PROS AND CONS OFINCENTIVE PAY&INTERNATIONAL FACTORS AFFECTING HUMAN RESOURCESByY.SAI SARATHINCENTIVE PAYPay specifcally designed to energize, direct, or control employees behavior. Incentive pay is infuential because the amount paid is linked to certain predefned behaviors or outcomes.In order to fulfll the motivations that push employees to strive, especially in the case of scarce goods, its important to give them some sort of an incentive to do so.PROS AND CONS OFINCENTIVE PAYCONSADVANTAGESIncreases Productivity:An employee inen!i"e p#o$#%m in#e%&e& !'e p#o()!i"i!y o* !'e employee&. E"e#yone +no,& 'o, impo#!%n! money i&. To -)y om*o#! in li*e. !o !%+e %#e o* !'e (%y/!o/(%y nee(&. e%' %n( e"e#y pe#&on nee(& money. T'e employee& !oo *eel mo!i"%!e( !o $i"e !'ei# -e&!. i* !'ey +no, !'%! !'e mo#e !'ey pe#*o#m. !'e mo#e &%l%#y !'ey $e! !o !%+e %,%y 'ome.Employee inen!i"e pl%n& %n on!#i-)!e immen&ely !o $#o)p p#o()!i"i!y %& ,ell. I* pl%nne( ,ell. !'ey %n -#in$ !'e !e%m !o$e!'e#. Fo# in&!%ne. i* in&!e%( o* +eepin$ in(i"i()%l inen!i"e&. %n o#$%ni0%!ion pl%n& !o $i"e !e%m inen!i"e&. !'e employee& ,ill -e mo#e ,illin$ !o 'elp one %no!'e#. T'e 'i$' pe#*o#me#& ,ill )n(e#&!%n( !'%! !'ey ,ill $e! inen!i"e& only i* !'e lo, pe#*o#me#& )p !'e 1)%li!y o* !'ei# ,o#+. %n( !')& ,ill -e mo#e ,illin$ !o 'elp !'ei# &lo, pe#*o#min$ !e%mm%!e&.Enhances PerformanceT'e#e i& no (o)-! %-o)! !'e *%! !'%! inen!i"e p#o$#%m& en'%ne !'e employee&2 pe#*o#m%ne. I* !'e employee& '%"e -een ,o#+in$ in !'e o#$%ni0%!ion *o# &ome !ime. !'ey mi$'! *eel -o#e( ,i!' !'ei# ,o#+. Fo# &)' employee&. %n inen!i"e p#o$#%m. ,'i' p#omi&e& !o p%y !'em mo#e *o# !'ei# ,o#+ o# $i"e& !'em inen!i"e& li+e % *%mily 'oli(%y !o % *o#ei$n lo%!ion. %n %! %& % m%3o# pe#*o#m%ne -oo&!e#.Contributes to Employee RetentionI* % l)#%!i"e inen!i"e p#o$#%m i& in pl%e. !'e employee& ,'o pe#*o#m mo#e. ,o)l( no! ,%n! !o &,i!' 3o-&. T')&. %n inen!i"e p#o$#%m ,'i' o**e#& mo#e &%l%#y %n( on"eniene& !o !'e employee&. on!#i-)!e& !o employee #e!en!ion. &%"in$ % lo! o* 'i#in$ %n( !#%inin$ o&!& *o# !'e o#$%ni0%!ion.De-motivates Employees:On !'e *lip &i(e. employee inen!i"e i(e%& %n &ome!ime& (e/mo!i"%!e e#!%in employee& %n( -%+*i#e. I* in(i"i()%l inen!i"e& %#e $i"en -y %n o#$%ni0%!ion %n( &ome o* !'e employee& %#e )n%-le !o mee! !'ei# $o%l&. !'ey ,o)l( o-"io)&ly no! $e! !'e inen!i"e&. On !'e o!'e# '%n(. !'ei# olle%$)e&. ,'o o)!pe#*o#m. %n -ene*i! % lo! *#om !'e inen!i"e&. T'i& %n $#e%!ly (e/mo!i"%!e !'e lo, pe#*o#me#& %n( !'ey mi$'! no! e"en m%+e !'e e**o#!& !o #e%' !'ei# !%#$e!. T'i& %n -e (e!#imen!%l !o !'e o#$%ni0%!ion %& % ,'ole.Creates Conflicts:Ano!'e# (#%,-%+ i& !'%! i* inen!i"e& %#e -%&e( on $#o)p pe#*o#m%ne. !'e !op pe#*o#me#&. ,'o o-"io)&ly on!#i-)!e mo#e !o !e%m $o%l&. mi$'! *eel !'%! !'ey %#e ,o#+in$ mo#e -)! %#e -ein$ $i"en !'e &%me inen!i"e& %& !'e lo, pe#*o#me#&. T'i& %n #e%!e m%ny on*li!& in !'e !e%m. ,'i' %n %**e! !'e !e%m2& ,o#+ %n( %-ili!y. in !'e lon$ #)n.Contrary to TeamworkInen!i"e p#o$#%m& %n &ome!ime& #e%!e %n en"i#onmen! o* e4!