4/3/2023 0 Comments Hedonic wage function![]() ![]() Since most of the workers are mobile with a view to maximising their earnings, wage differentials reflect in variations in productivity, efficiency of management, maximum utilisation of human force etc.Īttracting efficient workers, maximisation of employee commitment, development of skills, knowledge, utilisation of human resources, maximisation of productivity can be fulfilled through wage differentials, as the latter determines the direct allocation of manpower among different units, occupations and regions so that national production can be maximised. ![]() Salary differentials perform important economic, functions like labour productivity, attracting the people to different jobs. Salary Differentials and Economy Functions : If both productivity and profitability are high, then the wages sought and given are correspondingly bound to be high. The influence of collective bargaining in terms of pushing up wages in some industries and regions has been quite significant, especially in situations where collective bargaining is coupled with union strength.įinally, the difference in terms of a unit’s level of productivity and profitability and its influence differentials has to be considered. In the modern organized sector, where collective bargaining is prevalent, there is a trend towards job evaluation schemes. between jobs and provided for relative weightages which could lead to standardization and eradication of distinctions for the same type of jobs. On a wide scale, there has not been a systematic attempt at job evaluation – an exercise which would have identified the differences in terms of skill training experience, etc. In many situations, arbitration or judicial pronouncements have favored a higher quantum for the lowest category of workers. The rate of dearness allowance (DA) depending on the index chosen will affect wage differentials. If it is depressed, this will have some effect on wages and consequently on the grades. Two factors need to be taken into account, the demand and supply for a particular category of skills and the state of prosperity of an industry or unit. ![]() When the coal industry was replaced by oil, because of its lack of modernization, the wages of the coal-miners were depressed. The economic factors or abundance of such workers may alter their bargaining strength. There are certain jobs which involve physically heavy work, others which are strenuous but may not require very high degree of other skills, and yet again, there are certain jobs which require the workmen to work in unpleasant and dangerous conditions, like coal, miners, who have to work underground with poor ventilation and safety hazards. The unskilled category which requires none of these is relatively less well paid. The variance is due to the complexity of the skill acquired, its scarcity, and the time taken in training to acquire it. When there is a variation in workers’ skills, i.e., highly skilled, skilled, semi-skilled and unskilled, their wage rates will differ. There is a need to understand the reasons for these differences as in many cases there is a constant adjustment taking place in order to maintain the existing disparity, for instance, between the skilled and unskilled or semiskilled workers between the officers and the supervisory or clerical staff and so on. ![]()
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