In Intra Industry. we include y Size of Industry y Financial success y Competitors y Market Position y Leadership y Organisational culture .

Occupational wage differentials y Inter firm differentials y Skill differentials y Sex differentials y Inter-Industry differentials y Regional wage differentials y Sectoral differentials .Types of wage differentials y Occupational wage differentials y Inter.

Factor influencing wage differentials y Demand and Supply y Bargaining Power y Government Policy y Goodwill of the Company y Cost of living y Productivity of labour y Comparative wages y Ability to Pay y Job Requirement .

Principles of Wage Differentials y Commensurate with work y Equal pay for equal work y Wages to attract workers .

Uses of wage differentials y To induce employees to change job y To get employees to learn and acquire new skills y To shift employees from declining industries to new industries y To get employees to accept more responsible position .

Variants of people-based pay: Skill-Based Pay KnowledgeBased Pay People-Based Pay CredentialBased Pay CompetencyBased Pay Feedback Pay .

Methods of Payment The ti e they r The utput they pr duce S ills Kn ledge C petencies Ac binati n f these factors .

Factors in Compensation Estimate y Value added Factor y Ability-to-Pay Factor y Government Wage Policy y Union Pressure y Cost of living Factor y Hierarchy of Jobs y Non-Wage Benefit factor y Seniority factor y Hazard factor y Scarcity Factor .

In Inter Industry. we include y Nature of Industry y Knowledge y Troublence y Technology Required y Level of skills and competencies y Competitive strategy .

Incentive compensation .

employees cannot discuss pay matters and. specifically. their own pay y Opening up a system has costs and benefits y To reduce the manipulative aura surrounding pay. and causal relationships . interdependence. information on pay becomes a critical decision y When deciding on secrecy or openness: y Determine what employees want to know about pay y Decide if the information will harm or help the firm y Weigh performance. a company must share pay information with employees y As firms post job openings. her/his superior.Pay Secrecy or Openness y There are degrees of pay secretiveness and openness y In many organizations. pay is known only to the employee. and HRM/payroll y In some organizations. pay ranges and individual pay are open to the public and fellow employees (open system) y With the secret system.

Pay Security y Current compensation can motivate performance y So can the belief that there will be future compensation security y Plans for providing this security include: y y y y y y A guaranteed annual wage Supplementary unemployment benefits Cost of living allowances (COLAs) Severance pay Seniority rules Employment contracts .

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