Minimum Wage System and Poverty: A Study on Royal Dutch Shell

This report examines the concept of minimum wage and how it traps people in poverty, focusing on Royal Dutch Shell. It explores the concepts of equality and diversity, the minimum wage rate, and the impact of minimum wage on poverty. Recommendations for improving wage concepts and alleviating poverty are provided.

Research Project

Executive Summary
The present report is based on determining the system of minimum wage that traps the
workers in facing poverty specifically in Royal Dutch Shell Company. The study provides a
deeper insight relating the review and important aspects attached with the problem. It also
provides for different methods that could be used for making the study more as reliable and
valid.

Table of Content
Executive Summary.........................................................................................................................2
INTRODUCTION...........................................................................................................................4
Literature review..............................................................................................................................5
Research methodology.....................................................................................................................7
Data Analysis and Findings.............................................................................................................9
Discussion......................................................................................................................................14
Conclusion and Recommendations................................................................................................17
Reflection.......................................................................................................................................19
REFERENCES..............................................................................................................................20
Appendix........................................................................................................................................22

INTRODUCTION
The current study will focus on the working of Royal Dutch Shell and on the concept of
minimum wage system and how it draws people towards the poverty line.
Aims and objectives
Aim
“To examine the concept of minimum wage and how it traps people in the poverty: A study on
Royal Dutch shell.”
Research objectives
 To articulate the key concept of the equality and diversity attached with equal wage to
workers within the work environment.
 To study the concept of minimum wage rate within the business.
 To critically evaluate the way in whichleast wage traps the people into poverty.
 To facilitateappropriate recommendation for improve concept of wage & alleviating
poverty.
Research Questions
 What isthe concept of equality & diversity associated toproviding equal amount of wages
to employees in the workplace?
 What is the meaning of minimum wage in an enterprise?
 How minimum wage traps the people into poverty?
 What are better suggestions for improving concept of wage & alleviating poverty?

Literature review
Theme 1: Concept of diversity and equality at business premises
In accordance to Simonin and et.al. (2017), equality and the diversity are different
concepts that play a crucial role in the business organization and affects the smooth functioning
of business. Equality is the concept which as ensuring that each and every person in the company
has equal opportunity & must not be treated as discriminated or differently due to their features
or traits. On the other hand diversity relates to taking an account of differences between group of
the people & individual along with it placing positive value on such differences. It reflects that
all the workers need to be treated fair and equal y giving them with same set of the opportunities
irrespective of their age, sexuality, gender, culture, race and disability. Proving the employees
with fair wages would help the company in avoiding the trap for their workers due to wage
difference so that they might not be facing poverty condition in any case. Thus, it is very
important for the business concern to promote equality of an opportunity for all the employees
by way of diversity which depicts that giving equal chance to every person for the purpose of
achieving their best potential and preventing them from the poverty because of unequal wage. In
today’s dynamic environment all the firms are been encouraged in having their equal
employment policies which helps in protecting an individual rights of an employee whereas
ensuring the employers to stay on right side of law. This kind of policy is been designed for
preventing employment related disputes and an equal opportunity guidelineswhich helps in
ensuring that female workers must be offered same job as the male employees are been paid.
Theme 2: Stating minimum wage rate system in business
In view of Barrett, Garg and McBride (2016) minimum or least amount of wage policy
reveals that minimum value of the remuneration that employers is needed for paying the wage
earners with respect to work performed at a given point of time that could not be reduced
through collective agreement or individual contract. The main purpose or objective of the
minimum wage amount is introduced to protect the workers against lower pay. They helps in
ensuing equitable & just share of fruits of the progress for all and minimum living amount of
wage to all the individuals who are recruited and needs such protection. It can also be a
component of the policy in order to overcome the poverty and in reducing differences in terms of
men as well as women. This system need to be defined and set in a manner for reinforcing &
supplementing other kind of employment and social rule with an inclusion of collective
bargaining that in turn used for setting employment terms and the working conditions. As per
ILO convention, it is essential that minimum wage must be specific regarding elements of wage
that could be counted as minimum, conditions and an extent under which payment in form of
kind could be allowed.
Theme 3: Evaluating the way in which minimum wage rate traps the people in poverty

