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Managing People, 2nd Edition by Andrew Thompson, Michael Riley

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19  Pay administration

An earlier chapter discussed the potency of pay as a motivator, but whether that is true or not, what is certain is that pay is always philosophical! You are what you pay. This might seem strange at first, but the way an organization pays its employees contains a philosophy about how they are motivated. An organization which wishes to retain staff and motivate them through loyalty might adopt a paternalistic pay philosophy whereby all new employees receive all benefits from their first day – nothing is conditional. Such an organization might feel that they can best utilize labour and develop flexibility when the labour force is stable. Alternatively, another organization may have a philosophy of conditional merit, whereby ...

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