The main idea of ​​the theory of compensating differences. Compensating wage differences: safety requirements

The concept of suffrage and the essence of elections. Elections are carried out at various levels of society: in public organizations their leadership is elected, in joint-stock companies - a board of directors or other body, in cooperatives - boards, etc. Many government bodies are also elected at the center (parliaments or at least their lower houses, presidents), and local government bodies - councils, mayors, etc. - are elected locally. Most bodies elected by citizens are called generally representative. In the rarest of cases, a prime minister is elected directly by citizens: in 1996, such elections were held for the first time in Israel. Elections are the most important instrument for the legitimacy of state power; they ensure the selection of the political elite and are one of the defining characteristics of state life and the state regime.

Elections of state bodies and state officials are: general (throughout the entire territory of the state) and regional;

regular (within a specified period) and extraordinary, repeated (if the elections are declared invalid), etc.

Direct and indirect elections. Direct elections are the direct election by citizens of their representatives to state bodies, individual officials (for example, the president). Almost always (with the exception of, for example, the Kingdom of Bhutan), deputies of the lower house of parliament, unicameral parliament, lower local government bodies (community councils), and other local government bodies are elected by direct elections. However, in this case there are exceptions. In some Muslim countries (Bangladesh, Pakistan), a certain number of women deputies to the lower house are elected by the parliament itself, and in a unicameral parliament there may be a small number of deputies appointed by the president from among the country's prominent citizens (for example, up to 10 people in Egypt). In many countries, the upper houses of parliaments (Brazil, the USA, etc.), presidents (Mexico, France, etc.), the lower houses of legislative assemblies or unicameral assemblies in federal subjects and autonomous entities are elected by direct elections. In the only country, Israel, since 1996, a prime minister has been elected by direct elections.

At the same time, many higher state bodies and officials, including in democratic countries, are elected by indirect elections. In theory, direct elections are more democratic, but indirect elections may be more appropriate if they provide a more professional, balanced approach to filling such high positions v officials influencing the life of the country. Therefore, the question of using one or another election system is a question of expediency, related to the specific conditions of the country, its history, and national specifics.

There are two types of indirect elections: indirect and multi-degree (they are sometimes called multi-stage). Indirect elections have two options. In the first option, elections are held by an electoral college specially created for this purpose. An example of this is the election of the US President, when voters vote for electors from one party or another, and then the electors, having gathered in their state capitals, vote for a previously announced presidential candidate from one party or another. State electoral votes are summed up in Washington, the capital of the United States. A similar procedure exists in Argentina; until the 90s it was used with certain amendments in unitary Finland. The Senate in France is elected by indirect elections, where candidates vote for: a) members of the lower house of parliament elected from a given department - an administrative-territorial unit; b) members of councils - local government bodies of the region - the largest administrative-territorial unit; c) members of the general councils of departments; d) their members specially elected for such voting by municipal councils. The upper house of parliament in India, the president in Germany, etc. are also elected by indirect elections. In the second option, elections are held not by a specially created electoral college, but by a permanent body. The most clear example of this is the election of presidents by parliaments in Greece, Turkey and other countries.

The compensatory nature of wages and other payments is considered in various economic theories, which can be grouped depending on the level, degree of generalization and nature of the relations in question in the sphere of labor and wages. R.I. Henderson identifies three levels of these relationships: macro level, micro level and micro-micro level, and five groups of theories (Table 1.2).

The five groups of theories are presented in chronological order and reflect the development over centuries of scientific theories that have influenced the theory and practice of compensation management. As the author notes, not all theories have the same impact on wages in modern democratic conditions. Considering the significance of the influence of some theories on the modern practice of compensation management, we will consider their concepts to substantiate the essence, level and structure of wages.

Social earnings theories. The group of theories of social earnings includes: the theory of earnings providing a living wage (D. Riccardo, around 1817), the theory of a fair price (Plato, Aristotle, the Old Testament), the theory of fair earnings (became widespread in the Middle Ages in Europe), wage fund theory (J. Stuart Millom, 1830s), residual claimant theory (Francis E. Walker, late 19th century), surplus value theory (K. Marx, late 19th century), which is essentially an inversion of the residual candidate theory.

Table 1.2. Economic theories that influenced the theory and practice of compensation

	Groups of theories
	Social earnings theories	The theory of earnings that provide a living wage Fair Price Theory Fair earnings theory Earnings Fund Theory Residual contender theory Marxist theory of surplus value
	Theories of controlled earnings	National Income Theory (Keynes) Neo-Keynesian distribution theory Consumption theory
	The theory of justified earnings	Investment theory Institutional earnings theory Theory of supply and demand
Mspawn theory		Marginal Productivity Theory Productive efficiency theory Negotiation theory
Micro-micro theories	Economic theories of behavior	X-efficiency model Underoptimization theory The Theory of Compensating Wage Differences Hedonic wage theory
	Organizational economic theories	Economic theory of operating costs Agency theory Contract theory

In theory surplus value K. Marx The concept of wages is based on the distinction between the concepts of “labor” and “labor power”. Analyzing the process of material production, K. Marx wrote that “labor is, first of all, a process that takes place between man and nature, a process in which man, through his own activity, mediates, regulates and controls the exchange of substances between himself and nature.” A specific feature of hired labor as an expedient human activity is that it is carried out after the conclusion of a contract of employment. Before this, labor does not exist, unlike other goods that receive a material form before they are sold.

In the process of labor activity, a person uses his labor power, the costs of which are part of the costs of production factors necessary to create goods that have use and exchange value.