It is been argued by Chakraborty and Chakraborty (2018) that minimum wages must be
subsidized for encouragingsocial integration by way of employing at least skilled employees
with respect to decreased demand for unskilled workers. Subsidizing companies which contracts
with the workers whose wages falls below certain level has recommended as one of the major
mechanism in protecting an income from poor. There are several problems attached with the
subsidizing entities for the purpose of increasing employment or supporting income of poor
workers. Besides difficult for monitoring, subsidizes might also generate the poverty traps as it
reduces an incentive for workers and firms for raising wages & productivity above a threshold
level. However, wage subsidies might be used on temporary basis with above effect; it deemed
that the social welfare encourages workforce participation that might turn out as detrimental to
the minimum wage earners in long run. The idea behind subsidizing work might imply that work
performed resulted as invaluable. On other side, this puts a downward pressure on non-
subsidized part of minimum wages with an effect that minimum wage might become maximum
wage.

Research methodology
Type- The researcher can use mainly 2 types of the research that are qualitative &
quantitative research method. The former technique means as analyzing the qualitative features
attached to the issue for drawing appropriate findings & results. On other side, quantitative
method means as using mathematical or statistical tools for making numerical analysis so that
accurate and relevant findings can be generated (Cuervo‐Cazurra and et.al., 2017). In this study,
scholar has used qualitative method as it helps in gaining in depth knowledge regarding an
examination of minimum wage policy that result to trap the workers in poverty. It helps in
looking into deeper aspect relating to the problem and also encourages an investigator in
expanding its responses on new research sector or areas so that new findings or inferences can be
drawn with regard to new theories, concepts & products.
Approach- It is classified into two types that include inductive & deductive approach
which could be used by scholar for making the study as more valid (Ratnam, 2019). With respect
to this study, scholar had used Inductive approach means as the approach that starts with the
observation and ends at developing appropriate theories relating to investigating an effect of the
minimum wage on employees poverty line. This theory is counted as grounded because it allows
the flexibility which attends in close context & supports new generation theory.
Philosophy- It is been categorized in majorly two parts that is interpretivism and
positivism philosophy. Under this study, an investigator has adopted interpretivism philosophy
which integrates interest of an individual into the study and the components attached with study
are been analyzed (van Hees and et.al., 2016). This philosophy is considered as most suitable for
the purpose of making qualitative analysis relating to impact of wage rate system on the
efficiency and effectiveness of workers performance along with equality & diversity in the
business.
Obtaining data-There are 2 methods which a researcher can used to collect the data that
includes primary as well as secondary sources. Referring to this study, scholar has make used of
both primary & secondary sources for gathering the information relating to its research issue or
problem (Lynch and Mannion, 2016). It helps in collecting relevant data through the use of
common sources that is structuring questionnaire, conducting the survey, interview with
participant, using articles, journal, books and internet sources for obtaining appropriate
secondary data. This helps in application of right sampling tool and analysis technique which in
turn results to true and correct findings of study.
Sampling- It is also divided into 2 parts that involves probabilistic and non-probabilistic
sampling tool. The former method means as providing an equal chance to large population in
getting chosen as a sample. On other state, the latter technique is stated as the selection of sample
based on the subjective judgments and the members in the population are not be given equal

chance of being selected as the sample. In context of this study, an investigator has used simple
random sampling tool which is a type of the probability sampling in which the sample is been
selected by providing equal possible chance to population in being chosen. The sample of 20
employees of the company is been taken in form of the participant and respondent.
Data analysis- It can be done by making use of 2 methods that is SPSS and thematic
analysis. SPSS is the statistical software that is used for developing hypotheses and determining
the relationship between two or more variables attached with the research problem (Gura,
Shevchenko and Gura, 2016). On other note, thematic analysis includes preparation of several
themes based on objectives and the responses of the participant so that proper discussion and
conclusion can be presented along with appropriate recommendations. In this report, scholar has
applied thematic analysis in order to assess the data in adequate manner. This tool act as most
useful as it helps in understanding the qualitative attributes associated with minimum wage on
poverty condition of employees.
Ethical consideration- It act as most crucial part which states that the report must be
prepared in compliance with all the ethical aspects. For conducting the report ethically,
researcher has taken full consent of the participant which shows that they are not been
pressurized or subjected to harm in any manner (van Hees and et.al., 2016). Further, use of
misleading information & offensive language has been avoided which might hurt the sentiment
of respondent. Moreover, higher level of objectivity and privacy of the data is maintained to
ensure high ethical responsibility in the study.
Research limitation- In preparing for the research report, there are various challenges or
limitation that had been faced by the scholar that includes framing precise aims & objectives in
order to conduct the study by taking into wide area relating to the issue so that better analysis
could be made. Researcher has faced difficulty in selecting the sample size; however, by making
use of appropriate sampling tool adequate size of sample is selected.

