
costs to total cost.
These pay higher wages and benefits for a number of reasons :-
They usually are able to.
They have some financial surplus, which they can use in various ways.
To attract a pool of competent applicants.
Perceived to counter lower job satisfaction.
The high-wage employer may be part of a national organization whose major
compensation decisions are made at the corporate level.
For example, TCS often appear to pay higher than local competitors.
(IT INDUSRTY)
7.
8. LOW-COMPENSATION
EMPLOYERS
They have low-paying ability because of the constraints of their
product market.
Most of their compensation decisions may be explained by this low
ability to pay.
Using compensation surveys, they usually pay attention to rates
for specific jobs for which there is an active outside market.
Jobs on which attention is focused obviously varies by industry.
The minimum feasible compensation is one that will obtain just
enough employees to maintain desired employee levels for some
period, typically six months.
But often organizations pay above this minimum, hoping to obtain
employees of higher quality; lower their turnover rates; and lower
their recruitment, hiring, and training costs.
9. MARKET RATE EMPLOYERS
Most common compensation level strategy followed by
organizations is to "pay according to the market.
" These organizations wish to treat their employees fairly and
yet not to raise their costs significantly more than their
competitors.
To pay the market rate an organization collect compensation
data and determine from that data exactly what the market rates.
This strategy can be characterized as being reactive to the
market, so the organization keep constantly in touch with
other organizations to find out what changes are occurring in
employee pay.
10. LABOR MARKETS
Low-pay organizations adjust to changes in labor
demand by deciding how far they can lag behind high-
paying organizations.
During an economic upswing, high-pay employers will
be increasing wages, salaries, benefits, and employment.
Low-pay employers, to hold down turnover and to
increase employment, will have to raise compensation
more than high-paying firms.
The compensation gap between high-paying and low-
paying firms thereby narrows during an upswing.
11.
12. Compensating wage differentials
Matching of workers between workers
(trying to max utility) and employers
(trying to max profit)
some jobs are preferred to others at the
same wage
so if you cannot force workers to do the less
preferred jobs, then you must provide
incentives for people to do them
13. CONTD…
Compensating wage differentials act as a
individual rewards to workers who accept
“bad” jobs
compensating wage differentials then
become the price at which good working
conditions can be bought or bad working
conditions sold to workers
Manufacturing production employees earn
3% more for working nights…
14. CONTD….
Bottom-line: if a worker has the choice between a
“good” job and a “bad” job at the same wage then
he/she will choose the “good” job
So he/she must be provided with additional
incentives (monetary or otherwise) to undertake
the “bad” job
So holding worker characteristics constant,
workers in “bad” jobs will get paid more than
those in “good” jobs
15. CONTD….
What are those characteristics?
Skill level, age, experience, race, gender, union
status, region of the country and so forth.
Three assumptions:
(1) Utility maximization
(2) Worker information
(3) Worker mobility
16. UTILITY MAXIMIZATION
X says that workers are interested in maximizing
their utility and not merely income. If workers
always chose to maximize their income then they
would always choose the highest paying job
available
This behavior then would cause wages to be
equalized across jobs open to any set of workers
17. CONTD….
Continuing with x utility maximization
In contrast compensating wage differentials would
arise only if workers do NOT choose the highest
paying job offered but instead prefer a low paying
but more “pleasant” job.
This behavior allows employers paying lower
wages for more pleasant jobs to be competitive
Overall utility from the pay and the psychic
aspects of the job tend to equalize for the marginal
worker
18. WORKER INFORMATION
The assumption on worker information says that
workers are fully informed about the
characteristics of the job
Or the workers find out about the hazards of a
“bad” job by word of mouth or soon after joining
etc.
If the “hazard” is an obscure one such as long term
impacts on health then we may not perceive any
compensating wage differentials and our
predictions may not be correct
19. WORKER MOBILITY
Workers have a range of jobs to choose from
This would require some degree of mobility on the
part of the workers.
20. EMPIRICAL TESTS FOR
COMPENSATING WAGE
DIFFERENTIALS
While the idea of compensating wage differentials
seems there has been a lack of empirical evidence
Empirical work is of recent Life.
