Wage differentials have a great economic and social significance, especially in under-developed or developing countries, as they are directly related to the allocation of economic resources of a country and are responsible for the growth of state or national income. The bargaining power of unions and the earning strategies of the companies also affect the wage differentials. Maintenance of differentials is believed to foster poor INDUSTRIAL RELATIONS and encourage inflationary wage spirals; as one group wins a pay increase so another seeks a similar one to maintain the differential. ii. vii. it is predetermined and agreed between the employer and employee, while wages are not fixed, as it varies depending on the performance of the labour. This also decide differentiations. Industry based differentiations refer to the wage or salary payment according to the nature of the job, types of industry, technical knowledge or expertise required, their paying capacity according to the size of the company and differential wages in similar industries or neighbouring industries. Technology used – The nature of technology being used in a organization may require different skills and knowledge or expertise which become the factor for determining the varying pay packages. iv. salary differentials definition in the English Cobuild dictionary for learners, salary differentials meaning explained, see also 'salutary',salad',salaried',sally', English vocabulary $50,000. It enables full employment of the resources of the economy to be attained. These considerations employ women for some roles and only men for some roles, but because of the difference in the capacity to work the pay or wages differ accordingly, creating wage/salary differentiations. The salary range for lower-level positions is normally the narrowest. Broadbanding pay structures in HR consolidate the many grades found in a traditional salary structure into a few larger salary bands. internal salary differential in English translation and definition "internal salary differential", Dictionary English-English online. Size of the organization – The size of the organization determines its paying capacity, span of control, budget on human resources and competitive strength to determine the pay packages. There is always more flexibility in the salary range with regard to senior leaders because their decisions impact the bottom-line and have a major effect across the entire organization. a difference in pay between different industries or between groups of employees within an organization: a pay / wage / salary differential maintain/reduce/justify a differential In order to maintain differentials we propose a 3% increase for all pay grades. This rise may vary according to the level of excellence achieved level of degree of supervision needed, and the number of years of experience. i. However, cost-of-living Someone who is paid a salary is paid a fixed amount in each pay period, with the total of these fixed payments over a full year summing to the amount of the salary. Wage may differ in different types of employment, occupation, from industry to industry, between person to person in the same grade or level, from state to state or from country to country. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. What is Wage Differentials: Meaning, Significance, Factors and Types, Significance (With Some Other Importance), Factors Influencing Wage and Salary Differentials, Essays, Research Papers and Articles on Business Management, Time Wage: Meaning, Features, Advantages and Disadvantages, Top 13 Essentials of a Sound Wage Plan for Workers, Piece Wage System: Meaning, Advantages and Disadvantages, Essay on Wage Differentials in India | Workers | Industrial Management, Advantages and Disadvantages of Franchising, What is Wage Differentials – Significance (With Some Other Importance), What is Wage Differentials – Factors Influencing Wage and Salary Differentials, What is Wage Differentials – Classification of Common Types of Wage Differentials. Other factors such as advancement in technology, managerial efficiency, financial strength and age of the company influence inter industry differentials. Some may require manual work, some may require mixed efforts of machine and hand and some may require automation only to be supervised or monitored. 2. pay differential. Meaning of Wage Differentials 2. Skilled workers on an average earn more than semi-skilled, unskilled and casual workers in any industry and in any state or country. (e) Extent of Supervision/Experience Based. Chapel Hill, NC. Wage may differ in different types of employment, occupation, from industry to industry, between person to person in the same grade or level, from state to state or from country to country. These differences are termed as wage differentials. Each differential can add thousands of dollars to your annual earnings — permanently — and cumulative differentials can make a big difference in your earning power. Before uploading and sharing your knowledge on this site, please read the following pages: 1. Differential cost is the difference between the cost of two alternative decisions, or of a change in output levels. This is because the literacy level, skill or expertise and learning attitude may have wide variations and economic development may be forcing employment. Privacy Policy 9. d. Social prejudices against taking up certain jobs, e. Prejudices against gender in taking up certain jobs. These are small firms that yield a level of income for their owner or owners that is similar to what they would earn when working for an employer. These may be inter plant, inter industries and inter regional also. The wage difference among different degrees of skill of the workers appears in these differentials. Wage or salary payment also varies according to the geographical, regional and state’s economic development stage or standard of life in the area such as: (a) Geographical based – The economy of the regions varies according to their geographical location and resource availability. 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