Data Analysis and Findings
Theme 1: Respondents are aware with the concept of equality and diversity
Respondents
Yes 12
No 8
Yes No
0
2
4
6
8
10
12
14
13
7
Respondents
Theme 2:Yes, Royal Dutch Shell offer minimum wage to all employees
Respondents
Yes 14
No 6

13
7
Respondents
Yes No
Theme 3:Adhering with equality and diversity, company attract range of employees
Respondents
Strongly agreed 12
Agreed 5
Disagreed 3
Strongly disagreed 0
Strongly agreed Agreed Disagreed Strongly disagreed
15
4
1 0
Respondents
Theme 4:Yes, there is a positive relationship between minimum wage and poverty
Respondents
Strongly agreed 11
Agreed 5

Disagreed 3
Strongly disagreed 1
Strongly agreed Agreed Disagreed Strongly disagreed
15
4
1
0
Respondents
Theme 5:Respondents are strongly satisfied that minimum wage traps people in poverty
Respondents
Strongly agreed 15
Agreed 4
Disagreed 1
Strongly disagreed 0
15
4 1
Strongly agreed Agreed Disagreed Strongly disagreed
Theme 6: Company do not pay equal wage to all employees

Respondents
Strongly agreed 3
Agreed 2
Disagreed 11
Strongly disagreed 4
Strongly agreed Agreed Disagreed Strongly disagreed
0
2
4
6
8
10
12
14
16
15
4
1 0
Respondents
Theme 7: Yes, most of the employees are satisfied with the working environment
Respondents
Yes 13
No 6
Yes No
0
2
4
6
8
10
12
14
13
7
Respondents
Theme 8: Company invest to developing policies related to wages and reduce poverty

Respondents
Hire employees with low
wage rate
5
Paid leaves to existing
employees
4
Invest in any CSR policy 11
None of these 0
5
4
11
Respondents
Hire employees with low wage rate Paid leaves to existing employees
Invest in any CSR policy None of these
Theme 9: Yes, company comply with Equal Pay Act
Respondents
Strongly agreed 14
Agreed 3
Disagreed 2
Strongly disagreed 1

15
4
1
Respondents
Strongly agreed Agreed Disagreed Strongly disagreed
Discussion
In accordance with the primary study conducted in this project, it is analyzed that there
are majority of the respondents who are agree with the define concept of equality and diversity
within Royal Dutch Shell. So it is analyzed that company is following equality and also have a
diverse labor workforce which assist to meet the define aim. This is further supported by Barons
and Aspinall(2020) in which author stated that providing equal opportunities to their employees
and treat them equally is essential for the company because it help to sustain the brand image of
the firm in positive manner. Also, company should further ensure that organization must treat
their employee in fair manner without any discrimination.
Further with the help of first handed research it is also analyzed that more than half of the
respondents are completely agree that they offer minimum wage to all employees so that it do
not create a sense of discrimination, but some of them also stated no. Hence, it is further
supported under secondary research in which Castaño-Rosa and et.al.,(2020) explain that offering
minimum wages to their employees will help to promote the positive working environment and
this also creates a direct impact upon their working performance as well. On the other side, most
of the employees are also satisfied with the working environment of the company because they
have a skills and abilities in order to manage the define task. So it can be stated that by paying
equal amount to the employees will help to keep them engage within a working environment and
this in turn leads to improve the overall productivity of the company too. Also, company do no
discriminate the people on any basis and this in turn assist to improve the performance as well as
productivity within a firm
On the other side, it is also examined that more than half of the selected respondents are
completely agree that company’s equality and diversity policy within the workplace attract other
employees because it provide comfortable working area where employees learn new skills and