The labor force always exists in society. But it becomes a commodity only under certain conditions, the main one of which is the alienation of workers from the means of production and their products there. Labor power has two properties: value and price. Exploring the essence and relationship of the categories “labor”, “labor power” and “wages”, K. Marx concludes that the cost of labor power is an objective characteristic and is determined by the cost of the means of subsistence necessary for the reproduction of the workers themselves (labor power carriers) and their members families throughout the entire period of the employee’s working age. It follows from this that wages, which act as a transformed form of the value and price of labor power, in their level should be no less than the subsistence level of the worker and his family members.

K. Marx argued that labor is the only source of economic value and, therefore, labor should have the dominant right to income. This means that the value of goods and services is determined by the amount of labor involved in their creation. The content of labor determines the cost of labor and, accordingly, the level of wages must be sufficient to reproduce the costs associated with labor. K. Marx noted that workers receive income only at the subsistence level, despite the fact that all profits are generated from their labor. The bonus, determined by the difference between labor costs and the cost of production, must be paid to employees, but it is assigned by the employer.

K. Marx developed the theory of surplus value in the initial period of development of capitalist society, when there was no pronounced market competition, so he was unable to analyze the influence of market forces on economic processes, including wages.

The development of capitalism and competition gave rise to a new generation of theories that described the operations of a market-based economy and determined its impact on wages.

Theories of controlled earnings. This group of theories includes: the theory of national income (J. Maynard Keynes, 1930s), the theory of neo-Keynesian distribution, the theory of consumption (Henry Ford, the first quarter of the twentieth century).

Keynes' theory of national income is based on the fact that full employment is a function of national income, which is equal to the sum of compensation and private and public investment. If national income falls below the level that guides total employment, the government takes responsibility for manipulating any variable to increase national income and return to full employment. Neo-Keynesian distribution theory is an extension of national income theory, which is an explanation of how to achieve full employment without conflicting with generally accepted standards of living or price stability. Ford's theory of consumption was that higher-paid workers could consume more goods and services, which would improve their lifestyle and, in turn, encourage more business.

Theories of justified earnings. The authors of these theories tried to explain (justify) the level of labor compensation for an individual employee. Investment theory, institutional earnings theory, and supply and demand theory use a macroeconomic approach; marginal productivity theory, productive efficiency theory and negotiation theory - microeconomic approach

Important for explaining the socio-economic relations between employer and employee regarding the level of wages is classical theory of supply and demand. This theory is based on the hypothesis that if there are few work assignments and the supply of labor is high, then earnings will fall. Conversely, if there is an abundance of jobs and not enough workers, then wages will rise, and in the long run the rate of wage growth will seek the point where the supply and demand curves intersect. The starting point for developing supply and demand models are five key assumptions:

1. Employers want to maximize profits, and workers want to maximize their utility.
2. Employers and workers have complete information about earnings and job opportunities in the markets.
3. Workers are identical with respect to skills and productivity, and the jobs offered by employers are identical with respect to working conditions and other non-wage characteristics.
4. The labor market consists of many individual employers on the demand side and many individual workers on the supply side, and any single employer or employee has negligible market power. Employers do not collude, and workers do not belong to trade unions.
5. All jobs on the market are open to competition and there are no institutional barriers to workers moving from one job to another.

In a labor market of perfect competition, as a result of the demand for labor and its supply, an equilibrium, market wage rate is formed for all types of work performed and professions.

Obviously, the assumptions of perfect competition are unrealistic, but such models are nonetheless important to incentive professionals because they highlight the role of market forces in the wage determination process. Just as market forces cannot be ignored by the compensation professional, they cannot be the sole determinant of an organization's wage rates and earnings structure due to imperfect real-world labor markets. Information is always imperfect. Thus, some economists recognize that competitive market forces alone do not determine a single unique level of earnings for each type of task skill or particular type of employment. One way or another, a certain range is established with an upper and lower level of wages, within which the organization has freedom of action in what it actually pays, in other words, it can form its own earnings policy.

So, if the cost of labor power is determined by the cost of the means necessary for the reproduction of labor power, then the price of labor power is formed in the labor market under the influence of the law of demand for labor and supply of labor. In practical life, the price of labor power has two forms of manifestation. In the labor market, a sale occurs with the establishment of a “wage rate,” which is the real form of existence of the price of labor. The enterprise consumes labor and pays for this consumption in accordance with the wage rate and the work performed by the employee. As a result of this consumption, the employee’s wages, his earnings, i.e., the amount of money that the employee receives for work performed, is formed. Thus, the term “wage rate” corresponds to sold labor power, and “wages (earnings)” to consumed labor power. These terms are a concrete embodiment of the concept of “labor price”. The need for the real existence of two forms of manifestation of the price of labor arises from the fact that the entrepreneur buys the employee’s ability to perform certain work, and pays for the work performed.

Another understanding of the essence of the price of labor power, and therefore the definition of “wages,” follows from investment theories or human capital theories. The latter refers to the qualitative characteristics of the workforce, a person’s ability to work, his abilities, knowledge, and skills. This capital consists of the natural abilities of an individual and can be increased in the process of education, professional training, and gaining work experience. The salary that a worker receives for his work acts as income on his human capital.

The theory of human capital reflects the reorientation of economic science from the problems of using labor to the problems of creating a qualitatively new labor force in the conditions of a post-industrial society. Human capital as a factor of production, although close to the concept of “labor power” in terms of the composition of costs, is not reducible to it in structure, size and efficiency, since it represents a higher stage of development of labor force as the ability to work, including, in addition to simple and complex ( i.e. qualified) labor force, creative component.

