Employment relations
Employment Relations
Nowadays, most employers and employees are concerned about pay-rate systems. Employees will be affected significantly if a pay-rate system is incorrectly chosen by the company they work for. Therefore, in this essay, I will explain the benefits and drawbacks if the companies use incentive pay-systems as tools to fix the conflicts of interest between employers and employees.
Employers are agents who own the means of production of society. They exercise control over the work given to employees and pay them wages or salaries in exchange for on-going work. Whereas employees are the individuals hired in order to produce goods and services for employers, in exchange for money. It is this money that is said to be the soul between the two. The level of payment will affect their relationship at work as, in fact, it is a financial reward offered by employers to employees in order to provide higher motivation and promote better work performance. Why will conflict be created between employers and employees? The reason is simple: they often do not always share the same goal. The main objectives of employers are to do what is best for the company in terms of efficiency, profitability and the success of the company. Conversely, it is in the interest of employees to look for some stable companies which are able to provide them fairness (equality) and respect. Thereby, incentive pay-systems will be used to try to resolve this clash of interests between both.
There are two main categories of pay-systems: Basic rate and incentive pay systems. In order to avoid conflicts, it is important for firms to choose a suitable, transparent pay-system and it should always be agreed with their employees, as it will indicate the way they pay – or reward – their employees for the contribution to firms. The high level of transparency is also necessary to ensure that employees know how to calculate their pay, or the approximate
Nowadays, most employers and employees are concerned about pay-rate systems. Employees will be affected significantly if a pay-rate system is incorrectly chosen by the company they work for. Therefore, in this essay, I will explain the benefits and drawbacks if the companies use incentive pay-systems as tools to fix the conflicts of interest between employers and employees.
Employers are agents who own the means of production of society. They exercise control over the work given to employees and pay them wages or salaries in exchange for on-going work. Whereas employees are the individuals hired in order to produce goods and services for employers, in exchange for money. It is this money that is said to be the soul between the two. The level of payment will affect their relationship at work as, in fact, it is a financial reward offered by employers to employees in order to provide higher motivation and promote better work performance. Why will conflict be created between employers and employees? The reason is simple: they often do not always share the same goal. The main objectives of employers are to do what is best for the company in terms of efficiency, profitability and the success of the company. Conversely, it is in the interest of employees to look for some stable companies which are able to provide them fairness (equality) and respect. Thereby, incentive pay-systems will be used to try to resolve this clash of interests between both.
There are two main categories of pay-systems: Basic rate and incentive pay systems. In order to avoid conflicts, it is important for firms to choose a suitable, transparent pay-system and it should always be agreed with their employees, as it will indicate the way they pay – or reward – their employees for the contribution to firms. The high level of transparency is also necessary to ensure that employees know how to calculate their pay, or the approximate
Bibliography: London: ACAS. 2005 Forthcoming URL= London: ACAS. 2006 Forthcoming URL= Industrial Relations Journal. Oxford: Blackwell Publishing Ltd, 2010. 41:4 Compensation and Different Types of Pay Systems Ed. Ian Beardwell and Len Holden. Harlow: Prentice Hall, 2000.