assist team in order to meet the define task of a company. That is why, Riyal Dutch Shell keep
encouraging employees and recruit diverse workforce by complying with define laws and
regulation which in turn assist to meet the define aim. Further, it is also supported by the views
of Robinson, Bouzarovski and Lindley(2018) that adhering with the define laws and regulation,
company is able to perform the work and also sustain the brand image within a working area. In
addition to this, there are many advantage of complying with laws because it keeps the entire
work towards right direction and build the brand image within a market place as well.
Moreover, around 15 employees of Royal Dutch Shell are agreed that minimum wage
traps people who are suffering from the poverty such that companies keep attracting young
teenage towards it but offering low amount which in turn affect the overall performance. Even in
the secondary research study it is also mention that most of the company operating within UK
offer minimum wages to young people and uses their talent and skills to meet their define aim.
But actually this leads to creates negative impact upon the business which in turn leads to affect
the society too. Also, majority of the selected workers are stated that company do not pay equal
amount to all the employees because company have their own rules and regulation in which it is
clearly mention that it pay amount on the basis of skills and capabilities which is not wrong. So,
it does not mean company do not comply with the laws, it do. Hence, to justify the same, Morris
and et.al.,(2018) also present their views and stated that if company pay equal amount to all the
employees from higher position to lower then it is unfair with the people who have a skill and
talent which is beneficial for the firm. That is why, it is realized that Royal Dutch Shell is not
doing any unfair with employees, because this term and condition is mention in the policies and
that is why, it has to maintain hierarchy as well.
Beside this, while conducting primary research it is analyzed that employees stated that
there are many policies in which company invest such that it keep invest for the welfare of
society because most of the employees are agree with the statement. While some of them stated
that it also hire employees with low rate in order to improve the poverty but many of them stated
that they paid leaves to existing employees in order to improve the wage. Hence, it is clearly
reflected that with the help of different policies company’s main focus is to improve the society
and provide a platform to the employees where they may show the ability. Pantazis(2016) also
supported the statement and stated that with the help of hiring employees at minimum wage rate,
company may easily meet the define aim and also solve the problem of poverty. So it is the good
step which a firm should take because it is help to creates positive impact upon society and this
in turn directly improve the poverty rate as well.
Apart from this, with the help of first handed research, selected respondents are agree that
company comply with Equal Pay Act in which it pay equal amount to employees by analyzing
the abilities and skill. Also, some of them are not agree but actually quoted company comply
with the laws and regulation which in turn leads to improve the brand image to society and
customers. Middlemiss(2017) present their views that each and every company have to offer the
lowest degree of remuneration to the employees because companies are legally abide to

government’s rules and regulation. It is so because the basic idea behind the minimum wage
offers is such that it creates a minimum standard of living which is quite useful to protect well-
being and a person is easily feed their families as well. Hence, it is reflected that government of
UK is especially designed the wage structure for all the age group people and also aware people
so that they know the criteria which in turn help to protect them from misleading.
Overall, it is stated that employees of quoted firm are quite aware with the concept of
minimum wage and company keep developing strategies in order to recruit the people which in
turn leads to decrease the poverty rate in UK. Thus, there is a strong relationship between the
minimum wage and poverty because when the minimum wage is increases, poverty do not
improve, as company are not easily hire people with such a high rate if they are not enough
capable (Hirsch and et.al., 2020). Thus, there is an inverse relationship between these terms and
that is why, it can be stated that if there is a higher cost within a market and company also
increase the price of product and that is why, employers do not have a chance to earn and this
affect the overall stability of a company. Even this also increase the poverty rate because
company do not hire people whether they are disable, men or women. So, there are many ways
through which minimum wage trap people who are suffering from poverty.

