Management and Organizational Studies 3342A/B Chapter Notes - Chapter 7: Reservation Wage, Signalling Theory, Product Market

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3342A/B
• Professor: Linda Eligh

Document Summary

The higher the pay level, the higher the labour costs. Labour costs = pay level x number of employees: attract and retain employees. Different employers set different pay levels deliberately no single going rate for a job. A single company may set diff pay level policies for different job families. How a company looks in comparison to the market depends on the companies they compare to and the pay forms included in the comparison. The pay rates reflect all costs associated with employment. As pay increases, more people will be willing to take a job. But if unemployment rates are low, offers of higher pay may not increase supply everyone who wants to work is already working. An employer who dominated the local labour market may also find that rising wages doesn"t necessarily attract more applicants simply because supply has dried up.