Main factors that influence payment system
1. What organization can offer to pay: This describes the financial capacity and resources the company has, with which it can settle payments. This is also influenced by the level of skill of the individual, and his/her peculiar influence in company affairs. Organizations who place high value on excellent skills offer higher than orders but this is usually equivalent to the capital base with which the company operates.
2. Trade union and employee. Unions play a major role in payment method. Many a time, they usually decide minimum wages that members can get, and also ensure good working and welfare conditions for staff. Any action of company management interpreted by labor leaders as inimical to the welfare of their members is vehemently resisted.
3. Government and Initiative: Government decides the wage system of citizens through a scheme that is suitable for organized labor. This applies to civil servants. They also influence and intervene in payment issues, as situations demand. Through taxation, government also indirectly affects payment salary.
4. Legislation. There do exist labor laws that specify working agreements and guidelines for employment. It also specifies the wage system for workers.
5. Scarcity particular skills and relevance: Workers who have high relevance status and have become indispensable to company success enjoy higher payment than others. Besides, companies that have diversity policies also place high value on excellent workers.
6. Information Technology and Scientific innovations: This affects the quality, cost and delivery of company products. In a situation where this improves quality, there is concomitant increased customer patronage and profit for the company.
8. Performance of individual employee: this mars or makes staff. The influence is pellucid, as high-yield workers rise up the career leader, and thus get higher pays.
9. Company Policies: this entails the guidelines for business interactions between employer and employee that is decided by management. This takes into account existing labor laws, government policies, and the company’s agenda. It also includes a reward system.
Government, organized labor, company policies, and the personality and output of the worker influence payment method.