Industry-wide pay determination is the setting of salaries by firms considering what employees doing a similar job in the area are paid. According to (Milkovich, et al 2010) there are factors to consider when paying the salaries. They include; the experiences the firms hope to attract in various posts and how much they can afford to pay the employees and still make income. National wide pay determination is done by the government after carrying out a national survey. Governments use industry compensation table to estimate the disparity in various scales of pay as compared to similar jobs in different regions. According to the labor department, the countries carry out compensation survey nationally and this form the average base for compensation to be received by staff in all jobs in general.
Global workers are people or employees who can operate in various countries of different language and cultures. In the world, today there is growth of globalization and multinational companies. Globalization requires that more and more employees to function in a global market context. Employees who temporarily or permanently work in a country with different culture other than their upbringing are expatriates. An expatriate can also be defined as domestic employee of a multinational enterprise or its subsidiary with an oversee assignment. Third- country nationals are employees who neither from citizens of the home nor host countries. For example, a Spanish national working in the Tokyo subsidiary of a French company would be considered a third country national employee.
The government can affect businesses through the setting of minimum wage an employee should earn. The raising of wages creates additional cost to the firms. The government may dictate the required hourly rate and the hours employees should work. The government creates a price floor with the aim of maintaining an even distribution of income by simply raising the wages of the lowly paid tasks. Therefore, the companies affected by the minimum wages are those that provide the lowest-paid and lowest-skilled jobs. The government also should be there protects employees by rewriting or rescinding employees’ contracts that appear to be too exorbitant.
In a study, by Kreuger et al (1996) suggests that the wages of higher workers do not drop because there is an increase in the minimum wage either. Employers forced by law to spend more cash on minimum wage earners do not do so. As a rule, they make cuts in training or benefits for the highly paid. When implementing minimum wage standards, managers with no financial difficulty often increase wages for low-earners easily. The increase means maintaining a wage differential or paying hierarchy within an enterprises. Pay hierarchy causes an increase in employees’ wages who have been earning slightly above the minimum wage.
There are several reasons that can help reduce the pay gap in companies. The first to consider is the comparison of different jobs. Compensation depends on the job complexity, the experience, level of education of the employees. Also, other factors considered in the pay are performance and appraisals, companies, geographical location, industry and the personal attitude. Managers should address all these before embarking on trying to level the salary pay among its workers. If a company, is going to reward persons for their hard work for future pay increases or promotions, the enterprise often choose the workers that are reliable. If one staff is always away with children activities versus another employee who is always present, the worker not taking care of kids have an advantage for in promotion and pay increment. Finally, the companies need to narrow down the gender pay gap (Fortin & Lemieux, 2000). The difference in treatment of women and men equally qualified should be addressed. Discrimination of women would lower their incentives to invest in their qualification.