Impact of Wages on Employee Performance: A Restaurant Case Study

This report investigates the significant impact of wage rates on employee performance within the restaurant industry, using a case study in Denmark. It delves into the background, aiming to determine how wage rates affect work performance, and sets objectives to analyze the connection between wage rates and employee productivity, while also critically analyzing potential threats stemming from wage policies. The rationale emphasizes the importance of employee motivation and the role of wage rates in achieving organizational goals. The report explores the significance of this research for organizations and researchers. It is structured with chapters covering introduction, literature review, research methodology, data analysis, results, and conclusion. The literature review explores how wage rates influence productivity, employee satisfaction, and the potential for conflicts or decreased productivity due to wage policies. The report highlights key factors, such as employee creativity, feedback, and completion time, and also delves into the effects of salary, bonuses, and incentives on employee motivation and performance.

IMPACT OF WAGES RATE
OF EMPLOYEES IN
RESTAURANT
INDUSTRIES AND THEIR
WORK PERFORMANCE-
“A CASE STUDY IN
DENMARK

TABLE OF CONTENTS
MAIN BODY...................................................................................................................................3
Background information.............................................................................................................3
Aim..............................................................................................................................................4
Objectives....................................................................................................................................4
Rationale.....................................................................................................................................5
Significance.................................................................................................................................5
Structure......................................................................................................................................6
REFERENCES................................................................................................................................7

MAIN BODY
Background information
This research will mainly enlighten the wage rate used in Noma restaurant and this wage
rate poses an impact on the productivity as well as motivational level of their employees.
Wage rate is basically the money which is being paid to the workers for every unity of their
labour input and thus is measured on the basis of hourly time. Sometimes it is measured on the
basis of unit of the output produced by the workers. In short, wage rate is amount of the base
which is paid to the workers of an organization, industry or factory for the amount of work done
by them. Wage rate plays an important role in an organization and thus affects the performance
of the employees to a high extent. This wage rate is directly associated with the satisfaction as
well as motivational level of the employees (Bender and et.al.,2018). Employees are the integral
part of any organization and thus have crucial role to play. Employees who remain motivated as
well as committed to their work helps to attain the business objectives in a most imperative way
as they give their best in each and every aspect of their job. Employees only get motivated when
they receive the proper services as well as wages for the work done by them from the
management of organization. Thus, in order to ensure that employees remain motivated to a high
level as well as remain committed towards their work, organization need to ensure that each and
every worker is receiving equal pay for the work which is same in nature and responsibility. It is
highly obvious that every worker works for providing his or her family a better living and
appropriate standard of living thus when organization will not provide proper and equal wages to
their employees then this will lead to decrease in motivational level and will affect the turnover
rate of corporation.
The wage rate plays a highly crucial as well as vital role in the employee productivity.
The productivity of employees are generally measured by the level of output generated by them
against the work done by them. In short, employee productivity is mainly addressees the
efficiency of the workers for performing the particular tasks. Wage rate triggers the productivity
in a highly different way. For example- when the organization or enterprise sets an equal pay
structure of their workers and thus provides timely disbursement of their wages then a sense of
commitment as well as trust is generated within the workers for management and thus they
endeavors to give their best in order to achieve their individual as well as organizational goals.
Besides this, When the organization provides an unexpected rise within their wage rate then

