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.

1. PRESENTED BY:
SAKSHI GARG
MBA FINAL YEAR
ROLL NO. =18844
UNIVERSITY=1801036
INTER AND INTRA INDUSTRY
WAGE DIFFERENTIALS

2. Meaning of Wage Differentials
Wage differential refers to the difference in wage rates
between workers in the same industry or in the
different industry.
It may be the difference in wages between workers
with different skills working in the same industry or
workers with similar skills working in different
industries or regions.
It is also known as Compensating Differential .

3. Reasons for Wage Differentials
 Risk and Hazardous conditions
 Education and Skill
 Location

4. Factors influencing Wage Differential
 Nature of work to be performed
 Degree of skill and training to do a job
 Demand and Supply position of
workers in the labour market
 Relative bargaining strengths of
employees and employers
 Regulatory systems of employment
 Extent of unionization and its strength
 Nature of the role and responsibilities
required

5. Types of Wage Differentials
Types of Wage Differentials
Employee’s
Character
based
Industry
based
Regional
based
Skill
Gender
Experience
Work Behaviour
Occupational
State based
Country
based
Geographical
Based
Intra-
Industry
Inter-
Industry

6. Intra Industry Wage Differentials
In the same plant or industry, the employer may pay
different compensation packages, based on –
 Differences in the quality of work,
 Quality of labour,
 Imperfection in the market, and
 Differences in efficiency of
plant or machinery.

7. Determinants of Intra Industry Wage
Differentials
 Size of the organization
 Financial success
 Competitors
 Market position
 Automation
 Leadership style
 Compensation philosophy and policies
 Culture
 Stage of lifecycle

8. Inter Industry Wage Differentials
 These differentials arise when workers in the same
occupation and in the same area at the same time
are paid different compensation packages in
different industries.
 It reflects skill differentials.

9. Determinants of Inter Industry Wage
Differentials
 Nature of industry
 Knowledge
 Turbulence in business environment
 Technology
 Skills and competencies
 Quality of personnel
 Sector
 Competitive strategy