Human resource management full notes slideshare uses cookies to improve functionality and performance, and to provide you with relevant advertising. Wage differentials the wage paid to workers varies greatly. The wage differentials help in building the wage structures for various levels and types of jobs in an organization, as they are inevitable. It can also refer to the difference in wages between employees who have dissimilar skills within the same industry. Studies on wage differentials and labour market transitions helda. Wage differentials have a great economic and social significance, for they are directly related to the allocation of the economic resources of a country, including manpower, growth of the national income, and the pace of economic development. In cities, wage rates are high while rural labour is available at low wage rates.
A wage differential refers to the difference in wages between people with similar skills within differing localities or industries. The wage differentials in india tend to be higher in rural as compared with urban areas, and are higher among women than among men. This is a short video explaining the microeconomics concept of wage differentials. Wage differentials are on the basis of geographical differences based on industrial and occupational differences. An illustrated tutorial on why differences in wages exist between different occupations and localities, how compensating differentials affect wages, the. A geographic pay differential is additional compensation paid to an employee to account for variations in cost of labor andor cost of living among geographic locations. Wage policy in india pdf download january 2, 2018 study mentor 0 comment it is the right of every man to be paid duly for his work irrespective of his religion, caste, and creed. The five causes of wage differentials are as follows. Differences in wages between jobs should be in proportion to the differences in the. Using the illustration in figure 1, this is similar to saying. Wage differential is an element of location selection that is a wage scale reflecting the average schedule of workers pay in an area that takes into account the performance of related tasks or services. It is generally referenced when discussing the given risk of a certain job. They relate to skill, training and experience, nature and complexity of the job, responsibilities and accountability of the person doing that job and the economic and social status of the geographical area. There are wage differentials of workers in different plants in the same area and occupation.
Wage differentials advantages and disadvantages with evaluation. The three nationals or country categories involved in international hrm. A video covering wage differentials advantages and disadvantages with evaluation twitter. Wage may differ in different types of employment, occupation, from industry to industry, between person to person in the same grade or level, from state to state. If you continue browsing the site, you agree to the use of cookies on this website. Wage differentials advantages and disadvantages with. Wage differential is an element of location selection that is a wage scale reflecting the average schedule of workers pay in an area that takes into account the. Wage differentials have a number of implications both at macroa and micro levels. Wage differentials are also found on account of imperfect market competition in the factor market. Social welfare activity depends, in a large measure, on such wage differentials as will.