The employer share a different perspective while accounting for the salary package for the organization, the bench marking is conducted against the local industries, the profits of the company are monitored, the investment plans are verified and lastly the performance and need of the employee. The perspective shared by employer and employee are therefore distinct, and such distinction has in many cases failed to develop appropriate settlement between the parties on this issue (Mahler, 1986).
As per Adam's Equity Theory, the inputs and putputs of the employee shall maintain equilibrium. The performance of the employee is closely monitored by the employer on the scale of profit-return, productivity, and maintenance and functional cost-cutting. Therefore in many organizations the pay systems are exclusively designed to offer financial rewards to the individuals who have contributed to the organization, instead of offering such deals to all the employees (David, 2000).
There are systems where pay system is employee-centric, irrespective of contribution and performance of an individual, however such system has been nightmare for the employers due to the resignations of the high-performance employees, and consider it as unfair system. The employees have simple desire to be based fairly for their performance and achievements, and their salary shall necessarily take into account the cost of living. The employers share similar approach; however its execution is primarily profit margin driven followed by cost-cutting for the launch for new investment plans. This practice is widely common among the employers of South Asia inclusive of China, India, Malaysia and Thailand (Hamel, 2000). The pay system offered by the employers is in some of the cases driven by the economic condition of their respective country. It has been observed that different large corporate within India and China have always failed to comply by the aspiration of the employees in terms of financial remuneration, because the legislation of these countries bound the company to acquire maximum liquidity (John, 2007).
Pay Package: An Ideal Motivation
As per the Old Management Theory and Employee Motivation, the motivation of the employee is achieved through proper communication of targets with unprecedented rewards. The pay system launched by any company is the main motivation for the employees. On realistic note, the employee educate and work to earn money through legal and ethical means, the profit margins and production targets of the company are regarded as the requirement behind financial remuneration desired by the employees. If at any stage the employer fails to deliver as per the aspirations and expectations of the employee, there is substantial decline in the motivation and performance of the employee which in many cases is evident through their body-language. The failure ultimately results into frustration at work space, the performance declines and both the employee and employer have to face the consequences. From this discussion it is evident that