Chapter 7 Wageandsalary

5 REASONS WHY EMPLOYEES STAY:
1. Pride in the organization. People want to work for well-managed companies.

2. Compatible supervisor. People may stay just to work for a particular individual
who is supportive of them.
3. Compensation. People want to work for companies that offer fair
compensation, including competitive wages and benefits as well as
opportunities to learn and achieve.
4. Affiliation. People want to continue working with colleagues they respect and
like.
5. Meaningful work. People want to work for companies that let them do work
that appeals to their deepest, most passionate interests.
References
Harvard Business Review (2010). HBR Answers Exchange. Retrieved from http://
answers.hbr.org/
Top-Five Reasons Why People Quit Their Jobs
by Gregory P. Smith
1. Management demands that one person do the jobs of two or more people,
resulting in longer days and weekend work.
2. Management cuts back on administrative help, forcing professional workers to
use their time copying, stapling, collating, filing and other clerical duties.
3. Management puts a freeze on raises and promotions, when an employee
can easily find a job earning 20-30 percent more somewhere else.
4. Management doesn't allow the rank and file to make decisions or allow them
pride of ownership.
5. Management constantly reorganizes, shuffles people around, and changes
direction constantly.
Subtitle
Payment, usually paid monthly and
usually expressed as an annual
amount, made by employers to
employees in return for work done.
Payment for labor or services

usually according to contract. An
equivalent or a return for
something done, suffered or
given.
This theory is based upon the
fundamental concept that the labor
is a commodity and we have to
pay the price according to supply
and demand.
It described as wage w/c permits the recipient
worker to live in a manner in keeping with his position
in the society.
The worker’s is the cost of living should be
considered first in the cost of the production.
Is the basis in the implementation of minimum wage
laws.
It proposes that the labor is a commodity like
anything that could be bought at the price by the user.
It brings about the organization of labor union.
It implies the supply of labor in any given economy
on the whole depends upon the total number of
individuals who want to work and are available for
work.
It tries to establish the relationship between wages
and level of economic activity.
Propounds by Karl Marx.

It emphasizes that the
labor is the source of all
products and that without
this important component,
there could be no goods
to human consumption
This theory based on the cost of
living.
That the cost of living is dependent
upon the economic needs of the
family for the basic necessities of life
for food clothing and shelter.
May be conducted through telephones
and informal interviews
It uses questionnaires based

on benchmark jobs that are
also present in other
companies and industries.
Example of Salary
Survey
 Establishing the boundaries of the pertinent labor market is
the most critical step in in the survey procedures. It involves
the selection of the industry, the region or area, or the firm to
be included in the survey.
This will insure a representatives sampling of the jobs
selected as universal for a particular wage or salary

survey.
Key jobs are the labor grades that are comparatively stable
in duties and responsibilities. These are occupations that are
common in most industries and scattered through the ladder
of labor classification and commonly familiar to most people
in the industry
This may be done through a set of questionnaires and

supplemented by interviews to get the accurate information.
The Information must be able to pinpoint the problem area
that has to be addressed by the compensation level,
compensation structure, and the terms of payment plan.
The data gathered will provide management with the
opportunity of arriving at the arithmetical average, the
median, and the rage rate paid and the supplementary
wage data.
From Here the results are properly evaluated and the

HRD prepares the corresponding recommendations to the
management of the most appropriate action to take relative
to the revision of the current wage structure. Participating
companies are also provided with the summary of the
findings to foster continuous cooperation.
1. Whether the company should pay
salaries above, below, or the same
level, as the others in the same
industry in the community are paying
for the same jobs.
2. Whether the company should pay a
single rate for each job, or slot the
jobs into ranges or grades w/c would
provide room for merit increases.
3. How many pay grades or salary rages to use, and how
wide each pay grade should be (from the minimum of the
grade to the maximum).
4. What is the range of the amount in terms of money
value that should be allotted for each salary grade.
1. It affect the workers’ earning and standard of
living.
1. It eases the recruitment and maintenance of an
effective labor force.
1. It develops employee morale and increases work
efficiency.
1. It represents cost and competitive advantage in the
industry.
1. It helps in preparing budgetary allocations and
eases computation of salary adjustments and as an
aid in short term and a long range plans.
1. It eliminates pay distortions and inequalities in
employee compensation.
1. It establishes an equitable salary range for
various jobs.
The main purpose of a formal wage and salary
management plan is to have a systematic method of
payment to ensure that employees receive fair
wage and salary for the work they perform.
There are 2 methods of paying salaries:
b. By the Time Worked
b. By the Amount of Worked Produced

By the Time Worked
• Earnings do not fluctuate with the amount of work

performed or with the quality of output.
• Wages are computed in terms of unit of time.
• It is common to pay workers by the day and the
term day-work was adopted
• H x R =W
2. By the Amount of Work Produced
• Earnings depends on how much work the

employee completed .
• Piecework salaries are determined by the
number of pieces produced or completed,
and each piece is assigned a piece value
that called piece rate
• Formula N x U = W
Other information:
Labor and Wages
• The type of job one does and the financial
compensation he or she receives are very
important in our society.
• Job type is linked to status as is wealth.
Other information:
Classification of Workers
d. Blue Collar - Manual Laborers

e. White Collar - Office Workers
f. Pink Collar – Jobs associated with women
like secretarial , nursing.
Other information:
3 Categories of Labor Grades
c. Skilled Labor – These are workers who have
received specialized training to do their
jobs. Exp. carpenters, electricians,
mechanics etc.
d. Unskilled Labor – These are workers who
have received no special training and have
few specific skills. Exp const. workers,
painters, factory assembly line etc.
Other information:
3 Categories of Labor Grades
c. Professionals – elite of the labor grades,

there are those workers who need an
advanced degree to do their jobs. Exp.
Doctors, lawyers etc.
A Faithful man will abound with
blessings…
-Proverbs 28:20

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5 REASONS WHY EMPLOYEES STAY:

1. Pride in the organization. People want to work for well-managed companies.

Payment for labor or services

Propounds by Karl Marx.

It uses questionnaires based

This will insure a representatives sampling of the jobs

selected as universal for a particular wage or salary

This may be done through a set of questionnaires and

From Here the results are properly evaluated and the

b. By the Amount of Worked Produced

• Earnings do not fluctuate with the amount of work

• Earnings depends on how much work the

d. Blue Collar - Manual Laborers

c. Professionals – elite of the labor grades,

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