The main objective of this paper is to present an assessment of the concept of market competitiveness in the light of an organization being unable to meet the pay demands of its employees. Alternative approaches are also discussed, namely how to handle the situation for continued operations of an organization. In addition, this discussion will also cover three steps that could be taken to minimize the impacts arising from the state, which has an effect of impeding the success of the business enterprise.
Market competitiveness refers to a situation whereby a firm is under a threat of losing its employees because of paying low salaries and wages (Balkin and Cardy, 2008). The wages and salaries offered by the market are higher than what the subject firm is ready and able to pay. There are numerous reasons for such a scenario to unfold. Probably, the firm is just starting and lacks enough funds since its income sources are limited and unstable. Additionally, it is also possible that the firm has experienced losses during the previous periods and is thereby unable to meet the pay demands of its employees. For whatever reasons, a firm faces serious challenges that require satisfactory settlement.
When a firm is unable to match the market in remuneration terms, its workers would obviously be disgruntled. Many employees, rational ones, would seek alternative job appointments in companies or firms where the pay matches the value of work or services they offer. Every employee would desire to be paid the highest salary offered in the market (Budd, 2004). Employees may quit their current jobs for better paying ones whenever they are successful in seeking alternative jobs. Consequently, this has an effect of increasing employee turnover in a firm that cannot compete with its competitors in terms of wages and salaries.
With regards to economics and management concepts, wages and salaries offered act as a motivator for workers. In circumstances where they are poorly remunerated, their preference on their current jobs would be compromised. Firms that fail to match the market pay risk to lose gifted and qualified staff (Dubin, 1958). Unfortunately, this happens because workers may be forced to quit for better paying jobs, which will leave the firm with employees who cannot secure an alternative employment. The morale in the firm would also be low, which has a negative effect on the firm’s productivity.
Alternative approaches for an organization facing challenges
Money or remuneration is one of the greatest motivators to workers or employees (Stone, 2005). Actually, this is because high wages allow employees to meet their needs comfortably. Other factors that motivate or boost the employees’ morale in the work place include good work relations like employee involvement in decision-making and programs that support the employees in career development. A good example is offering of scholarships. A fair treatment of employees through appreciation and promotion of talent and innovations based on merit will also have a positive result.
In the event that an organization is experiencing the challenge of market competitiveness in offering a better pay to its employees, it can turn to other areas in a bid to motivate and tie down its workers from moving to other companies. Such programs where employees are involved in decision-making impart a feeling or sense of being a part of the firm’s success. They would give maximum efforts to help their firm turn around from incurring losses into profitmaking. Taking part in career development through awarding of scholarships to deserving employees and rewarding exemplary performances would serve to improve the morale and working environment in the firm (Dubin, 1958).
The above-discussed challenge has the capacity of causing negative effects on the operations of the firm. Losing of experienced and qualified employees is a cost. To minimize the magnitude of losses resulting from the challenge, the three following steps should be taken to limit the effects. The first step is to make sound and appropriate decisions, which should signal or indicate the direction the firm is taking to achieve their objectives. As a result, no losses would be incurred in the future giving hope to the employees that the financial resources of the firm would improve. The management should also guarantee employees on the operations of the firm and ensure an adequate compensation. By the way, this must be supported by sound decisions being made by the organization. The last step would entail sourcing for finance. Exemplary, experienced, efficient, and effective employees must be remunerated adequately (Budd, 2004). Actually, this should be equal to what the market offers. The overall goal is to minimize employee turnover, especially the most valuable employees.
In conclusion, it should be mentioned that business organizations are started for the sole purpose of getting profit. To attain this objective, a lot of resources are applied for the operations. Human resource is one of the critical inputs towards effective production. In cases where an organization is unable to match the market on remuneration rates to employees, market competitiveness would play to the disadvantage of the firm (Balkin & Cardy, 2008). Consequently, this will present a big challenge that would require sound decisions to address. Salaries and wages are among the most important motivators of employees. If an organization faces such a challenge, it is necessary to explore other available avenues to ensure that employees are motivated to avoid high rates of employee turnover. In addition, experienced, qualified and efficient employees are retained at whatever costs for the effective continuation of an organization’s operations. Finally, this would guarantee normal running of operations within the organization.
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Budd, J. (2004). Employment with a human face: Balancing efficiency, equity, and voice.
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Dubin, R. (1958). The world of work: Industrial society and human relations. Englewood
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Stone, R. (2005). Human resource management (5th ed.). Milton, Qld: John Wiley.