The theory of human capital received its harmonious design and rapid development in the 60s. XX century in the works of G.M. Gittleman, T. Schultz, G. Becker, J. Mincer, although its key ideas were set out in A. Smith’s work “Wealth of Nation” (1776) and boil down to the following. First, spending on acquiring skills to improve productivity is similar to investing in physical capital that is expected to generate income in the future. Second, spending on education, on-the-job training, health care, or migration to areas with greater employment opportunities can be viewed as investments that are usually rewarded with higher returns in the future. Third, different levels of investment in human capital can explain differences in the productivity of different employees, and therefore differences in pay levels. Fourth, there is an individual employee's personal interest in investing in human capital in cases where the net return from doing so exceeds the net return from investing in alternative assets.

G.M. Gittleman assumes that for a worker the labor market varies depending on the amount of investment made in the formation of his working capital, and compensation for labor is determined by the rate of return on investment.

So, the term “human capital” owes its origin to the obvious similarity with “ordinary” capital in the form of reproduction. In both cases, there is a long-term expenditure of funds (investment) in order to create some factors that in the future can bring a return on the invested funds. The use of “human” as well as material capital brings an effect that exceeds the cost of its creation.

However, the theory of human capital has many opponents. Thus, in the opinion of Russian scientists A. Buzgalin and A. Kolganov, the differences between human abilities for creative activity and capital are large enough that from a scientific point of view it would be justified to combine them into a general class of phenomena - “capital”. These differences are as follows.

First. The concept of “capital” presupposes the use of capital by a person in the process of activity. Human abilities, unlike capital, do not act as some kind of inert potential, requiring for its productive use the active power of a person external to it. On the contrary, a person’s abilities for creative activity, like living labor in general, serve as a necessary condition for the productive use of capital.

Second. Investing money in the development of human creative abilities differs from investing money in the creation of means of production with a long cycle of investment development. A person constantly forms and uses his creative abilities. Accordingly, the investment cycle extends over the entire period of a person’s active life. In addition, the very process of using a person’s creative abilities is at the same time a process of their improvement, which cannot be said about the material elements of capital - they only wear out in the process of application.

Third. “Human capital” cannot be acquired by simply purchasing, for example, educational services. The buyer of such services, at the same time as their seller, acts as a “producer” of human creative abilities. The same cannot be said about the purchase of capital goods.

Fourth. Return on capital, in turn, breaks down into capital (reinvested earnings) and income. The income received through the use of human creative abilities in production is “reinvested” entirely, that is, spent on human consumption.

Fifth. When investing in the formation of human capital of employees by the employer himself, the latter loses the opportunity to receive a return on these investments when the employee is fired, because human capital is inseparable from its carrier.

Taking into account these external differences, behind which the essential opposition of man as a subject of creative activity and capital is hidden, A. Buzgalin and A. Kolganov define “human capital” as a transformed form of actual changes in the quality of human activity and role in a market economy, occurring in the conditions of the genesis of post-industrial technologies

Within the framework of an expanded interpretation, human capital can be defined as a set of creative abilities, knowledge, skills, motivations and personal qualities of individuals accumulated through investments used over a certain period of time with the aim of obtaining future income (in real and in non-material forms) and contributing to the growth of national wealth.

Despite the contradictions that are revealed when analyzing the category of “human capital”, and the disputes between supporters and opponents of this theory, it should be noted that scientists of various economic schools and scientific directions are unanimous that the nature of labor in the period of post-industrial society differs significantly from previous periods, Accordingly, new demands are placed on the quality of the workforce and the person who supports it. Forming the qualities of the workforce that ensures its competitiveness in modern society requires investment in human development, and, above all, in its education.

A person’s skills, abilities and knowledge become capital on the basis that they tend to accumulate through the investment process and provide their owner with income in the form of wages and other compensation.

The quality of a company's workforce determines its competitiveness in the industry labor market. The quality of the state's total labor force ultimately determines the standard of living of its population. Therefore, the need to invest in human capital is recognized by employees and employers, including the state as the largest employer.

The human capital theory explains the differentiation in wage levels of workers by the volume of investments in human capital. “The different amounts of human capital acquired or available from birth among workers leads to the fact that they differ from each other. One implication is that at any given time the labor force consists of a number of non-competitive groups. The differences between such non-competitive groups lie in the abilities and type, quantity and quality of education of the workers. In the short term, such heterogeneity of human capital gives rise to wage differentiation associated with different worker productivity. In the long run, people can move and move from one non-competitive group to another by making investments in human capital."

So, based on the content of the theory of human capital, the following conclusions can be drawn. Wages are income compensation that the employee, as the owner of the labor force, receives depending on the volume of investments made in the formation of its quality. The amount of compensation is determined by several components. The first component is the average level of consumption of material goods that has developed in a society based on the degree of development of its productive forces. The second component is the compliance of the workforce with the requirements of the market segment in which the organization operates; the third component represents payments related to the efficient use of human capital; this is the so-called variable salary, which acts as a percentage of human capital.

According to the theory of marginal productivity ( J. Heinrich von Turen, circa 1876, Germany; F. Henry Wickstand, England; J. Bates Clark, America ) the wages paid to the wage earner must be equal to the excess value of his productivity which he adds to the total output.

T productive efficiency theory is a side branch of marginal productivity theory. Its essence lies in the fact that each worker is given a favorable opportunity to increase his earnings by increasing his own productive efficiency. This theory provides the basis for a number of monetary incentives, such as bonus systems, allowances, and profit-sharing plans. Many economists are of the opinion that, because of its practical application, the productivity theory is the most constructive of the recent theories of earnings.

