Chapter 12, Problem 11AA

To determine

To explain the factors which determine the payment to a worker.

Answer to Problem 11AA

There are various factors mentioned below:

·         The years of experience.

·         The performance.

·         Shift differential.

·         Ability to pay.

·         State regulations & labor unions.

·         Demand and supply of labor..

Explanation of Solution

The wages or salary of the workers is determined by the market and the sector in which they are working. It tends to be the same for the similar work in different industries as per the region and country it is in.

The factors which help in determining the pay of the workers can vary from region to region as per the availability of labor and its demand. If the demand is high but the supply of labor is less, then the wages would be high & vice versa. It also depends upon the ability of the employers for how much they can pay for a certain work involving the state regulations and taking care of the rights of the laborers.

Moreover the payment differs on the basis of shift differentials as the person who is working for more hours would be paid more for a certain work and vice versa and even depending upon the performance as it has a huge impact on the pay & the person can get promoted if performance keeps on improving.