One of the reasons behind someone being the labor or employee of a company is to earn an income as wages or compensation. Wages are earned can fulfill necessities, for example, housing, clothing, and food. Each company should be viable in setting the amount of the wage paid to an employee so that the least wage is given to meet the needs of their life. The calculation of wages not only increases the necessities of worth living, but also increases inflation, financial development, and employee productivity.
The idea of productivity of work is partitioned into two sections: Individual productivity & Organizational productivity. Individual dimension related to the characteristics of the personality qualities of the individual shows up as mental attitude and individual endeavors to improve personal satisfaction. Organizational dimensions look productivity inside the system of the relationship between input & output techniques.
Let’s discuss the impacts which directly affects Employee Productivity:
1. Supply & Demand
In a free market, wages are determined by the competing forces of supply and demand. A manufacturer, after extremely careful planning, reasons that he can make and sell such a large number of a specific item at a given cost. He must gather his assets, including his plant, his managerial talents, his equipment, and workers, and hope to recover the expense of these things from the value purchasers will pay for the completed item.
So, the manufacturer goes into the labor market to employ men to work for him. If his offered wage isn’t sufficiently high to get the laborers he needs, at that point, he should either give up the project or figure how to recombine his resources so that he can pay higher wages and still end up as a winner. He may do this by simplifying his manufacturing processes, by presenting more or better machinery, or by developments of some sort.
On the other hand, the worker will take care of his advantage as well and will consider moving to a new position, if it appears to be more appealing to him for reasons of a higher wage, better working conditions, shorter days, more vacation, or whatever. But suppose some manufacturer comes along with an item he can make or sell very profitably. It might be a direct result of patents he holds, or special procedures or skills that only he knows about. He might almost certainly stand to pay wages half again as high as the going wage in the area and still beat the competition, shouldn’t he do this?
2. Different Alternatives
In a free market, he is at the freedom to pay the higher wage if he wishes. In any case, if he has had some experience in manufacturing, he realizes that challenge is behind each tree and somebody will make sense of an approach to put a competing product available that will undersell his, with his high labor costs, in which case he may find himself without his normal buyers. So, he will probably choose to pay the going wage for his laborers, or simply enough more to fill his needs, and utilize the vast majority of his technological advantages to reduce costs to the buyer and construct his market. If, in the beginning, he can increase a handsome benefit for himself and his investors, he will have a cushion with which to meet the competition sure to come.
This has nothing to do with a specific businessman offering his laborer’s production incentives. He may accept that his laborers will create more for him if he gives them each Wednesday afternoon off, or he may give them a share in the benefits of the firm, or he may pay them on a piece-work basis. That much be each employer’s choice, but most will offer a base wage rate not significantly different from the going wage in the territory.
3. Competition The Key
Why have wages in the administrations expanded throughout the years about as much as those in highly automated industries? In one case, the productivity of doing the job may not have increased by any means, while in the other, it might have expanded ten times.
Competition is the answer. If you need a man to cut your hair, you should pay enough to keep him from getting down to business in an industrial facility or at some other occupation. As a result, we have what might be referred to as a compensation level for the whole economy. This is a somewhat mythical figure, not very significant because of the variability of individual abilities. for example, consumers will pay significantly more for the services of a talented mind specialist than for the services of a messenger.
Conclusion
The wages result is important for employee productivity because a lack of reward is the potential reason for decreasing worker’s productivity and wage is the most impact production, the successful employee gets his/her rights through compensation framework for their wages. Then again, the employee’s productivity plays an important role in organizational execution and the quick factors that increase employee productivity are great capital.
