International reward managment Essay Example | Topics and Well Written Essays - 2500 words

International reward managment - Essay Example Ricardo’s theories included free market economy and wage control. These theoretical ideas have been significant in formulation of policies (O’Brian 2004). The period after the Second World War, known as the neo classic economics era saw the emergence of new arguments. John Keynes defined and explained â€Å"fiscal policy† as a measure that governments can adopt to stimulate the economy and solve unemployment issues (Braman 1996).The differences in economic arguments and thoughts across the eras provide different analysis, critiques and solutions concerning pay and reward systems. The contribution of economists to the compensation of labor debate has been fundamental in designing and forecasting the consequences of the different approaches to employee rewards and compensation (Beaumont and Hunter 2000). On the other hand, sociologist criticized economists’ contributions for being too abstract and lacking concrete empirical evidence (Wootton 1955). Nevertheless, these orthodox theories are core to the economic theory of pay and can help solve problems that experts face in cases of executive compensation and profit sharing schemes (Beaumont & Hunter 2000). This essay focuses on the critique of the three major orthodox economic theories regarding pay and reward structures, that is, the classical wage theory, human capital theory and efficiency wage theory. Additionally, this paper relates social theory to these critiques by tackling the social factor of equal pay. The paper also discusses gender pay gaps and the inequalities and discriminations that arise from reward structures in the global labor market. JR Hicks first defined the classical wage theory in his publications of â€Å"the theory of wages†. In his studies, Hicks tackled wage problems in a free market economy and came up with a model of determining wages based on previous analysis of theories