SIX DANGEROUS MYTHS ABOUT PAY
HUMAN RESOURCE MANAGEMENT
Pooja Kushwaha
Presented by: Tanmayee Mishra Priyanshi Tater
Atul Verma
You can lower your labor cost by cutting labor rates
Labour cost constitute a significance proportion of total costs
Labor rates and labor costs are the same things
MYTHS Low labor costs are a potent and sustainable competitive weapon
Individual incentive pay improves performance
Peole work for money
TRUTH & CONSEQUENCES Myth
Reality
1
Labor rates and labor costs are the same things.
Labor rates are what company pays to its employees.
2
You can lower your labor cost by cutting labor rates.
To lower labor cost, you need to address both. Sometimes lowering labour rates increses labor costs.
Labour cost constitute a significance proportion of total costs.
True - but only sometimes, also vary widely by industry and company.
3
4
Myth
Reality
Low labor costs are a potent and sustainable competitive weapon.
Quality, customer service, product, process, service innovation, technology leadership can be more competitive weapon.
Theory Organisational learning theory Organizational learning is the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge. This knowledge is broad, covering any topic that could better an organization.
Myth
5
Individual incentive pay improves performance.
Reality Undermines performance
Theory Equity Theory Equity theory is based in the idea that individuals are motivated by fairness, and if they identify inequities in the input or output ratios of themselves and their referent group, they will seek to adjust their input to reach their perceived equity.
Myth
6
Peole work for money
Reality People do work for money - but they work even more for meaning in their lives.
Theory Herzberg’s motivation - hygiene theory The two-factor theory (also known as Herzberg’s motivation-hygiene theory ) states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction.
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