Negotiation theory ( J. Davidson, 1890s . ). The theory sets out the principle that wages and other benefits are driven by trade negotiations between employer and employee and their amount depends on the results of these negotiations. The work performed by any employee represents an exchange of economic value, which is the balance of the original obligations of the negotiating employer. Bargaining theory is based on the assumption that there is no single fixed rate of pay for any particular type of work. Rather, there is a range of possible earnings rates. The upper limit of this range is determined by the highest level of wages that the employer is able or willing to pay, and the lower limit is the lowest wage for which the employee is willing to work.

Negotiation theory, described by John Davidson in the late 1890s, remains to this day a practical and valid explanation for the level of compensation for a given employee.

Subsequent stages in the development of economic theories are associated with the development of micro-micro theories, which are divided into economic theories of behavior and organizational economic theories. The first interpret the structure of earnings in a given industry or even one company. The latter assume that management practices can have a decisive impact on the productivity of the organization and that understanding of internal management and the management of compensation practices is necessary. Let's consider the content of some of these theories, which are most relevant currently in the practice of compensation management

Compensatory wage differential theory and hedonic wage theory. These theories are based on the assumption that the worker seeks to maximize his utility when choosing a workplace. The choice will take into account not only monetary, but also non-monetary aspects of the workplace, positive and negative, in relation to which the employee has preferences. This means that at the same level of wages for the same payment, the employee will prefer to work for the employer where the conditions and other labor characteristics, from the employee’s point of view, will be better. An employer whose labor characteristics turn out to be worse is forced to compensate for them by introducing additional payments to wages. A worker, in accordance with his preferences, can choose different jobs offered to him by firms, while maximizing his utility.

Differences in wages that compensate for “non-wage” differences in job characteristics in the above theories are called compensatory. Compensation differentials provide proactive compensation related to poor working conditions or risk of injury.

Agency theory. The current stage of business development is characterized by the fact that the volumes, pace of business development and competition in the market require the separation of ownership and property management rights. The growth in the size of an organization entails the need to increase the costs of monitoring the actions of personnel as it grows. The need to control the actions of personnel arises as a result of the incompatibility of interests and goals that the owner (principal) and the employee (agent) have. The main strategic interest and goal of the owner is to develop his business and strengthen his position in the market. Employees may have different interests and goals depending on the role and function they perform in the organization: from goals of career growth, maximizing their income in any way, to failure to fulfill duties due to unfair treatment of labor for a number of reasons. The principal's dilemma is a choice between the need to control agents and the unwillingness to bear the costs associated with exercising control.

As the organization grows, there is also a process of complication and specialization of the information circulating in it. The decision-making process within an organization includes many stages, at each of which qualitatively new information arises. This information is available only to those members of the organization who are directly involved in its receipt and processing. Participants who have unique information are not interested in its dissemination in general and in its undistorted transfer to the owner in particular. Asymmetric information creates the preconditions for opportunistic behavior of workers, that is, their desire to maximize their utility, despite the obligations accepted when signing the employment contract, to be satisfied with a certain fixed level of utility. Having received, through an employment contract, guarantees of a fixed remuneration in the event of “natural” unforeseen circumstances, the employee himself seeks to create “artificial” unforeseen circumstances that would allow him, through manipulation of the principal, to redistribute the results of activity in his favor. For example, the top management of a company, hiding all information from the owner, in the interests of personal immediate enrichment, can make decisions that are contrary to the strategic goals of the owner, and sometimes even detrimental to the business.

From the above it follows that in order to resolve the contradictions that exist in the interests and goals of the principal and the agent, it is necessary to create a compensation system to motivate and reward the desired behavior of personnel. This system consists of payments for measurable results that are fully consistent with the interests of the owners. Such incentive systems track results expressed in terms of quantifiable indicators of company performance, such as earnings per share, incremental business value, etc. The bottom line is that if incentive schemes for senior management are designed properly, these managers will in their own interests will carefully monitor the effectiveness of the entire organization.

A common way to motivate the management of an organization to achieve the strategic goals of the owner is to include in the compensation packages of companies payments formed on the basis of employee participation in profits and ownership. Such incentives include bonuses from the profit based on the results of the organization’s work for the reporting period, representing a certain share of this profit, contributions by the employer from profits to non-state pension funds to the accounts of employees, and options.

The specificity of an option as a form of remuneration lies, first of all, in the fact that it is not based on the results achieved. The amount of the incentive (per each share in the option) is determined by future results, namely the dynamics of the company's stock prices. In the “classical” scheme of an option program, in order to maximize income from the implementation of an option, the manager must optimize not some private, momentary aspects of the company’s activities, but also implement effective strategic management of the company’s behavior in the long term in the interests of the owner.

Contract theory. The employment relationship between employer and employee is most often presented in the form of a contract. Workers are hired to perform specific tasks and achieve goals set by the employer in exchange for wages and other compensation. Most employment contracts are incomplete and implicit. Their incompleteness lies in the fact that, as a rule, they do not stipulate in advance all the specific duties that may be required of the employee. Otherwise, the employer’s flexibility in responding to changing conditions is reduced. Moreover, any new situation will necessitate a contract revision, which imposes costs on both the employer and the employee.

Employment contracts are also often implicit in the sense that they are usually a set of informal agreements that, due to their vagueness and uncertainty, have no legal effect. Employees can almost always resign of their own free will, and employers, in turn, have ample opportunities to fire employees.

The opportunities for dishonest behavior increase significantly if the information is “asymmetrical”, i.e. when one party knows more than the other about the intentions and possibilities associated with the contract. For example, those wishing to apply for a job know incomparably more about their attitude to work than the employers interviewing them, and employers, in turn, know much more about the actual duties that must be performed in the proposed jobs.

Very often, in the course of fulfilling their duties under an employment contract, employees have motives not to fulfill their promises. This is not because employees deliberately choose to be dishonest, but because they typically try to accelerate goal achievement by adjusting their behavior to meet opportunities. Thus, the challenge arises of using a reward policy that automatically forces both parties to stick to their promises.