Conclusion and Recommendations
Conclusion
From the above research project, it has been concluded that the concept of minimum
wages draws employees towards the line of poverty and every company must provide fair wages
to its employees so that they can meet their expenses. The report focused on the Royal Dutch
Shell company and its distribution of wages to its employees. Furthermore, there were several
research objectives that focused on articulating the concept of equal wage payment towards
employees in the workplace, studying the concept of minimum wage rate in the organization,
critical evaluation regarding how the concept of minimum wage draws workers towards poverty,
and lastly recommendations to improve the concept of minimum wage and poverty in the
company. These research objectives helped in achieving a deeper insight within the research
project and identifying the root cause behind the problem of minimum wages.
The study also included a research methodology that helped in identifying, selecting and
analyzing information about the topic. It also supported the entire project and made it more
accurate as well as reliable. Lastly, it included a reflective writing to know the author’s opinion
and their learnings from the entire research project. It also focused on the collection of data and
the sources from where it was collected. Thus, at the end it can be stated that minimum wage
system must be changed and there must be some amendments that should be implemented to
make it much more beneficial for the workers and at the same time feasible for the organization
as well.
Recommendations
 It is imperative for every organization to provide more than minimum wages to its
employees as it would provide a better standard of living to its employees and further
increase their productivity (Grassetti, Mammana and Michetti, 2018). Moreover, the
government must also increase the minimum wage for all the individuals and make it
more flexible. Recommendation and benefits of increasing minimum wage are as
follows:
 Job satisfaction: Providing adequate wages increases the job satisfaction of employees
that further reduces the employee turnover rate. Moreover, it also increases the
motivation of employees and boosts their self-confidence to work effectively and
efficiently to achieve organizational goals and objectives.
 Retention: As stated, a raise in the wage of employees increases their loyalty towards the
organization as they feel a sense of belonging towards the workplace (Atkinson and et.al.,
2017). It further reduces the employee turnover and absenteeism rate which is beneficial
for the organization as it reduces their cost of recruiting and providing training to new
employees.

 Productivity: Providing fair wages which are above the rate of minimum wages plays a
very important role in improving the work productivity of employees. It increases their
focus and dedication towards the achievement of organizational goals which turns out to
be beneficial for the company in the long run.
 A work atmosphere where all the employees feel motivated and energetic to work, helps
the company in several ways as it not only helps in increasing the profitability of the
organization but also leads to reducing the manufacturing cost of products/services
(Zhang, 2017). Furthermore, it promotes peace and harmony within the company and
increases the brand image of the business in the market and help it in achieving
competitive advantage systematically.
 To tackle the minimum wage changes companies must understand the full impact of
reduced wages, then perform the what-if analysis, make a plan for changes to costs and
then take decisions to change.

Reflection
Referring to the research report I have gained my knowledge and deeper insights towards
the policy of minimum wage system at workplace and its importance for the company in the long
run. The research also helped me in collecting information and further improved my knowledge
in regards to primary and secondary data. I collected majority of the data from secondary sources
like journals, books, research articles and newspapers (Hudson and et.al., 2017). Furthermore, it
helped in realizing the importance of equal wage system and how it helps in creating a positive
atmosphere within the workforce, also it increases the overall efficiency and productivity of
employees further contributing towards the profitability of the organization.
The research project turned out to be very useful for me as it made me familiar with the
problem of wage gap and how some organizations discriminate towards its employees on the
basis of gender, race, caste, creed, colour and religion. All the employees must be given the
minimum wage as set by the government and all private companies must follow it. Along with
quantitative research, I also performed qualitative research by allocating data from employees
through an open-ended conversation. It helped me in understanding their psychology, thoughts,
and opinions regarding equal wage payment and increased the depth of the research project.

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Appendix
Questionnaire
1. Are you aware with the concept of Equality and Diversity?
 Yes
 No
2. Does your company offer minimum wage to all the employees?
 Yes
 No
3. Do you think company’s equality and diversity policy within the workplace attract other
employees?
 Yes
 No
4. Is there any positive relationship between the minimum wage and poverty?
 Strongly agreed
 Agreed
 Disagreed
 Strongly disagreed
5. Up to what extent do you agree with the statement i.e. minimum wage traps people in poverty?
 Strongly agreed
 Agreed
 Disagreed
 Strongly disagreed
6. Does Royal Dutch Shell have pay equal wages to their employees?
 Strongly agreed
 Agreed
 Disagreed
 Strongly disagreed
7. Are you satisfied within the working environment of the company?
 Yes
 No
8. What are the policies implemented by the company to improve the wages and alleviate poverty?
 Hire employees with low wage rate
 Paid leaves to existing employees
 Invest in any CSR policy

 None of these
9. Do you agree that company comply with Equal Pay Act?
 Strongly agreed
 Agreed
 Disagreed
 Strongly disagreed
10. Recommend the best ways through which the company improve the poverty and wage?