Prevailing Market Rate or Going Wage Rate

What do you mean by Prevailing Market Rate or “Going Wage Rate”?

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This is practically the major factor that induces any organization to take it as a base while determining wage and salary structure for it. Prevailing market rate is also known as ‘most comparable rate of wage’, and most popular method for wage rate determination, especially for lower cadre positions. There are many reasons for an organization to pay wages at a market rate like competition and a practice of ‘Brain Drain’ prevails in the market. Furthermore certain laws framed laid down principal of ‘minimum wages’, ‘equal wage for equal work’. In addition to this trade unions are also prefer to bargain upon and in accordance with market rate of wages.

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