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188宝金博页面版: S15 Pay levels-Armstrong's Handbook of Reward Management Practice

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内容提示: 15. PAY LEVELSKey learning pointsDeterminants of pay? Classical economic theory – Classical wages theory states that the externallabour market has buyers (employers) and sellers (employees). If the supply oflabour exceeds the demand, pay levels go down; if there is a scarcity of labourand demand exceeds the supply, pay goes up.? The labour theory of value – The value of goods and services is determined bythe amount of labour that goes into them (Karl Marx).? Human capital theory – Levels of pay are influen...

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15. PAY LEVELSKey learning pointsDeterminants of pay? Classical economic theory – Classical wages theory states that the externallabour market has buyers (employers) and sellers (employees). If the supply oflabour exceeds the demand, pay levels go down; if there is a scarcity of labourand demand exceeds the supply, pay goes up.? The labour theory of value – The value of goods and services is determined bythe amount of labour that goes into them (Karl Marx).? Human capital theory – Levels of pay are influenced by the value of humancapital in terms of the skills and expertise people possess.? Efficiency wages theory – Firms will pay more than the market rate if they believethat high levels of pay will contribute to increases in productivity.? Agency theory – In most firms there is a separation between the owners (theprincipals) and the agents (the managers). Because the principals may not havecomplete control over their agents, the latter may act in ways that may not be inaccordance with the wishes of those principals. To overcome this problem,principals may install a system of incentives to motivate and reward acceptablebehaviour.? The effort bargain – Workers in effect strike a bargain on the amount of work tobe done for a wage.Pay systems? Pay systems within organizations cover the ways in which pay is structured orunstructured and the methods used to determine the value of jobs and therelativities between them.? Most organizations have defined pay levels for jobs set out in the form of a paystructure that may cover the whole organization, or groups of related occupations(job families).

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