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consideration when planning a new pay structure in an organisation. It also covers methods of developing; introducing and evaluating new pay structures. Organisations in towards era have to move at a fast pace while adjusting to the changes in the internal and external environment. These pressure make these organisations react indifferent manners, it could be delayering, project based, flexible or continuous.

The emphasis is on continuous improvements in terms of performance management, reward management, personnel appraisal, quality control and customer service. The quality of human resources within an organisation is considered a significant advantage and differentiating factor. The focus should also be on business strategies and using systems like reward management and performance appraisal to bring about change in organisations. The reward concept is a focused effort of various forms of rewards, base pay, variable pay, benefits and non-financial rewards. The significance of pay revolves around motivational strategy, attracting and retaining employees in their job roles to build a more effective organisation.

The non-financial rewards include more recognition, praise, and training options, responsibility and although more studies on organisational behaviour have revealed that it’s the non-financial rewards, which have more scope for retaining employees. It was in the year 1990 that Ed Bawler spoke about the limitations of using this approach, “The starting point for any reward system design process needs to be the strategic agenda of the organisation. Thus the first step in designing the reward system for an organisation is to focus on the individual and organisational behaviours that are needed in order for the organisation to be successful”. Bawler further enhanced and improvised on this belief to cover all organisations, “The business strategy, in particular, serves as a crucial guide in designing organisational systems because it specifies what the company wants to accomplish, how it wants to behave, and the kinds of performance and performance levels it must demonstrate to be effective”.

[Michael Armstrong (2001), cap 1-15]

Shaun Tyson and Alfred York (1989) in their books ‘Personnel Management’, talk about how most organisations design their pay and wage packages based on the hierarchy. Another big difference is that blue-collar jobs are usually at an hourly rate, the wages are paid weekly or monthly basis and the salary earners are the ones who are Gina middle or senior management position. The differences are not limited to the salary; they also extend to the additional perks and benefits, which are offered to the employees. The objectives of a policy towards making a payment could be described as to ‘remain competitive for labour whilst rewarding good performance and adopting a position on pay which is felt to be fair by all employees.’ [Shaun Tyson and Alfred York (1989), cap 210-211]

The distinction that companies enjoy while treating different job roles with different salary structures is a matter of internal personnel philosophy. There are certain important criterions, which needs to be considered while planning a salary and wages structure –

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