Rewards Management for Subsistence Theory of Wages- myassignmenthelp

Question: Discuss about theRewards Management for Subsistence Theory of Wages. Answer: Introduction Human resource has been considered as one of the integral and expensive asset for any of the business entity. Maintaining and managing this asset is a crucial task and should be effectively and efficiently executed. A proper management of human resource will be reflected in the increased performance level and productivity of the organization. And hence, timely motivation is must. Rewards system is one of the approaches which will be aiding the entity in offering the employees with the desired level of satisfaction (Shields et al., 2015). The below executed analysis has been made focused on the rewards systems which can be adopted by the business organizations. The report has been primarily made focused on the approaches which are linked to the reward management system. Contrasting theoretical approaches of minimum wage determination The below presented are the theoretical approaches which have been critically evaluated: Subsistence theory of wages The above mentioned theory was framed by Physiocratic school of economist of 18th century (Renz, 2016). Moreover, further developments and improvements were made by the German economists Lasalle. Afterwards it was named or styled as the Iron law of wages and brazen. More contribution was offered by Ricardo and Malthus to this theory. Assumptions On the basis of the research conducted by Ricardo the below mentioned are the two assumptions on which the theory is based: A hike will be observed in the population As per the approach, wages of a labor for long run are resolute on the basis of the level of wages which are found to be sufficient for meeting the necessities of life and this level is termed as the subsistence level (Kumar and Varaiya, 2015). Neutral level of wages is the term which has been referred by the classical economists. This made the pro-pounders of the theory to keep a belief on the bargaining power of the labors. And in these situations the trade unifications played an integral role in bringing an enhancement in the wages. There is no difference found in the wages of labor and subsistence level for long run (Armstrong and Taylor, 2014). And if there is a decrease in the level of wages then the workers would face a situation of starving and which will bring a reduction in the supply and this wage rate will provide a hike to the subsistence level Whereas, if there is an increase in the wages as compared to the subsistence level the labors would be encouraged to bear more childrens and which will bring an increase in the labor supply (Hughes, 2015). And this will bring the subsistence level down. Criticism:- On the basis of the conducted research it has been noted that there are some defects of the subsistence theory of wages which are mentioned as follows: One sided theory: The theory executes examination only one side of the wage determination .i.e. supply and the demand aspect is ignored. Pessimistic: The subsistence theory of wages has a high level of pessimistic for the working class. A dark or a negative image of the future of the society is also presented. Long period: Assumption of long run is the base of this theory and it does not provide any kind of description of determination of wages for a specific time period (Haider et al., 2015). Marginal productivity of wages The above mentioned theory has been considered as an integral theory for the concept of wages. For first the theory was propounded by Thunnen and later some modifications were made by the economists like Wicksteed, Walras, and J.B Clark. The theory of marginal productivity states that the contribution served by the labor is the criteria on which the labors are paid. The main reason for which the manufacturer hires the labor is the ability which is possessed by him and which will tend him to offer to contribute to the production process (Johnston and Marshall, 2016). The more the contribution of the labor the more will be the wages paid to him and the same is in the case of low contribution the wages offered will be low. According to Dooley it has been analyzed that the term marginal productivity of labor can also be referred to the change in the total revenue by adding one more laborer and keeping all the other elements constant (Albalooshi, Ali and Al-Ansi, 2017). Whereas it has been described by the Prof S.E Thomas that as an outcome of the completion between workforce for labor and laborers for employment determination of wage rate and that is equal to the marginal productivity of labor force the owners are willing to employ. Criticism:- Unrealistic assumptions: The primary defect or fault with the theory is that it is based on impractical expectations such as homogenous character of labor; perfect completion etc. and all these assumptions do not prevail in real world. Incomplete: One more fault detected in the theory is that it fails to address into account that labor is also a occupation of wages (Joseph, 2014). The reason for low productivity may be due to the impact of low wages which have adverse impacts over the efficiency of the labor and which also leads in bringing a reduction in the labor productivity. Static theory: A criticism over the theory has been done by Lord J M Keynes that the theory is based on the static situations. This theory is proved true only when there are no changes in the economy. But in case of real practices this fails as change is the law of nature though it may come gradually. Alignment of stakeholders approaches with reward management Stakeholder is the person or the group of person who takes interest in organizational activities. Stakeholders could be affected with the organizational actions, policies, etc. Directors, employees, shareholders, suppliers, etc. are some of the crucial stakeholders of the organization. There are two types of stakeholders, one is internal and the other one is external stakeholders (Tyson, 2014). The person or the group of person linked up with the organization in the organizational premises is known as internal stakeholders such as employees, directors, managers, etc. Apart from them, all are included in the external stakeholders category such as investors, suppliers, shareholders, etc. Contemporary reward management program defines the fulfillment of the employees basic needs, prospering them adequately in relation with their performances, etc. in order to motivate them towards their tasks. In terms of the FCA (fair Work Commission), organization needs to follow the rules described by them in relation with the internal stakeholders of the organization i.e. employees (Riasat, Aslam and Nisar, 2016). These are vital element of the organization and their contribution becomes the strength for the organization in order to attain its goals and the objectives. FCA has declared some rules in relation with the industries, organizations with regards to the minimum wages for the employees in the Australia. With the effect of this rule, no organization could hire any employee below the wages described under Fair Work Act, 2009. Apart from the basic pay, this act also defines that employee should be prospered with the adequate amount of incentives, bonuses, additional benefits as per their performances. Providing additional benefits to the employees in relation with their performances helps them to get motivated and along with the employees who get additional benefits, other employees also gets motivated and they start performing better in relation with their past performances with regards to prospered with the additional benefits. This helps the organization to attain its goals and the objectives in an adequate manner. In relation to the stakeholders, approach of contemporary reward management says that every stakeholder should be flourished in monetary or in the kind form as per their performances. From directors till the workers in the internal stakeholders and from suppliers till the investors in the external stakeholders plays crucial role in organizational performances (Emmer and Sabornie, 2014). Hence, they should be flourished as per their performances in order to motivate them which will lead to complete the tasks in the certain period of time with positive outcomes. Conclusion In the limelight of the above executed analysis it has been concluded that human resource is the most valuable asset for any of the business organization and a proper management of the same should be implemented within each and every organization. Hence the above report has been made focused on the rewards systems which can be implemented so as to enhance the effectiveness and performance level. 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