ADM 3337 Lecture Notes - Lecture 5: Marginal Revenue Productivity Theory Of Wages, Level Set, Marginal Revenue
24 Oct 2017
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External competitiveness: external competitiveness refers to the pay relations among organizations- the orga(cid:374)izatio(cid:374)"s pay relati(cid:448)e to its (cid:272)o(cid:373)petitors. External competitiveness is achieved by: setting a pay level that is above, below, or equal to that of competitors, determining the mix of pay forms relative to those of competitors. Two objectives: control labor costs, and attract and retain talent. Exhibit 7. 4 supply and demand for business school graduates in the short run. Labor demand: analysis of labor demand indicates how many employees will be hired by an employer. In the short run, an employer cannot change any factor of production except human resources. Compensating differentials: work with negative characteristics requires higher pay to attract workers. Job evaluation and compensable factors must capture these negative characteristics. Signalling: pay policies signal the kinds of behaviour the employer seeks: pay practices must recognize desired behaviours with more pay, larger bonuses, and other forms of compensation.