#eme ompe!i!i"ene&&. T'i& i& no! $oo( *o# o**ie& in ,'i' mo&! o* !'e 3o-& %#e (one in !e%m&. Compe!i!i"ene&& %n #e%!e #e&en!men! %n( 'ene. %**e! !'e #el%!ion&'ip -e!,een !'e !e%m mem-e#&. T'i& (e#e%&e& !'e %-ili!y o* !'e employee& !o ,o#+ in !e%m&.On !'e -#i$'! &i(e. &)' p#o$#%m& mo!i"%!e employee& %n( 'elp !'e o#$%ni0%!ion %'ie"e i!& $o%l&. On !'e *lip &i(e. !'ey #e%!e on*li!&. m%y &ome!ime& lo,e# !'e 1)%li!y o* ,o#+ %n( %n '%mpe# !e%m ,o#+. In &pi!e o* !'e&e ,e%+ne&&e&. i* employee inen!i"e p#o$#%m& %#e ,ell/pl%nne(. &imple. #e%li&!i. me%&)#%-le %n( !ime( ,ell. !'ey %n on!#i-)!e immen&ely !o %n o#$%ni0%!ion2& &)e&&.INTERNATIONAL FACTORS AFFECTING HUMAN RESOURCESE()%!ionEonomi &y&!em&Poli!i%l/le$%l &y&!em&EDUCATION AND S5ILL LEVELSCountries also dier in the degree to !hich their labor markets include people !ith education and skills of value to employers. "he #nited $tates suers from a shortage of skilled !orkers in many occupations, and the problem is e%pected to increase. &or e%ample, the need for kno!ledge !orkers 'engineers, teachers, scientists, health care !orkers( is e%pected to gro! almost t!ice as fast as the overall rate of )ob gro!th in the #nited $tates. *n the other hand, the labor markets in many countries are very attractive because they oer high skills and lo! !ages.+ducational opportunities also vary from one country to another. In general, spending on education is greater per pupil in high,income countries than in poorer countries.Poverty, diseases such as aids, and political turmoil keep children a!ay from $chool in some areas. - concerted international eort to provide universal access to primary education has dramatically reduced the number and proportion of children !ithout access to schooling. .o!ever, the problem persists in sub,$aharan -frica and is signifcant but declining in $outh -sia. Companies !ith foreign operations locate in countries !here they can fnd suitable employees. "he education and skill levels of a countrys labor force aect ho! and the e%tent to !hich companies !ant to operate there. In countries !ith a poorly educated population, companies !ill limit their activities to lo!,skill, lo!,!age )obs. In contrast, Indias large pool of !ell,trained technical !orkers is one reason that the country has become a popular location for outsourcing computer programming )obs.+/#C-"I*0 -0/ $1I22 2+3+2$ - countrys economic system, !hether capitalist or socialist, as !ell as the governments involvement in the economy through ta%es or compensation, price controls, and other activities, infuences human resource management practices in a number of !ays. -s !ith all aspects of a regions or countrys life, the economic system and culture are likely to be closely tied, providing many of the incentives or disincentives for developing the value of the labor force. $ocialist economic systems provide ample opportunities for educational development because the education system is free to students. -t the same time, socialism may not provide economic re!ards 'higher pay( for increasing ones education. In capitalist systems, students bear more of the cost of their education, but employers re!ard those !ho invest in education. "he health of an economic system aects human resource management. In developed countries !ith great !ealth, labor costs are relatively high. $uch dierences sho! up in compensation systems and in recruiting and selection decisions.