A self-enforcing contract is based on the deceiver incurring losses without providing evidence to a third party of a violation of contractual obligations. In the labor market, the most common “punishment” for deception is termination of the employment relationship by the victim of deception. Therefore, self-sufficiency implies that both the employer and the employee benefit more from the fair continuation of the existing employment relationship than from the termination of it. If employees receive or expect to receive more benefits from an existing relationship than from those that may arise elsewhere, they automatically lose out by shirking their responsibilities, which leads to job loss. If it is more profitable for employers to use the labor of existing workers than to hire new ones, they will clearly lose by not fulfilling promises to promote outstanding workers, who thereby have an incentive to leave these jobs.

In order to prevent the organization's trained workers from leaving (thus destroying the employer's investment in human capital), it becomes necessary to pay these workers higher wages than what they can earn in other organizations. To justify its investment decisions, the employer must assume a return on its investment costs, i.e. wages paid to workers who have received special vocational training must be less than the marginal money product.

The gap between the marginal money product created by workers in a given enterprise and the wages they can earn elsewhere represents a surplus that is divided in some way between employers and workers. This division is necessary for the self-sufficiency of the implicit contract. Indeed, if one of the parties receives the entire surplus, then the other party will not lose anything from the severance of the existing labor relationship. Thus, to make their contracts self-sufficient, the employer and employee must share the surplus.

It is believed that high wages attract the best workers because they expand the choice of candidates, allowing the employer to more carefully select the necessary workers. Higher wages allow the employer to choose more experienced, reliable and highly motivated workers, as if skimming the cream off the existing pool of candidates. The higher the wage relative to what can be earned elsewhere, the less likely workers are to voluntarily leave. Recognizing this, employers are becoming more willing to provide vocational training to their employees.

Russian economists made a certain contribution to the development of the theory and practice of compensation. In the system of economic relations of socialism, the commodity nature of the labor force was rejected, and wages were considered as a form of distribution according to labor, as the worker’s share in the consumption fund of society, determined by the quantity and quality of the labor expended by him.

In the economic literature of the socialist period, one can find many definitions in which wages are defined as a share in the income of a society or enterprise, the total social product, national income, the cost of a product created by a society or enterprise, etc. For example, “Wages represent the worker’s share in the total product of society, which he receives in the order of distribution according to work.” According to these definitions, the relationship between the amount of a worker’s labor contribution to the final joint result and that part of the society’s fund of subsistence that goes to the worker’s personal consumption is determined by the law of distribution according to labor. This relationship is characterized by the equivalence of the labor contributed by the employee and the labor embodied in the share of the fund of subsistence of society received by the employee.

The recognition by economists, the country's leadership and most of civil society of the inefficiency of socialist management methods and the transition to market methods, the emergence of private ownership of the means of production became the basis for considering socio-economic relations and phenomena in the sphere of labor from the position of labor as a commodity. The works of many Russian scientists are devoted to revealing the essence of wages given the commodity nature of the labor force. Research by Russian scientists was largely aimed at specifying the essence of wages, as well as at developing mechanisms for the formation and distribution of the wage fund for enterprise teams, determining the wages of specific workers that are adequate to their contribution to the creation of the value of the product.

Most scientific research boiled down to evidence: whether wages are the cost (price) of labor or labor power. At the same time, some authors defined wages as the cost of labor or the price of labor; others as the cost or price of labor. So, for example, S.D. Anikeev, L.P. Vladimirova, A.P. Egorshin, Yu.P. Kokin, V.D. Rakoti, R.A. Yakovlev define wages as the price (cost) of labor power: wages act as the price of labor power corresponding to the cost of consumer goods and services that ensure the reproduction of labor power, satisfying the physical and spiritual needs of the worker and his family members; wages represent the price of labor in the labor market, taking into account the emerging relationship between demand and supply of labor. The monetary expression of wages is the price of consumer goods (food and non-food products), services, taxes and other payments that ensure the reproduction of the labor force, the satisfaction of the physical and spiritual needs of both the worker himself and his family members.

Other authors, G. Gendler, A.L. Zhukov, Yu.M. Osipov et al., connect the essence of wages with the price of labor. So, A.L. Zhukov writes: “In the most general form, wages in a market economy are the amount of funds paid for the use of labor, the determination of which is based on the price of labor,” and further: “In accordance with the basic law of a market economy, wages as the price of labor are formed under the influence , first of all, supply and demand in the labor market."

ON THE. Volgin, exploring the essence of the category of wages, believes that it can act as both the price of labor and the price of labor power, depending on the specific situation. On this occasion, he writes: “Apparently, choosing one of two definitions of wages - the price of labor or the price of labor power - is impossible and incorrect for an abstract, non-specific situation. The choice will be determined by a wide variety of factors and conditions... Only they together can finally determine the essence of wages - this is the price of labor or the price of labor power, and therefore its actual size.

If we compare the essential content of wages with the commodity nature of the labor force - “wages are the price (cost) of labor power” - and in the absence of a labor market - “wages are part of the fund of subsistence (consumption fund) going into personal consumption worker,” then it is easy to notice that in both cases we are talking about a certain volume of means of subsistence, ensuring, at the current level of development of the productive forces, the corresponding historically established level of consumption of material and spiritual goods (consumer goods and services) and coming to the disposal of employee as payment for work performed of a certain quality and quantity. In Marxist literature, this volume of means of subsistence was usually called the necessary product, in contrast to the other part of the product created by the worker, called surplus. In other words, if the level of development of society predetermines a certain amount of the necessary product, then it comes to the disposal of the worker in the form of wages, regardless of whether capitalism or socialism exists in this society. The essential difference between wages as a necessary product in market and non-market economies lies in the methods of its distribution. The necessary product that comes to the disposal of the worker under capitalism, before becoming such, goes through the stage of purchase and sale of labor power, that is, it is formed under the influence of supply and demand for labor in the labor market; under socialism, it is determined directly in the process of distributing the produced social product as the target function of planned, organized direct production, in which there is no labor market.

