Reference no: EM133043224

One of the Economic Strategies Committee's recent report on recommendations to help Singapore increase its productivity and economic growth is "To position Singapore as a Global-Asia hub for Global firms coming to Asia and Asian firms wanting to go global... To achieve this, mergers and acquisitions among small medium enterprises and co-operation between multinationals and small medium enterprises are encouraged." This requires Singapore to have a productive and talented workforce. With the new emphasis on productivity, the National Wages Council has called for wage increases to be pegged to an organization's productivity growth. This is based on the assumption that a flexible wage structure will further motivate workers to work smarter to gain economic incentives.

Singapore organizations with diverse workforce, knowledge and unionized workers, need to manage labour costs so as to achieve and sustain competitive advantage.

(a) Explain the 2 approaches to control salary levels and their impact on compensation policies for Singapore organizations. Support your answer with these theoretical explanations: Equity Theory, Tournament Theory and Efficiency Wage Theory.

(b) Compensation information is a strong signal. Changes in compensation strategy must be properly communicated.

"Signaling theory holds that employers deliberately design pay levels and mix as part of a strategy that signals to both prospective and current employees the kinds of behaviours that are sought."

Provide an example of an organization that has communicated its total reward design and management review effectively. Relate your example to the following issues:

i) What are the three (3) compensation objectives?

ii) How does the organisation communicate the differences in reward due to work differences in firms and industries?

iii) Do you agree that pay-for-performance is a signal to communicate employer's business objective? Support the answer with 2 motivation theories.