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 res ...Show more