TABLE OF CONTENTS The following four chapters look at the major management tools used to develop and administer reward systems. These are concerned with two absolute essentials in reward systems: external competitiveness and internal equity or fairness.
One of the major causes of friction between employers and their employees, between individual employees and between groups of employees is a real or perceived lack of fairness in the distribution of wages. For many years British industry was bedevilled with industrial strife caused by 'pay differentials'. Today we have two extreme approaches to the determination of wages. At one extreme we have total transparency in which every employee can know what everyone else earns, e.g. in many public sector organizations. At the other extreme are employers who not only keep secret what they pay each employee but also make it a condition of employment that salaries are not to be discussed between staff.
If dissatisfaction is to be avoided, or if equal pay for work of equal value disputes are to be avoided, a methodical, fair and transparent approach to the award of wages and salaries is essential for harmonious relationships to exist at all levels within an enterprise. In organizations of any reasonable size, this can probably be achieved only if the relative value of each job is recognized; to do this, a system of ranking jobs in order of importance needs to...
