Fair Work Commission Australia is an independent body which has the authority in setting minimum employment standards (wages) and requirements to ensure fairness during the employment phase (Fair work commission, n.d). Therefore, employers had the responsibilities to ensure that their employees are well taken care of. As the industries are changing rapidly over the years, employers are required to take note on the fair employment practices to ensure that the employees are motivated to perform their duties to achieve the organisation goal. Discussion on labour and supply demand, efficiency wage theory, performance evaluation and pay for performance will be mentioned in the article on what employers should focus on and provide a healthy working environment for their employees. In all competitive markets, the amount of workers to be hired is determined by the supply and demand in the market. It is known that workers will tend to work more at the cost of their leisure when their wages are low and caused an increase in the supply of labour (Pettinger, 2012). On the other hand, a worker will work lesser hours when their wages increases. Therefore, such effects will be seen clearly in a labour supply curve in Figure 1, where there will be a backward bending to show that the income effect took place in a worker when the wages increase. However, there is a …show more content…
It is believed that by paying a premium to the employees will induce in an increase in productivity, responsibilities and loyalty (Westley and Schmidt, 2006). In other words, if employees did not receive such premium, they will not be motivated. The organisation will face an increase in turnover and dissatisfaction (Akerlof & Yellen, 1986). The main purpose of this theory is to attract employees with a premium wage that they are unable to find