ADM 3337 Lecture Notes - Lecture 5: Marginal Revenue Productivity Theory Of Wages, Marginal Revenue, Factors Of Production
20 Apr 2016
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Document Summary
External competitiveness: refers to the pay relationships among organizations- the organization"s pay relative to its competitors. External competitiveness is achieved by: setting a pay level that"s above, below, or equal to that of competitors, determining the mix of pay forms, control labour costs, attract and retain talent. Pay forms: the mix of the various types of payments, or the pay mix, that makes up total compensation. Labour market factors: nature of supply, nature of demand, level of product demand, degree of competition. Organizational factors: industry and technology, employer size, employees" preferences, organization"s strategy. Assumptions: employers always seek to maximize profits, people are homogeneous and therefore interchangeable, pay rates reflect all costs associated with employment, markets faced by employers are competitive. The market rate is where the lines for labour demand and labour supply cross. No barriers to mobility exist: these assumptions simplify the real world. They possess accurate information about all job openings.
