Attracting Employees using Wage Differential

Employee Benefits
Knowledge Center

Forum
James Antwi
HR Consultant, Ghana

Attracting Employees using Wage Differential

🔥NEW A wage differential, also called "compensating differential" or "compensating wage differential" or "equalizing difference", is defined as the additional amount of income that a given worker must be offered in order to motivate her to accept a given undesirable job, relative to other jobs that worker could perform.
How can we use the theory of 'wage equalizing differentials' to attract skilled workers to remote and rural areas in low income countries?
Is the mode of application the same in both developed world and developing economies?

  Mohun Aujayeb
HR Consultant, Mauritius
 

Compensating Differential Incentive Pay

If a worker is asked to perform a work/job/task that is normally not performed by others in that group/grade, it makes sense to additionally compensate that worker. Such workers who are exposed to insalubrious and risky conditions which may affect health are generally given 10-20 % as incentive to attract and retain them on that particular job.
Workers exposed to unfavourable conditions like foul odor, radiation risks, etc. are also given incentive pay in the public sector in Mauritius.

  Jaap de Jonge
Editor, Netherlands
 

Negative Compensating Differential

One can also speak of a "compensating differential...

  Jaap de Jonge
Editor, Netherlands
 

Attract Workers by Offering More Pay

There is a lot of "clearing labour markets"-litera...

 

More on Employee Benefits:
Summary
Special Interest Group

Do you have a keen interest in Employee Benefits? Become our SIG Leader

Employee Benefits
Knowledge Center



About 12manage | Advertising | Link to us / Cite us | Privacy | Suggestions | Terms of Service
2022 12manage - The Executive Fast Track. V15.8 - Last updated: 25-6-2022. All names of their owners.