Increasing organizational productivity is one of the hottest topics in executive suites.

Increasing organizational productivity is one of the hottest topics in executive suites.

Increasing organizational productivity is one of the hottest topics in executive suites. Managers realize that paying employees more will not result in increased output and improved quality. The strong economy of the 1950???­????s and 1960???­????s and the high inflation of the 1970???­????s and early 1980???­????s helped establish the expectation among workers that their pay and benefits would be increased, as needed, to keep pace with the changes in the cost of living. These adjustments were often granted without consideration to individual productivity. What emerged was a mindset of job and pay entitlement. However, things are changing due to the current move of restructuring and downsizing activities that are so prevalent on the economic landscape. Pay represents by far the most important and contentious element in the employment relationship, and is of equal interest to the employer and employee. To the employer it represents a significant part of the costs, and it affects ability to recruit and retain a labor force of quality, and to the employee, because it is fundamental to the standard of living and is a measure of the value of service and or performance. Traditionally wages and pay have been determined through government regulation, minimum wage determination, and negotiation with unions. The factors or criteria which have influenced pay and pay increases include profit (but generally unrelated to individual or group performance), job evaluation, seniority, cost of living, negotiating strength of parties and skills, size of business, and management philosophy, just to name a few. Performance measures such as productivity or profit related to the performance of a group have been of less importance in determining pay increases. Though skills have been reflected in pay differentials, pay systems have been seldom geared to the encouragement of skills acquisition and application. However, times have changed, in the United States,…


Comments are closed.