Question

Identify and describe how external and organization factors shape the design of pay structures. Why do these factors have such an impact on pay structures?

Answer 1

-	GOVERNMENT REGULATIONS AND LABOR UNION LAWS
	THERE ARE LOTS OF LAWS FOR THE BETTERMENT OF THE EMPLOYEES AND LABOR. THE PAY STRUCTURE OF THE ORGANISATION MUST BE IN LINE WITH THESE LAWS
	LABOR UNION HAVE THEIR RULES FOR THESE. TO AVOID ANY SITUATION OF STRIKE AND DISTURBANCES, ORGANISATION CHOOSE TO SATISFY THEIR DEMANDS AND RULES
-	COST OF LIVING
	THIS REQUIRES THE ADJUSTMENT IN THE PAY STRUCTURE ACCORDING TO THE INCREASE OR DECREASE IN COST OF LIVING INDEX.
	WHEN COST OF LIVING INCREASE, THE LABOR UNION DEMANDS TO INCREASE THE WAGE RATE.
-	PRODUCTIVITY
	WAGE RATE OR SALARY GETS INCREASED ONLY WHEN THEIR PRODUCTIVITY IS INCREASED
	FOR INCREASED PRODUCTIVITY, WE MAY HIRE SKILLED WORKERS
	NEW TECHNOLOGY, TRAINING, BETTER MANAGEMENT CAN INCREASE THE PRODUCTIVITY
-	THE LIVING WAGE
	THIS IS THE CRITERION WHICH MAKES SURE THAT EMPLOYEE OR WORKER SHALL BE ENABLE TO MAINTAIN A REASONABLE STANDARD OF LIVING OF HIM SELF AND THE FAMILY WITH THE GIVEN WAGE RATE OR SALARY
	THE WAGES OR SALARY MUST BE EQUAL TO OR MORE THAN THAT WHICH PROVIDES HIM THE SECURITY FOR THE LIFE'
-	PSYCHOLOGICAL FACTORS
	SOCIETY OR THE PERSON HIMSELF CONSIDER THE WAGES OR SALARY HE IS EARNING AS A MEASURE OF SUCCESS HE ACHIEVED IN THE LIFE
	THEY MAY NOT FEEL THE PRIDE FOR THEIR WORK BEAUSE THEY ARE NOT GETTING HANDSOME AMOUNT AS A REWARD OF THEIR WORK
	TO SATISFY THE EQUITY, JUSTICE AND FAIRNESS, WAGES SHALL BE DETERMINED ACCORDING TO THE PRODUCTIVITY AND THE STANDARD OF WORK DONE BY THE PERSON