Conclusion and Implications

Abstract

The most recent development in pay theory proposes that pay, when used strategically, is a powerful means through which companies are able to secure competitive advantage. As a management tool, the advocates of what is now standard theory position pay as a lever through which management might enhance company performance and secure competitive advantage by attracting and retaining valued labour, driving effort and performance and encouraging desired behaviours among the broad-based workforce. Economy-wide pay trend data reviewed in Chapter 2 — the literature review — indicates that a significant number of employers have embraced a strategic approach to pay, especially within the private services sector. A review of pay trend data specific to the UK FMCG sector indicates an even greater inclination towards the use of strategic pay systems among companies.