+C*0*4IC $5$"+4+C*0*4IC$5$"+4In $ene#%l. &oi%li&! &y&!em& !%+e % 'i$'e# pe#en!%$e o* e%' ,o#+e#6& inome %& !'e ,o#+e#6& inome in#e%&e&. C%pi!%li&! &y&!em& !en( !o le! ,o#+e#& +eep mo#e o* !'ei# e%#nin$&. In !'i& ,%y. &oi%li&m #e(i&!#i-)!e& ,e%l!' *#om 'i$' e%#ne#& !o !'e poo#. ,'ile %pi!%li&m %pp%#en!ly #e,%#(& in(i"i()%l %ompli&'men!&. In %ny %&e. &ine !'e %mo)n! o* !%+e/'ome p%y % ,o#+e# #eei"e& %*!e# !%4e& m%y !')& (i**e# *#om o)n!#y !o o)n!#y. in %n o#$%ni0%!ion !'%! p%y& !,o m%n%$e#& in !,o o)n!#ie& 7899.999 e%'. !'e m%n%$e# in one o)n!#y mi$'! !%+e 'ome mo#e !'%n !'e m%n%$e# in !'e o!'e# o)n!#y. S)' (i**e#ene& m%+e p%y &!#)!)#e& mo#e ompli%!e( ,'en !'ey #o&& n%!ion%l -o)n(%#ie&. %n( !'ey %n %**e! #e#)i!in$ o* %n(i(%!e& *#om mo#e !'%n one o)n!#y.POLITICAL LEGAL SYSTEMAo)n!#y6&poli!i%l/le$%l&y&!em:i!&$o"e#nmen!l%,&%n( #e$)l%!ion&:&!#on$ly impin$e& on ')m%n #e&o)#e m%n%$emen!. T'e o)n!#y6& l%,& o*!en (i!%!e !'e #e1)i#emen!& *o# e#!%in HRM p#%!ie&.&)'%&!#%inin$.ompen&%!ion.'i#in$.*i#in$.%n( l%yo**&. A&,eno!e(in!'e(i&)&&iono*)l!)#e.!'epoli!i%l/le$%l&y&!em %#i&e&!o%l%#$e(e$#ee*#om!'e)l!)#ein,'i'i!e4i&!&.&ol%,& %n( #e$)l%!ion& #e*le! )l!)#%l "%l)e&.Fo# e4%mple. !'e Uni!e( S!%!e& '%& le( !'e ,o#l( in elimin%!in$ (iimin%!ion in !'e ,o#+pl%e. Be%)&e !'i& "%l)e i& impo#!%n! in U.S. )l!)#e. !'e n%!ion '%& le$%l &%*e$)%#(& &)' %& !'e e1)%l employmen! oppo#!)ni!y l%,&. ,'i' %**e! 'i#in$ %n( o!'e# HRM (ei&ion&. A& % &oie!y. !'e Uni!e( S!%!e& %l&o '%& &!#on$ -elie*& #e$%#(in$ !'e *%i#ne&& o* p%y &y&!em&. T')&. !'e F%i# L%-o# S!%n(%#(& A! %mon$ o!'e# l%,& %n( #e$)l%!ion&. &e!& % minim)m ,%$e *o# % "%#ie!y o* 3o-&. O!'e# l%,& %n( #e$)l%!ion& (i!%!e m)' o* !'e p#oe&& o* ne$o!i%!ion -e!,een )nion& %n( m%n%$emen!. All !'e&e %#e e4%mple& o* l%,& %n( #e$)l%!ion& !'%! %**e! !'e p#%!ie o* HRM in !'e Uni!e( S!%!e&.P*2I"IC-2 2+6-2 $5$"+4Simil%#ly. l%,& %n( #e$)l%!ion& in o!'e# o)n!#ie& #e*le! !'e no#m& o* !'ei# )l!)#e&. In ;e&!e#n E)#ope. ,'e#e m%ny o)n!#ie& '%"e '%( &!#on$ &oi%li&! p%#!ie&. &ome l%,& '%"e -een %ime( %! p#o!e!in$ !'e #i$'!& %n( -ene*i!& o* ,o#+e#&. Un!il #een!ly. ,o#+e#& in Ge#m%ny %n( F#%ne '%( An$lo/S%4on mo(el? emp'%&i0in$ p#o()!i"i!y. m%ny '%"e m%(e one&&ion&. T'e E)#ope%n Union6& &!%n(%#( pe#mi!& ,o#+,ee+& o* )p !o @A 'o)#&. An o#$%ni0%!ion !'%! e4p%n(& in!e#n%!ion%lly m)&! $%in e4pe#!i&e in !'e 'o&! o)n!#y6& le$%l #e1)i#emen!& %n( ,%y& o* (e%lin$ ,i!' i!& le$%l &y&!em. o*!en le%(in$ o#$%ni0%!ion& !o 'i#e one o# mo#e 'o&!/o)n!#y n%!ion%l& !o 'elp in !'e p#oe&&. Some o)n!#ie& '%"e l%,& #e1)i#in$ !'%! % e#!%in pe#en!%$e o* !'e employee& o* %ny *o#ei$n/o,ne( &)-&i(i%#y -e 'o&!/o)n!#y n%!ion%l&. %n( in !'e on!e4! o* o)# (i&)&&ion 'e#e. !'i& le$%l '%llen$e !o %n o#$%ni0%!ion6& HRM m%y 'ol( %n %("%n!%$e i* '%n(le( #e%!i"ely.