The pay structure of the organization takes into account various factors. One of the most prominent factors that determine the pay structure is the internal culture of that particular organization. For instance; in some companies the employees may be hired on a commission basis; whereas, in other places employees may be paid based on the number of hours worked.
The nature of work determines which pay structure best suits the organization. The pay of the workers must be a true reflection of the expectations from the workers. Workers must not be underpaid and equally important it is to realize that they should not be overpaid either. Certain kinds of jobs require the workers to work in dangerous environments; consequently, they should be paid higher than people who work in safe work environments. On the other hand, some jobs require a greater stress level; therefore, they should be paid higher than those with a relaxed work nature. Personal affiliations must not impact the pay package of an employee, and all employees must be paid according to their true worth to the company.
Voluntary turnover is when employees resign from their jobs out of their will and are not asked to do so by any individual within the organization. On the other hand, involuntary turnover is when people are asked to resign due to a lack of expected performance or downsizing. Voluntary turnover may not be a healthy sign as it indicates that there is something wrong that is forcing people to resign. Moreover, voluntary turnover also is indicative of high levels of de-motivation within the organization. Involuntary turnover may increase insecurities amongst existing employees and could lead to voluntary turnover if employees get better job opportunities. Furthermore, involuntary turnover may ensure existing employees perform to their best abilities as they would know about the consequences if they are unable to perform. Thus, involuntary turnover may in certain situations be productive for the organization.
3. Describe and evaluate the criteria employees use to evaluate the fairness of the pay structure.
Employees often compare their pay to people in similar positions within the organization and other organizations. Employees may often overlook unknown factors that cause a difference in pay, and this could result in de-motivation and grievances. Women often compare their pays to their male counterparts in the same position at the workplace. This may be harmful to the organization because most men are paid higher than women, and the organization has ways to justify their actions.
Employees also compare their pay based on the fringe benefits received by their colleagues. People do not just consider pay, but bonuses and commissions are also compared. Thus, people who receive higher bonuses may be compared to by people who receive lower bonuses during a specific period. If people compare bonuses without taking into consideration other factors such as; hard work and performance then, there may be an increase in grievances.