During the recent class on HR practices, higher wages and benefits were cited as an effective way to improve employee motivation and productivity. The notion of making cuts to drive performance seemed to be frowned upon, as illustrated by poorly paid call centre workers with highly proceduralized and repetitive work. However, reducing hours and pay are also frequently used when performance is below par. This lead me to attempt to see if any formal support of such an approach has been articulated.

In this article (http://www.ilr.cornell.edu/ICS/InsightsAndConvenings/upload/research-for-the-real-world-03-11.pdf), the author mentions the “delayed payment” model, in which wages are deflated for entry level, and inflated for senior level personnel, in an attempt to make employees work harder towards the inflated higher wage. The model seems to be well used in environments in which employees are closely supervised and thus performance-linked pay can be effectively implemented.

Thus, this model seems to justify lower probationary pay. However, the theory requires the existence of higher pay in senior positions in the balance. It seems that an overall across-the-board wage cut, thought to reduce costs while creating a need for people to work more, does not create the wanted motivation.