workers tend to become highly enthusiastic and work hard for achieving a great pay rise. This
eventually increased their productivity and overall performance. Thus, in this way wage rate is
one of the major motivating factor which helps to increase the productivity of employees. On the
other side of spectrum, when organization exercises inequality and remains unfair in disbursing
the wages to their workers then a sense of frustration and anger is filled within workers which
results in their decreased performance as they do not strive to give their best for organization
treating them unfairly (Riley and Bondibene, 2017). For example- if organization provides
unequal wages for the similar nature of woke performed requiring similar responsibility then this
eventually reduces the contribution of employees towards organization and thus their overall
performance decreases.
Wage rate policy is basically legislation of the government actions which are undertaken
for regulating level as well as structure of the wages in order to ensure social and economic
policy. The wage rate policy although has ensured the welfare of the entire community but it has
also posed various threats.
Conflict is one of the major threat which might occur due to the emergence of the wage rate
policy. The conflict normally occurs in the union as well as non-union. The increase within
union strength generally results in the increase of non-union wages along with decrease in the
non-union employment and this gives rise to a conflict between these two. Thus, this is the major
threat which might affect the organization in a negative way (Weber, Gonen and Spiegel, 2017).
Decrease in productivity is the another threat which might occur due to the emergence of
wage rate policy. Under the wage policy, it is addressed that each and every worker should
receive an equal pay performing similar nature of duty having same responsibility, similar roles.
Thus, when the workers will receive a high pay due to their outstanding performance then this
creates a sense of anger within other workers and this eventually decreases their productivity. As
productivity is directly linked to the position of organization in market thus this will be a great
threat to the organization. This decrease in productivity might impact the overall performance of
organization in market.
Aim
To find out how the wage rate will affect work performance of the employees.
Objectives
To determine whether wages rate affect work performance of employees.

To analyze how wage rate can be connected for employee productivity
To critically analyze possible threats due to wage policy
Rationale
The main rationale of carrying out this study is to study that how the wage rate mainly
affects the performance as well as productivity of the employees. In the organizations whether
big or small, it is highly essential to motivate the employees as they form the most important part
of the organization. Wage rate have a crucial as well as vital role to play within organization and
thus is the most important motivational factor. The major rationale behind selecting this topic is
to study the importance of wage rate in organization and thus help them to have a deep insight of
how wage rate can effectively impact the productivity as well as overall performance of their
employees. Besides this, the most important purpose of carrying out this study is to help the
organization in designing the favourable as well as appropriate wage structure. This topic will
also help the other researchers in carrying out the similar study and will help them to have better
understanding of wage rate and its related aspects. Along with this, another main rationale for
carrying out this research is that it will help the various other organization at commercial level to
understand that what is the contribution of wage rate in performance of their overall enterprise
and how it affects the performance of employees. Besides this, this research has been carried due
to personal interest as it will help the researcher at the corporate level.
Significance
This research can be highly useful for large number of researchers as well as the
organizations. Firstly, it will help the various organizations to understand the importance if wage
rate. It will assist the organizations as well as firms to devise the most appropriate wage structure
which will eventually help their employees to give their best and work with high commitment.
Besides this, it will also help the organizations to design numerous strategies which they can
apply for providing the equal pay and reduce conflict among employees. Secondly, the main
significance as well as importance of this research is that it will help the large number of
researchers for carrying out their study (Maestas, Mullen and Powell, 2016). This will provide an
effective information to the researchers along with various statistics. Besides this, study will also
help researchers at their academic as well as commercial level to understand that how wage rate
is one of the influential factor in organization and why it is essential to consider it as part of
organizational strategy. Besides this, another importance as well as significance of carrying out

this study is that it will help the various workers as well as employees in the organization to
become aware of the different wage policies. This research will raise awareness among the
employees as well as workers regarding discrimination, inequality etc.
Structure
This research will mainly consist of six chapters. First chapter will consist of introduction
and overview of the topic. Second chapter will cover literature review, Third chapter will consist
of research methodology. Fourth and fifth chapter will cover data analysis and decision and
result. Sixth which is last chapter will consist of conclusion.

Chapter 2
Literature Review
According to (Hill and et.al., 2016) In order to achieve the growth rate standards of performance
needs to be set by the company so that employees of the company can be trained according to
that and work by putting all of their efforts and skills so that they can achieve the goals and
objectives of the company. They need to prioritize their task and work on that before anything
else. It is advised that employees of the company must use effective and creative methods so that
they can accomplish the duties of the task. The most important part of this aspect is that the
managers of the company need to assess the quality of work of their employees. This is
measured by regularly managing and monitoring the efforts of their employees and the deliveries
they made to their clients. In order to evaluate the work performance of employees the most
important factor is creativity of the employees in completing the task. Managers of the company
assess the assumptions taken by the employees in order to look check the impact of their
assumption they took and how it helped the company to achieve growth. By this companies can
reward those employees who achieved the goals and objectives of the task. Apart from this there
are other factors which are taken into consideration such as consistent improvement. Managers
of the company believe that no one is good in every area but they can improve and enhance their
performance by working on it each day. In accordance with (Pollin and Wicks-Lim, 2016)
Employees of the company needs to keep one thing in mind that in order to improve they need to
react and take actions on the feedback from the consumers as they are dealing in service industry
and in order to excel in that industry one needs to improve on factors which are pointed out by
the customers. Managers of the restaurant looks at those areas in which they have benefited from
the employees and the performance of the company. Restaurant calculates the revenue from
different venues which they own so that they can figure out from which area how much they
have earned. Each ream maintains up the level of task to be completed in time as manager of the
restaurant assess the performance of employees on the basis of this aspect which is the
completion time of task and ensure to look out for those things which are beneficial for the
growth of the company. They also evaluate factors such as quality of task completed.
In accordance with (Bruttel, 2019) many of the workers feel that it is necessary to feel
satisfied at their workplace only then they will able to prove their worth to the restaurant and
increase their productivity. One of the major things which makes them satisfied with their job is

