6 Myths

Jeffrey Pfeffer, Ph.D., is the Thomas D. Dee II Professor of Organizational Behavior at the Graduate School of Business, Stanford University, and is considered one of today's most influential management thinkers[1][2]. He is the author of over a dozen books including The Human Equation: Building Profits by Putting People First, Managing with Power: Politics and Influence in Organizations, TheKnowing-Doing Gap: How Smart Companies Turn Knowledge Into Action, Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People, Hard Facts, Dangerous Half-Truths, and Total Nonsense: Profiting from Evidence-Based Management, and What Were They Thinking? Unconventional Wisdom About Management. Pfeffer also has written a collection of 27 essays about management topics, as wellas more than 120 articles. Pfeffer’s newest book, entitled Power: Why Some People Have It—And Others Don't was published and released in September 2010 .[3] Pfeffer strives to educate and inspire leaders to seek power through evidence-based management, the knowing-doing gap, high performance culture, and unconventional wisdom.

Six Dangerous Myth About pay
Introduction: The assignment is onthe “Six Dangerous Myth About Pay” article by Jefferey Pfeffer. He has described six myths about pay that managers believe to be true. The myths and reality given are results of author’s research. But do we agree to the myths or reality written or we have any other opinions. My opinions about the myths are described below.

Myth No.01: Labour Rates and Labour Costs are the same thing:

Laborrates and labor cost are considered to be the same but there is a differentiation. Labor rate is actually the wages worker get for working. We can say total salary divided by time worked is labor rate. Job categories lead to different labor rates because of classification of jobs like executive to hourly paid employees. On the other hand labor cost is calculated through productivity. Suppose inShajalal manufacturing plant pays Tk10/hour to 100 employees for producing (#) of units of readymade garments 50 hours. So there labor rate is [(100*100*50)/50 hours] Tk 1000 per hour and labor cost is Tk 50,000. On the other hand Madina manufacturing plant pays Tk15/hour to 100 employees for producing (#) of units of same readymade garments 30 hours. So there labor rate is [(15*100*30)/50 hours] Tk1500 per hour and their labor cost is Tk.45,000. Although labor rate of Madina is Tk. 1,500/hour is higher than Shajalal but still Labor cost at Madina is lower than Shajalal.

Myth #2: You can lower your labor cost by cutting labor rate

In today’s globalization market where competition is everywhere I could not agree with this myth. Organization’s always make sure while hiring employee thatthey hire the best possible. The reason is that a skilled, experienced labor/s rate may be high but their productivity is higher than unskilled or inexperience labor. By doing so, they make sure their productivity is higher than average and as a result stay competitive in the market. For example if a software company wants to cut...

Six Dangerous Myths About Pay
In the “Harvard Business Reviewon Managing People”, an article by Jeffrey Pfeffer states that businesspeople are adopting wrongheaded notions about how to pay people and why. In particular businesspeople are under six dangerous myths about pay. Here, I present you my understandings of that research paper.

Myth #1: Labor rates are the same as labor costs.
Myth #2: Cutting labor rates will lower labor costs.
Myth #3: Laborcosts represent a large portion of a company’s total costs.
Myth #4: Keeping labor costs low creates a substantial competitive edge.
Myth #5: Individual incentive pay improves performance.
Myth #6: People work primarily for the money.

Explanation of Myth #1 and Myth #2: A labor rate is total salary paid to the labor force divided by total time worked by them. But, labor costs take...