In the labor market, workers’ compensation is a key consideration and a determinant that defines the performance of an organization. Wages are very influential and effective in various industries since they directly correlate with employees’ productivity. Increasing the workers’ monthly income would allow them to have excess money for saving. This essay paper will determine the impact of wage generosity in saving and evaluate the relationship between increasing minimum wages and the performance of the business enterprise.
Most of the spending incurred by a company are directly related to hiring and training new workers in an organization. Assuming the corporation is able to retain its workforce by offering them good compensation rates, it wil be able to accrue and save much money. Such is possible due to limited expenditures on acquiring new staff members (Green, n.d.). Therefore, it is possible for a firm through generous wages to reduce unnecessary spendings thus leaving it with more cash to invest in other operations.
In the industry, several firms are competing for the service for workers, which increases the competition for labor in the market. This makes it a concern for the most business organization to take into consideration the welfare of workers. Most companies offer generous wages to ensure they retain the services of the employees for their short and long-term benefits (Taube, 2014). Most container stores usually pay their employees higher wagers to attain the following aspects.
Reduces Turnover Rates
Most employees are professionals that value the reward they receive from the firm in terms of compensation. When the company cannot offer a good salary to the workers in relation to other firms, chances of the staffs quitting to join other business will increase. This will imply that the organization will continue losing its team members and continuously recurring the cost of hiring new ones. Most containers have been paying higher wages to their worjers because they want to. However, if the enterprise gives good packages and compensation, workers will be encouraged to work irrespective of the working conditions.
Increases Productivity
When employees receive good compensation, they will devote their energy, skills, and abilities to deliver their best to the company. In other words, employees’ attention will be directed at the job because they feel satisfied with the wages given (Taube, 2014). The staff will not engage in resistance since most of their needs would be well taken care of by the salary offered. Increased productivity will then add value to the business as most workers explore their knowledge to add new ideas that can add a competitive advantage to the industry.
Improved Performance
A company that gives proper wages to its workers has a high likelihood of performing well in the market. It will experience less resistance and turnover that can hinder its operations. Furthermore, employees will focus on the goals, making the firm capable of meeting its set objectives (Green, n.d.). The business organization will also reduce unnecessary spending like hiring because workers will be retained once employed, thus allowing the firm to save or invest such funds in other activities.
Improved Employees’ Living Standards
When the company raises minimum wages, employees will be able to afford their basic wants and other developmental needs in their families. This will improve the living standards of workers and their close relatives. Furthermore, good compensation reduces the stress employees have about failure in achieving their goals. This would ensure limited mental health issues within the families and society (Taube, 2014). Increased income makes the employees in the society initiate projects that would benefit the community, thus changing the overall living style of the people around.
In conclusion, generous wages enable workers to add excess money to save for future use. Companies should consider increasing their minimum wages to advance their performance in the market and increase staff members’ overall productivity. Good compensation makes employees less resistant and more innovative since they give their best while offering services to both business and its customers. Moreover, salary increment makes the container stores retain their employees.
References
Green, T. (n.d.). Is the Container Store paying its employees too much? The Motley Fool. Web.
Taube, A. (2014). Why the Container Store pays its retail employees $50,000 a year. Business Insider. Web.