Wages Abstract



Wagespose a great challenge in many institutions especially thestructuring mechanism. The issues entailed in wages tend to varyacross different organizations. It therefore becomes quite hard toestablish a workable salary structure owing to the diverseness ofjobs within an institution. Though scope of work, age, working hours,knowledge and skills define how a structure should look, it is quiteintricate to interrelate the above aspects. It therefore requires animmense amount of knowledge to structure an effective and workablewage plan within any organization.

Thispaper will discuss wages and related issues, employee benefits,administrative clauses and institutional issues. By elaborating onthese aspects, the paper will ascertain the best way of coming upwith a standard wage plan to avoid any grievances that may arisewithin an organization. Outlining the reasons for my recommendationsas well as how wage related issues could be addressed will also be amajor undertaking within this paper. Generally, this paper will seekto outline the effective way of devising a salary structure that canbe deemed fair in an institution. A fair salary structure will limitemployee dissatisfaction.


Wagescan be described as the monetary remuneration paid to an employee tocarter for work done. In other words, wages entail the compensationsgiven to an employee by an employer for work done. The payments mightbe calculated in a daily or hourly rate or fixed on task completed.

Wagerelated issues

Themain issue in many institutions is the determination of minimum wagesi.e. defining the least amount of money an employee should earn canbe quite hard. Apart from that, other issues such as equal pay,overtime and payroll withholding among others tend to pose problemswhen devising a wage structure. In other words, management is facedwith immense challenges to devise a well-balanced wage structure thatincorporates all the aspects involved in the workplace. Fairness inthat regard, ought to be the main agenda of a wage structure.


Theseincludes all kinds of non-wage contribution that are accorded to theemployees as additional incentives to their normal salaries. Thebenefits also vary considerably across institutions with some of theaspects including health care, retirement benefits among others. Theadditives to the basic salary are quite vital in maintaining asatisfied workforce. In other words, employees prefer to have morebenefits that can boost their earnings and even improve theirlifestyles. A good example is the healthcare benefit. Coveringemployees’ health needs promotes satisfaction among them.


Institutionalissues can be quite broad, ranging from operational costs, profitsaccrued among others. In that regard, wages are most definitelyshaped by the issues within an organization whether directly orindirectly. As portrayed in many institutions, the amount of profitsor cash generated by the company defines the wage structure. If acompany makes more profits, there is a tendency to increase theemployee benefits or salary scale.


Theseare regulations entailed within a company to govern different aspectsof operation among them wages. The clause contain all therequirements necessary for relations between management and employeesamong other areas. Wages are mostly defined by administrative clausespresent in an organization. In accordance to the administrativeclauses, the scope of work shapes the salary structure. The clausesgenerally define the scope of work which in turn determine the salarystructure. The administrative clauses also determine progression interms of earnings i.e. if an employee wants an upgrade in his/herearnings, the regulations defines how it should be done.


Inmost cases, wage structure is mostly based on work experience,working hours and quantity and quality of work done. In many casesthe sensitivity of a job plays a huge role in determining the wagestructure. An appropriate structure would involve scope of work, interms of knowledge and skills used, working hours, and longevity inthe particular occupation [ CITATION Myk10 l 1033 ].

Apartfrom the core mechanisms, one other way of ensuring a fair structureentails the additional benefits. As much as the main salary could bedecided in accordance to the years of work, type and hours per day,other benefits could be utilized. A good example is making employeesshareholders. In this manner, employees could be left to investwithin the particular company and therefore share the profits withthe company. Making employee shareholders alleviates fears ofdisharmony within the workplace. Employees work harder to ensure thecompany succeeds and in so doing the profits are increased. Theemployees are motivated to put much effort in the company’sundertakings thereby improving the productivity levels. It is alsohard to hear any complaints from persons involved with the companywhen such a design is implemented [ CITATION Lis10 l 1033 ].

Advantagesof the above structure

  1. Increased productivity levels i.e. workers do their jobs with the aim of improving the company which would mean an increase in profits replicating in more benefits

  2. Involvement of employees i.e. whenever workers are involved with the company they tend to have a sense of belonging that limits any wage related issues.


  1. Workers become motivated by wages rather than scope of their work. Employees are motivated to work harder to get substantial profits rather than being motivated in their line of duty.

Inthat regard, the structure will incorporate the common strategiesi.e. working hours, skills used, longevity and scope of work and theinception of workers as shareholders to share the company’sprofits. The shareholding aspect is an additional benefit for workersso as to keep them satisfied.


Wagesbeing a hard task for any institution, there is need to construct asuitable plan that would tend to reduce various issues related tosalaries. It for this reason that adoption of employees asshareholders would help minimize any wage related issues. A goodexample of company using this type of structure is Starbucks. Theemployees are treated as partners and are allowed to hold shares andshare profits in accordance to the amount of shares one has [ CITATION Sta041 l 1033 ].Though this mechanism introduces some challenges related to theperception of work as money generating rather than duty oriented, itis best suited in maintaining employee satisfaction. The commonmechanisms could still be involved with shareholding as an additionalbenefit.


Burke, L. A. (2010). Designing a Pay Structure. Designing a Pay Structure, 1-47.

Herner, M. (2010). How to Build Pay Grades and Salary Ranges. How to Build Pay Grades and Salary Ranges, 1-16.

Starbucks. (2004). Living Our Value: Corporate Social Responsibility. Washington.