Some of the factors that affect pay differentials include; educational qualification, experience, number of reports, discrimination, boss and working conditions.
There are certain educational qualifications for each and every job. The employees with much stronger qualification than the required ones will most probably get more salary than the employees with low qualifications. Educational qualification and the pay of an individual are directly proportional, Kaufman, Bruce (2005).
Experience is the length of the time you have worked in a similar job. Employees with experience of long time are believed to be used to the job and thus they are given a higher pay than employees with a short or no experience at all.
In certain jobs your pay will depend on the number of employees you manage. Their work also will affect your pay. The ones with more employees definitely will have more reports and thus they will receive a higher pay than the ones with less employees. Number of reports and pay are directly related.
Your boss will also affect your salary. If your boss is influential in the company, maybe because his work has always turned out to be successful and profitable, your request for salary increment is likely to go through. In case of a boss who is not influential, your request for salary increment is likely not to go through.
Some jobs are risky and others are not. In case of working conditions that involves risks, the pay is likely to be high compared to jobs that are considered to be less risky.
Discrimination in wages is a major problem in most companies in the world. An example is coca-cola company back in year 1999 when the company was sued by 1500 of its employees for racial discrimination. Such companies give higher salaries to employees from its country and lower salaries to employees from other countries. We can also have discrimination on the basis of gender where men are given a higher pay than women and vice versa and with similar occupations.