Summarizing the consideration of wage theories, the following conclusion should be drawn. The theories of wages, both foreign and Russian authors, which developed in parallel with the development of economic systems and socio-economic relations adequate to them over several centuries, explore the compensatory nature of wages, complementing each other and thereby enriching the understanding of the essence of compensation payments. Many of these theories, which we have examined in more detail, act as a methodological basis for the formation of modern compensation systems for organizations operating in a market economy.

In our opinion, of all the theories discussed above, five have the greatest impact on the modern practice of compensation management: 1) the Marxist theory of wages; 2) theory of supply and demand; 3) human capital theory; 4) implicit contract theory; 5) agency theory. Let us highlight the main provisions and recommendations arising from them that must be taken into account when developing compensation policies for organizations (Table 1.3).

In conclusion, we once again emphasize the idea that prompted us to consider wage theories from the perspective of their significance for compensation policy, the development of individual compensation and compensation systems.

Theory, its main provisions that are important for the development of compensation systems and compensation policies
Marxist theory of wages. In its economic essence, wages are the cost of labor power, which in turn is determined by the content of labor and the cost of subsistence.		1. The level of the minimum wage must not be lower than the subsistence level. 2. The tariff rate at the subsistence level is established for the performance of work that does not require special professional training. 3. When developing the structure of the basic salary of an organization, it is necessary to take into account the content of labor within specific jobs/positions (complexity of the work and the required level of qualifications, functions performed and their significance for achieving business goals)
The theory of supply and demand. The price of labor power is formed in the labor market under the influence of the law of labor demand and labor supply.	1. When setting wages, including base wages for performing specific jobs/positions, the employer must take into account the market level of these compensations. 2. Setting a level below the market level will not allow the formation of highly professional personnel motivated by results, which will negatively affect the competitiveness of the organization as a whole.
Human capital theory. The development of human capital requires investment from both the employee and the employer. The volume of investments in human capital determines differentiation in the levels of wages of workers.	1. The competitive advantages of the organization are ensured by the quality of human resources. This leads to the creation of compensation systems aimed at maintaining and developing human capital in accordance with the goals and objectives of the business. 2. Mechanisms for developing compensation systems should ensure differentiation of the volumes and types of compensation to employees depending on the quality of their human capital and labor results
Implicit contract theory. Reveals the role and significance of various compensation policies in shaping the motivation of personnel to achieve the organization's strategy and perform current tasks.	1. In order to discourage the departure of specially trained employees of the organization (thereby destroying the investment in human capital made by the employer), it is necessary to pay these employees higher wages than what they can receive in other organizations. 2. When developing a compensation policy, employers must balance the costs associated with its implementation with the benefits received.
Agency theory. Aligning the interests of management and shareholders can be achieved by using certain forms and systems of compensation.	Compensation systems that can bring the interests of the principal and agent closer together include: 1) profit sharing systems (bonuses, additional pension savings, etc.); 2) ownership participation systems (option contracts)

The macrotheories presented by us in the Marxist theory of wages, the theory of supply and demand, and the theory of human capital, reveal the economic nature of compensation and determine the requirements for the development of compensation systems, the purpose of which is the formation of results-motivated personnel of the organization. Implicit contract and agency theories, a group of economic organizational theories, expand understanding of the variability of organizational strategies, structures, and the vast variety of practical implementations of compensation systems that are found in the real world. According to R. Henderson: “They carry the potential to provide the practical field of compensation management with a theoretical foundation” Henderson, R. Compensation Management. - 8th ed. / lane from English; edited by ON THE. Gorelova / R. Henderson. - St. Petersburg: Peter, 2004. - 880 pp., p. 129.

Ehrenberg R. J. Modern labor economics. Theory and public policy / R. J. Ehrenberg, R.S. Smith. - M.: Moscow State University Publishing House. - 1996. - 800 pp., ch. 8.

Rabkina, N.E. Fundamentals of differentiation of wages and income of the population / N.E. Rabkina, N.M. Rimashevskaya. - M.: Economics, 1972. P. 14; Sergeev I.V. Economics of enterprise: textbook. allowance / I.V. Sergeev. - M.: Finance and Statistics, 1988. P. 230; Labor and wages in the USSR / Dictionary-reference book. - M.: Economics - 1989. - P. 447; Borisov A.B. Big economic dictionary / A.B. Borisov. - M.: Book World. - 2000. - P. 229; Big Economic Dictionary / ed. A.I. Azriliyana. - 2nd ed. add. and processed - M.: Institute of New Economics, 1997. - P. 864; Sholomitskaya L.A. Salaries: modern development trends / ed. A.E., Razumova / L.A. Sholomitskaya. - Mn.: Science and technology, 1989. - P. 11; Sukharevsky, V.M. Stimulation of production and economics of socialism (issues of theory and practice) / V.M. Sukharevsky. - M.: Economics, 1968. - P. 94.

Rabkina, N.E. Fundamentals of differentiation of wages and income of the population / N.E. Rabkina, N.M. Rimashevskaya. - M.: Economics. - 1972. - P. 14.

