Compose a 1000 words essay on Wage systems. Needs to be plagiarism free!
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Many factors can be identified as wage determinants. They can be selected in the following groups: economic, social, phycological and institutional. In this essay I will stick to the economic determinants:
Measuring two-tier system and concession system using the first etalon, a company’s ability to pay, I must say that these two systems have different assignation. The concession bargaining system was widely used in 1980s and trade unions often agreed with wage cuts because companies were not able to pay full wage and at the same time wanted to keep their employees, as it is written in the review of the Organisation for Economic Co-operation and Development (OECD) (1997): “The concession bargaining which has occured in several years is an illustration of the recognition by both firms and unions of the link between costs, and thus prices, and output and employment” (http://www.oecd.org/dataoecd/19/60/2080431.pdf) . The concession system lost its popularity and influence in 90s when unions understood that company’s were again able to pay then they did. The two-tier wage system appeared to reconcile management and employees in a struggle for higher salary, it sacrificed new employees in order to make happy experienced employees. That was done to keep anticipated productivity. “The two-tier structure permits hiring of new workers at significantly lower wages and benefits, compared to those of the regular work force. It will be worth countless millions of dollars to employers in coming years.” (http://www.laboreducator.org/twotierpay.pdf) Thus companies’ management benefited as wage increase was offset by rising level of productivity and at the same time newcomers didn’t receive equal payments. So the concession system and the two-tier system are assigned for different situations. The concession system can help to rise general company’s ability to pay”, while the two-tier system is primarily designed to meet expectations of experienced employees.