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A study on the major wage theories and their relevance

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  1. An Introduction to the concept of wages
  2. What are wage theories?
  3. Substance theory of wages
  4. Surplus Value theory
  5. Wage Fund theory
  6. Residual Claimant theory
  7. Bargaining Power theory
  8. Marginal Productivity theory
  9. Efficiency theory
  10. Agency theory
  11. Expectancy theory
  12. Behavioral theory
  13. Equity theory
  14. Conclusion
  15. References

Wages are income derived from human labor. Salaries are similar to wages, but denote a more routine and constant payment on a time bound basis, as opposed to a work-bound payment association of wages. The term Wage and Salary encompass remuneration and fringe benefits sponsored by the employer, such as paid vacations, holidays, paid sick leaves, pensions, health insurance, and also bonuses or stock options usually linked to individual or group performance. Though wages and salaries thereby cover all compensation made to employees for either physical or mental work, they still do not represent the income of the self-employed. Total labor costs of an organization include items such as cafeterias, transportation, meeting rooms and other such employee related expenses incurred by the employer for the convenience of employees.

[...] CONCLUSION The wage theories form the basis on which organizations devise their compensation systems. The two key foundations upon which such systems rest are internal equity and market competitiveness. Research has indicated a direct correlation between pay knowledge and pay satisfaction. If employees know how their pay is set, and if the managers explain the process behind the setting of the pay in terms of internal equity and market competitiveness, then employees would tend to remain satisfied with their pay, job, and level and would try to increase their pay by increasing productivity. [...]

[...] On the Principles of Political Economy and Taxation chapter On Wages. Library of Economics and Liberty. Retrieved 27 May 2009, from Unemployment, Efficiency and Wages. Retrieved 27 May 2009, from Books and Articles Abraham, Katharine G & Katz, Lawrence F "Cyclical Unemployment: Sectoral Shifts or Aggregate Disturbances." Journal of Political Economy, University of Chicago Press, p507-22. Akerlof and Yellen (1990). The Fair Wage-Effort Hypothesis and Unemployment. Quarterly Journal of Economics, 105(2), p255-283. Akerlof, George (1982). Labor Contracts as Partial Gift Exchange. [...]

[...] Wages, Employment and the Threat of Collective Action by Workers. NBER Working Papers 1856, National Bureau of Economic Research, Inc. Dickens, William, T., Katz, Lawrence, F., & Lang, Kevin. (1986). Are Efficiency Wages Efficient?. NBER Working Papers 1935, National Bureau of Economic Research, Inc. Dufwenberg & Kirchsteiger (2000). Reciprocity and wage undercutting. European Economic Review 44 p069-1078 Farrell Bloch & Mark S. Kuskin. (1978). "Wage determination in the union and nonunion sectors?, Industrial and Labor Relations Review, ILR Review, ILR School, Cornell University. [...]

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