Volgin, N.A. Is wages the price of labor or labor power? / ON THE. Volgin // Man and labor. - 1999. - No. 9. - P. 66-69; Zhukov, A. Ways to improve salary management / A. Zhukov // Questions of theory and practice of management. - 1997. - No. 3; Kokin Yu. The theory of wages and modern realities of wages in Russia / Yu. Kokin // Man and labor. - 1995. - No. 7. - P. 83-87; Osipov, S.L. Wages as the price of labor and its regulation at industrial enterprises in a transition economy: abstract of thesis. diss. Doctor of Economics Sci. - Khabarovsk: KhSU, 1997. - 52 p.; Posadkov, E.L. Wages on the Russian labor market: problems, concepts, practice / E.L. Landings. - Novosibirsk, 2001, - 80 p.; Yakovlev, R. Formation and procedure for determining the price of labor / R. Yakovlev, M. Fedorova // Man and labor. - 1996. - No. 1. - P. 83-86, Yakovlev, R.A.. Remuneration in the organization / R.A. Yakovlev. - M.: MCFR, 2005, - 528 p.

Henderson R. Compensation management [Text] / trans. from English; edited by ON THE. Gorelova / R. Henderson - St. Petersburg: Peter, 2004. - P. 133.

Congressmen and other government officials who are not economic experts often argue that any environment must be made safe, regardless of the costs. “The safety of human life is not a question for economists at all,” they argue. But their claims that costs should not play a role in security issues do not stand up to even the most basic criticism. It is enough to analyze some of the conclusions that follow from the statement made.

Let's consider safety in relation to the field of automobile operation. At any time, there is some possibility of brake failure when driving any vehicle. The consequences of this event are dire. The likelihood of dying in a car accident is greatly reduced if your brakes are inspected thoroughly every day by an experienced mechanic. However, probably no motorist checks his car's brakes that often, since the costs are quite high compared to the possible benefits. Most people have their cars checked 1-2 times a year, and there is no good reason to believe that this routine needs to be changed.

Security is a benefit that many people value. To ensure it, it is necessary to spend real resources. Just as with any other problem involving the use of resources, the optimal level of security is determined by comparing the associated costs and benefits.

Security costs and benefits are likely to be assessed differently by different people. People who are afraid of being struck by lightning, for example, will experience greater peace of mind from installing a lightning rod than those who are not afraid of thunderstorms. The optimal set of security features will be higher for the former than for the latter.

Approximately the same questions arise when making decisions related to safety in the workplace. Many manufacturing activities involve health and safety risks. This risk can usually be reduced through the use of safety measures and measures. All of them are associated with additional costs and, in many cases, still do not completely eliminate risk. Should these activities be carried out, and if so, how much does this depend on the ratio of their value to costs?

To make our discussion more concrete, consider a situation in a coal mine where the issue of installing filters to prevent coal dust from entering the lungs along with the air is being considered. The cost of installing and operating these filters is $50 per week per miner. If there are filters, the life expectancy of miners will be the same as that of office workers; if there are no filters, it will be 10 years less. The question of whether filters should be installed becomes a narrower question: “Is the increase in miner life expectancy worth more than $50 a week?” If the answer is yes, filters must be installed, otherwise these devices will not be installed. Let's say the miners valued an additional 10 years of their lives at only $40 a week. At the same time, the mine manager who installed the filters must cut the workers' wages by $50 per week to cover his additional costs (assuming that coal buyers do not intend to pay the additional costs of this mine). It is assumed, however, that miners would rather have $50 a week than the protection provided by filters.

Of course, many miners will choose to install filters, but not all. Suppose, for example, that 30% of miners value filters at $60 per week, and the remaining 70% at $40. These 30% of miners will support the proposal to install filters, while the remaining 70% would prefer to do without them. Mines that install filters will pay wages $50 less per week than others. Miners who value filters at $60 per week would prefer to work in mines equipped with filters, while other miners would prefer to work in mines without filters.

Typically there will be multiple choices. Line B in the figure means the continuity of the technically feasible combination of “wages and security.” The horizontal axis reflects the level of safety as the annual probability of survival in the workplace. (A job where this probability is equal to 1 is considered completely safe.) The vertical axis shows the hourly wage rate. Line B has a negative slope because resources must be spent to improve security. The shape of line B is convex because we install the cheapest and most effective safety devices first and only then use the more expensive ones. Line B, which tends to 1, never reaches it; this shows that no matter how much money we spend on safety, we cannot guarantee that there will be no accidents.

Rice. Combination of wages and security
People who are risk averse (with low marginal rates of substitution of wages for the probability of survival) will choose riskier jobs with higher wages (point A). Risk-averse people will choose safer jobs with lower wages (point C).

The choice of the optimal combination by each worker depends on his comparable assessment of risk and material well-being. Risk averse people will have relatively steep indifference curves, reflecting their acceptance of lower wages in exchange for increased security (their choice represented by point C).

In contrast, risk-averse people will have a flatter indifference curve, reflecting their less willingness to give up wage income in exchange for additional security. The optimal choice of such a person is represented by point A.

The theory of compensating wage differentials predicts that, all other things being equal, jobs that pay more are more dangerous. Cornell labor economist Robert Smith critically reviewed eight different empirical studies that examined the relationship between wage rates and job riskiness. These studies, each based on its own different set of data, found a positive relationship between wages and the likelihood of being killed on the job.

Compensating wage differentials ranged from $20 to $300 per year for every 0.0001 increase in the annual probability of a workplace fatality. In the future, it is proposed to take the probability of the annual death of steelworkers at work as 0.0001, and the death of lumberjacks as 0.001. Suppose workers value a 0.0001 reduction in the probability of death per $100 per year. Then the compensating difference in safety wages should be $900 per year higher for loggers than for steelworkers (since the annual probability of being killed is 0.0009 higher for loggers). Of course, the overall wage difference between any two occupations depends on many factors beyond the risk of death or injury, so the wage difference between steelworkers and loggers could be either more or less than $900 per year. The theory suggests that if logging could somehow become as safe as working in a steel mill, logger wages would have to drop by $900 a year.

