Pros And Cons Of Two Tier Wages Plans

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Introduction The concept of having a two-tier wages program is an issue that continues to elicit mixed reactions. The rationale used in the adoption of a two tier wages plan is that organizations will be maintaining a high number of talented employees within the organization. However, the outcome of the two tier wages plan is not as one would expect. On the contrary, the inherent wage disparity for groups in the same job category causes differences in the level of motivation. The argument here is that the two tier wages plan provide an enormous amount of problems than it solves. Employee Value Propositions Difference in Two Tier Wage Plans A two tier wages plan system causes the employee body to perceive an organization as having stratified …show more content…

Employees receiving lower wages will ultimately transit to other organizations that will value their input. Thirdly, organizations without the two tier wages plan tend to attract and retain highly talented employees, which is a disadvantage to the organization practicing a two tier wages plan. How Management, Employees, and Unions Address the Issue The management try to address these challenges by creating a flexible two tier wages plan. Employees try to manage these issues by venturing out to other organizations that value their input. Unions address these issues by creating a level platform. Pros and Cons of Two-Tier Wages Plans for Management, Employees, and Union Organizations continue to lose talented employees under the two tier wages plan. However, these organizations also benefit from lower operations cost. Employees lose morale under the two tier wages plan. However, they gain through skill development. Unions benefit by being a bridge between employers and employees. Conclusion & Recommendations In conclusion, the two tier wages plan will continue to thrive. However, future trends indicate consistent patterns of salary negotiations. Thirdly, organizations need to have increased flexibilities in their programs to maintain the top performing

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