Compose a 1000 words essay on Wage systems. Needs to be plagiarism free!Download file to see previous pages... Many factors can be identified as wage determinants. They can be selected in the followin

Compose a 1000 words essay on Wage systems. Needs to be plagiarism free!

Many factors can be identified as wage determinants. They can be selected in the following groups: economic, social, phycological and institutional. In this essay I will stick to the economic determinants:

Measuring two-tier system and concession system using the first etalon, a company's ability to pay, I must say that these two systems have different assignation. The concession bargaining system was widely used in 1980s and trade unions often agreed with wage cuts because companies were not able to pay full wage and at the same time wanted to keep their employees, as it is written in the review of the Organisation for Economic Co-operation and Development (OECD) (1997): "The concession bargaining which has occured in several years is an illustration of the recognition by both firms and unions of the link between costs, and thus prices, and output and employment" (http://www.oecd.org/dataoecd/19/60/2080431.pdf) . The concession system lost its popularity and influence in 90s when unions understood that company's were again able to pay then they did. The two-tier wage system appeared to reconcile management and employees in a struggle for higher salary, it sacrificed new employees in order to make happy experienced employees. That was done to keep anticipated productivity. "The two-tier structure permits hiring of new workers at significantly lower wages and benefits, compared to those of the regular work force. It will be worth countless millions of dollars to employers in coming years." (http://www.laboreducator.org/twotierpay.pdf) Thus companies' management benefited as wage increase was offset by rising level of productivity and at the same time newcomers didn't receive equal payments. So the concession system and the two-tier system are assigned for different situations. The concession system can help to rise general company's ability to pay", while the two-tier system is primarily designed to meet expectations of experienced employees.

The willingness to pay is also an important factor for comparison of the two-tier and concession systems. "Except in the most extraordinary circumstances, there is no acceptable reason for a union to bargain concessions. In the case of a business that is profitable, there is absolutely no reason for concession bargaining. The results of concession bargaining over the last two decades should stand as proof that concessions do not benefit workers." (http://www.ufcw.net/articles/Toolkit/concession_bargaining-01.html)

The concession system doesn't enforce the willingness of a company management to pay as it put restrictions on level of wages.The two-tier system stimulates management to attract experienced employees on the company's side in the bargaining process with new employees, thus this system increases a company's the willingness to pay. Though the willingness is largely a measure of equal distribution and fair competing process in the marketplace. The concession system grants to a company a chance to determine a level of wage that will be considered fair, thus decreasing level of employees' participation in distribution of a company's income. The two-tier system controls fair distribution only for experienced workers while newcomers are treated unfairly.