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Economic Analysis: Theory and Practice
 

Economic analysis of the efficient wage model under conditions of professional mobility

Vol. 14, Iss. 3, JANUARY 2015

PDF  Article PDF Version

Available online: 18 January 2015

Subject Heading: ECONOMIC AND MATHEMATICAL MODELING

JEL Classification: 

Pages: 59-66

Machin K.A. Polzunov Altai State Technical University, Barnaul, Altai region, Russian Federation
matschin@yandex.ru

The modern dynamically developing society imposes new exclusive standards on abilities and efforts of employees of an enterprise . This determines the points of contact between the economic interests of workers and employers. Companies seek to maximize their profits, and workers maximize their individual utility. The clash of these goals is effectively regulated by market mechanism based on efficient wages formation. Decisions about wage rate in conditions of impossibility to exercise absolute control over actions and performance of workers should be made on the basis of the principles of the efficient wage theory. If an employee has a spectrum of competencies in several professions, his efficient wage should take it into consideration, otherwise, the employee may move to another company, which offers a higher rate based on the whole range of his competences. Under the conditions of occupational mobility, an enterprise should be fully knowledgeable about professional competences of its employees and build up an individual remuneration system for each employee taking into account the full range of competences. The main purpose of the research is the formation of an economic mechanism of occupational mobility on the basis of modeling of solution on efficient wages. While forming efficient wages, a company should consider all abilities of an employee to maintain his efforts at high level and to eliminate shirking. The growth of current remuneration must always take into account the rates in the same occupational group of other enterprises and the remuneration in the occupational group, to which the employee may leave. If the company sets efficient wages for its employees, their performance will also be efficient. The findings will be useful to economists of HR departments for establishing an effective system of staff remuneration.

Keywords: professional mobility, efficient wages, non-competitive groups, worker efforts, labor efficiency

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