HRM - exam preparation Essay Example | Topics and Well Written Essays - 500 words

HRM - exam preparation - Essay Example How much of remuneration is to be paid (the absolute level) is important to the extent that it takes care of a person’s minimum needs. Fixing of a minimum wage by an employer or company, or legislating on minimum wages by the Government, therefore focuses on ‘how much’. This ‘how much’ depends on physical variables (what is needed to keep body and soul together) and cultural variables (what is perceived as ‘necessary’) (Here we may refer to the first two levels of Maslow’s Theory of the Hierarchy of Needs — taking care of the physiological and safety needs. Beyond the level of the minimum wage to be paid, equity and fairness should play an important part in determining wages (the relative levels). Further, equity should be ensured without having to sacrifice the other objectives mentioned. Equity and fairness considerations in pay fixation take care of the social and esteem needs (Maslow) of an employee. Both internal and external equity principles (relative fairness of wages of workers in the same organisation, and outside the organisation) should be kept in mind while fixing pay. Rewards (compensation) are of two kinds — direct and indirect. The direct reward is the salary; and indirect rewards are the benefits or perquisites (perks) that an employee gets. Benefits include company provided house, car, medical facilities, company paid holidays, company sponsored study courses and training and so on. Equity or fairness between one employee and another can be maintained by adjusting both the direct or indirect benefits. 1- Modification of input or output to match pay. A person who is underpaid would reduce work effort; a person who is overpaid may work more sincerely and for longer hours without further compensation. A worker may attempt to change the input/ output of others, by asking them to work/not work harder. 2- Workers may adjust