A research by Top Pay Unit of USA
(1990) revealed the following:
·
Salary is increasingly seen as a tool for
bringing about cultural change in an organization
·
Much greater flexibility in salary system is now
required to enable employees to recruit and retain high quality staff.
·
Some link between pay and performance for
managers and professionals is increasingly taken for granted.
·
Relating pay to performance will increase the
responsibilities of line managers, who have to live
with the consequences of
their recommendations on salaries for the staff.
·
Carefully monitoring is becoming more necessary
to ensure that a performance-related system operate fairly and consistently.
·
Computerization is making possible the
introduction of more sophisticated ways of calculating individual performance
related salary increases for large number of employees.
·
As labour market become competitive, personnel
department have to work harder to provide up-to-date information on market
rates.
·
Bonus schemes, especially for senior managers,
are being introduced by many companies, but the reason may have more to do with
market pressures than a belief that bonus scheme will increase motivation or
secure better results.
These agree with Crane (1982) in
his view that “to remain competitive in labour market,
organizations devise pay levels
and benefits that will attract labour and encourage employees to remain with
them”.
According to the USA Bureau of
National Affairs, a key aspect of the pricing process is to determine the rate
that other organizations in the same labour market are paying. In nearly all
organizations, this is accomplished through a wage or salary survey. An
organization may conduct its own survey or rely on one or more of the many
surveys available, from employees associations, trade groups and Bureau for
labour statistics. This also tallies with the view of Arthur (1995).