HROB 3010 Chapter Notes - Chapter 7: Reservation Wage, Factors Of Production, Marginal Revenue

• School: University of Guelph
• Department: Human Resources and Organizational Behaviour
• Course: HROB 3010
• Professor: Rhonda Gordon

Document Summary

Comparisons outside the organization are reviewed organizational factors (size) Pay level- the average of the array of rates paid by an employer: Refers to pay relationships among organizations (relative to competitors) Shaped by labour market (supply and demand), product market (competition), and. Base + bonuses + benefits + options/number of employees. Set pay level below or equal to competitors. Labour costs = number of employees x pay level. Consider mix of pay forms relative to competitors. Pay forms- the mix of the various types of payments that make up total compensation. Pay level and pay forms focus on two objectives: control costs. Higher the pay level, the higher the labour costs: attract and retain employees. Company may pay more for worker because it believes higher paid employees are more productive than those at other companies (may be better trained or more innovative) Company may pay more because people are less likely to quit (saves recruiting and training costs)