Two problems:
(1) The prediction of wage differentials can be
tested while holding other characteristics constant
which is a difficult task
(2) How to specify job characteristics?
21. EMPIRICAL TESTS FOR
COMPENSATING WAGE
DIFFERENTIALS
Some of the earlier tests for compensating wage
differentials were done with respect to injury or
death in the workplace since these are
unambiguously “bad
Other things equal wages ARE HIGHER in riskier
jobs
Wages are 1% - 2% higher in jobs with 1 death in
10,000 per year than for jobs in industries with
half that level of risk.
22.
23. EMPLOYER
CONSIDERATIONS
Employers are faced with a risk/reward
trade-off of their own which derives from
three assumptions:
1. It is costly to reduce the risk of injury
facing employees.
2. Competitive pressures will force many
firms to operate at zero profit
All OTHER job characteristics are given
24. EMPLOYER
CONSIDERATIONS
Thus forces on the employer side of the
market tend to cause low risk to be
associates with low wages and high risk to
be associated with high wages, holding
other things constant
If a firm spends more on safety then it
spends less on other things etc.
Consider the profit curves for an employer
25. OFFER CURVE
The above job matching process can be
generalized to more than two employers and
employees.
26. MAJOR BEHAVIORAL
INSIGHTS
From the perspective of “positive economics” our
model generates two major insights
The first is that wages rise with risk all are equal
According to this prediction, there will be
compensating wage differentials for job
characteristics that are viewed as undesirable by
workers who employers must attract
Second, workers with a strong preference for
safety will tend to take jobs in firms with “safer”
jobs
27. MAJOR BEHAVIORAL
INSIGHTS
Risk averse workers then seek out jobs which are
safer but lower paying
Workers who are not so averse to risk will seek
out jobs that are higher risk and higher paying
The second insight is then that the job matching
process – if it takes place under the conditions of
knowledge and choice – is one in which firms and
workers offer and accept jobs in a fashion that
makes the most of their strengths and preferences
29. RISK AND GOVERNMENT
REGULATION
How can one estimate, in a practical way, how
much wage loss workers would be willing to bear
in exchange for a reduction in the risk and still feel
at least as well off as they are currently?
The answer lies in estimating compensating wage
differentials in markets that appear to work.
30. RISK AND GOVERNMENT
REGULATION
The workers are benefitted by the policies which
are framed by government.
However the use of compensating wage
differentials should not be oversold because of the
difficulties of figuring out which markets are
properly functioning and which not
Since one cannot rule out the possibility that one
way or another workers will pay for increased
workplace safety, economists suggest conducting
studies to estimate whether the value that workers
place on reducing risk is commensurate with the
costs of the program - benefit-cost analysis
31. RISK AND GOVERNMENT
REGULATION
Consider two alternative standards doe limiting
exposure of chemical workers to acryl onitrile
which is believed to be different from each other
32. EMPLOYEE PREFERENCES
Both payments in kind and deferred compensation
are usually non-taxable
Two opposing forces are at work here
On one hand these benefits are non-taxable
On the other hand, benefits involve a loss of
control over one’s total compensation – most
workers would prefer to receive all their benefits
in currently spendable cash now.
33. EMPLOYER PREFERENCES
The easiest way to depict the willingness of a firm
to offer employee benefits is through the use of is-
profit curves.
Suppose a firm must pay X Rs in total as
compensation.
The various compensation packages that a firm is
willing to offer fall along the zero profit iso-profit
curve drawn between wages and benefits
Any combination of wages and benefits along the
line are the same profit to the firm
34. EMPLOYER PREFERENCES
However the trade-off between wages and
benefits may not necessarily be 1 for 1.
For one thing by increasing compensation
in the form of benefits rather than wages
employers may be able to avoid taxes that
are levied on them as a fraction of the
payroll. This would tend to flatten the iso-
profit curve
35. CONLUSION
So the whole topic is all about the
differences of Compensations where all the
industry follows in today's world which is
the most aspect of running a business
towards to achieve its goal.