the salary they are offered in relation with the work they are asked to do. They feel that they
must get a decent paycheck and additional bonuses such as incentives so that they can deliver the
work according to their potential and help the restaurant to serve more people. Salary is offered
according to the time spent on job and it is fixed. It is fixed for everyone and provides them with
security. Some of the employees feel that even if they work less they will get their money
according to the time they give on the job but not all of them feels that some employees want to
earn more and they feel that they must get more for their quality work. Restaurant needs to be
increase their salary on the basis of their performance as it will keep then motivated and increase
their productivity rather than increasing it on the basis of time they are spending on the job this
will reduce the amount of quality work in the restaurant. As per the view of (Neumark, 2019)
Managers of the restaurant can take eliminate the system of hourly wages and pay them by
different method which is through piecework. Pay per piece is effective and suitable for those
business who are dealing in the restaurant sector as it requires skilled employees and those
people are paid on the basis of talent they possess. Manager of the restaurant hires new
employees and increase their pay check with time and practice as it will help them to gain
experience and without experience they pay or offer no one, This scheme of pay check is offered
to people mostly who are freelancers or writers. Employees have the option to increase their
paycheck and that is to increase the productivity of work. This also has negative effects as there
are many cases in which the increment in salary has backfired on the employees. Some
employees don't work as a team they start to work on their own and be more competitive in order
to earn more, but they do not realize that they are affecting the capacity of restaurant to serve
more people. Restaurant may offer additional benefits to one employee because of his
performance but not to all of them. Some employees misuse this treatment by the restaurant and
tends to get inefficient for the company and loose their productivity which affects the
performance as well as the business of the restaurant. It also affects the quality of work among
other employees. Restaurant needs to implement a set of tools that focuses on other aspects other
than just increasing the salary of employees. They also need to focus on boosting the morale of
the employees by giving a example to their employees so that they can increase their paycheck.

REFERENCES
Books & Journals
Bender, S and et.al.,2018. Management practices, workforce selection, and productivity. Journal
of Labor Economics. 36(S1). pp.S371-S409.
Maestas, N., Mullen, K.J. and Powell, D., 2016. The effect of population aging on economic
growth, the labor force and productivity (No. w22452). National Bureau of Economic
Research.
Riley, R. and Bondibene, C.R., 2017. Raising the standard: Minimum wages and firm
productivity. Labour Economics.44. pp.27-50.
Weber, M., Gonen, L.D. and Spiegel, U., 2017. The Impact of Wage and Labour Flexibility on
Employers and Employees. Journal of Business.5(4). pp.108-119.
Hill, H., and et.al., 2016. Early Evidence on the Impact of Seattle’s Minimum Wage
Ordinance. University of Washington.
Bruttel, O., 2019. The effects of the new statutory minimum wage in Germany: a first assessment
of the evidence. Journal for Labour Market Research, 53(1), p.10.
Neumark, D., 2019. The econometrics and economics of the employment effects of minimum
wages: Getting from known unknowns to known knowns. German Economic
Review, 20(3), pp.293-329.
Pollin, R. and Wicks-Lim, J., 2016. A $15 US minimum wage: How the fast-food industry could
adjust without shedding jobs. Journal of Economic Issues, 50(3), pp.716-744.