Chapter 1

Introduction

Background of the Study

Throughout in the history of commerce; transporting goods was one of the primary
means in the trading sphere. There have been such modes that have been identified; from ships
circulating on the globe, down to horse drawn wagons, dragging across on the land. But these
kinds of modes could not keep up the growth of the growing demand in the trading sphere.

However with the introduction of technology, men started to improve their means and
modifying possibilities to make things faster, easier and safer. Thus this leads to building roads,
railways, ports and airports. Consequently with the fast paced development, commerce of men
found innovative ways to cater transporting goods with standard and quality which improved
through by air, by sea or either by land. Hence the haulage services were developed.

Haulage Service is the commercial transport of goods via roads or railways; also it is the
primary means of vehicle in the trading industry. With the rapid growth of the trading economy,
the demand for haulage service boosts, thus also the in need of drivers increases as well.

Thus this leads to competitive compensations for drivers in different firms. Berger &
Berger cited traditionally, compensation programs have had three primary design criteria: They
must be internally equitable (i.e. they must pay people in proportion to the relative value of their
job), externally competitive (i.e. they must pay people in proportion to the market price for their
job), and personally motivating to employees (Berger & Berger, 2000, p. 41).

Henry Phelps Brown says, “It seems part of the natural order of societies we know that
occupations requiring greater skill, experience, and effort should be paid more highly” (Brown,
1977, p. 28). But there are some firms that differ in their compensation structure. Basing on the
culture, geography or educational training. Hence this leads to just wage and fair wage that could
only meet to the standard living of the employee. As what David Belcher defines a fair wage as
“the wages paid by other employers for the same type of work” (Belcher, 1974, p. 481). He goes
on to define a living wage as one that is concerned with paying a person wages that are
appropriate to the standard of living that corresponds with their job responsibilities and
educational training (p. 486). According to John Ryan, a living wage is one which is sufficient to
maintain an average sized family in a manner that is consistent with the local standards (Ryan,
1912, p. 129).