I once attended a conference where an economist was discussing the concept of compensating wage differentials related to safety. The sociologist in the audience reacted angrily to his every word. He solemnly declared that "the theory is completely wrong, since everyone knows that most of the dangerous and low-prestige jobs are always performed by the lowest paid workers." It is true that the most dangerous jobs are usually performed by low-income workers, but this does not indicate that the theory is invalid. The theory's assertion that wages will be higher in less secure job fields is subject to a "ceteris paribus" caveat. When considering a large sample of American workers, many factors, such as levels of education, intelligence, experience, and entrepreneurship, vary considerably, and so does the ability to earn an income from selling one's labor in the marketplace. From the plausible assumption that safety is an ordinary good, it follows that workers with high opportunities will choose jobs with high wage rates and levels of safety, and workers with the least productivity will choose jobs with lower levels of safety and wages. But at the same time, their wages turn out to be higher than what they would have received if they had chosen a safer job (due to their low productivity, the wages in this job could not be high).

The above reasoning can be easily represented on a graph for choosing the optimal relationship between wages and security. The line in the following figure characterizes the set of technically feasible combinations between wages and safety for a highly skilled worker.

Rice. The influence of qualifications on the optimal choice of security level
The budget constraint for highly skilled workers (B1) represents a more favorable set of options than for less skilled workers (B2). If safety is a common good, then most skilled workers will choose jobs that pay higher wages and are safer (A) than jobs chosen by less skilled workers (C). But for any given skill level, there is also a trade-off between wages and security.

Line B2 means the appropriate set for a low-skilled worker. In the analysis, B1 and B2 act as budget constraints and, for a highly qualified worker, are located further from the origin. If two workers have the same indifference curves and safety is a common good, then the optimal job for a highly skilled worker (A) is a job with a higher wage and a higher probability of survival than for a less skilled worker (C).

Many economists have argued that the existence of compensatory wage differentials associated with the presence or absence of safety makes safety regulation unnecessary in competitive labor markets. To illustrate this argument, consider again the example of logging and steelmaking. Let's imagine that there are measures (purchase of safer equipment, introduction of more stringent safety regulations, etc.) that ensure a reduction in the annual probability of death during logging to 0.0001, i.e., to the level that currently exists in steel mills. Let's say that workers valued a $100 per year reduction for every 0.0001 chance of death. This means that workers must agree to a wage reduction of $900 per year to enable all additional safety measures to be implemented. Profit-maximizing logging companies have an incentive to undertake these activities if the cost is less than $900 per year per worker. If costs turn out to be above $900, then neither the company nor the workers will be able to change the situation. It is clear that actions must be taken to make the logging process safer, but at a cost that the loggers themselves consider appropriate and not too high.

The Occupational Safety and Health Act (OSHA), passed by Congress in 1970, sets strict safety standards in the workplace. Its stated purpose is to “guarantee a high degree of protection for the health and safety of the worker.” Economists have often criticized OSHA, arguing that the safety under which many people are forced to work exceeds the safety they would prefer if they paid for it. For example, a worker would choose to work at point A, but OSHA requires that the minimum job safety be equal to GS. As a consequence, the worker is forced to give up work at point A and perform work at point C. But work at point C, although safer, contributes to the establishment of a lower indifference curve for this worker. At point C, the amount of money he agrees to forfeit to increase security is less than the costs required for this increase. In assessing the alternative from the worker's point of view, we must recognize that safety requirements put him in a difficult position.

Rice. Security requirements that reduce usefulness
A worker making his own decisions chooses a job at point A on the graph. However, minimum safety requirements (rc) force him to choose a job at point C, which contributes to the establishment of a lower indifference curve for him than the job at point A.

Occupational safety regulation advocates sometimes argue that economists' criticism of OSHA would be justified only if there were a fully informed, highly competitive labor market. However, this condition is rarely, if at all, satisfied in practice. With regard to health protection in general and the effects of toxic substances in particular, workers are often completely uninformed and therefore unable to make informed choices between different compensation programs. For this reason, workers authorize government officials to act as expert consultants on their behalf to protect them from risks that they find too difficult to assess to understand their consequences.

This argument from proponents of regulating labor safety issues seems sufficient to justify intervention in these processes in many cases. But it is not sufficient to explain many other examples. Let us again consider the problem of choosing between mines with polluted and clean air. Virtually every miner is aware that a likely consequence of working in a contaminated mine is pneumoconiosis (dusty lungs) - an occupational disease of miners that severely depletes the body and often leads to death. Since each miner is likely to know several people in his immediate circle who suffer from this "black lung" disease, it seems unlikely that he would oppose the requirement to install filters.

But if economists' criticism of OSHA is valid, it must be recognized that workers will resist the requirements and rules that the law establishes. At the same time, workers are often supported by enterprise owners who are not interested in complying with safety regulations. The question arises: Why don't profit-maximizing mine owners simply install filters in their mines and attract those miners who are interested in it (and who agree to reduce wages by an amount sufficient to pay for the filters)?

The answer to this and other specific questions regarding labor contracts is that, in reality, labor markets are often not competitive. Those who hold this belief argue that workers lack the freedom of movement and migration necessary to have a wide choice of work options that suit them, and are therefore vulnerable to exploitation by their employers.

To properly analyze this argument, we must step back a little and examine the forces affecting wages and employment in a labor market where there is only one firm as the employer of labor.

Hedonic wage theory suggests that a worker seeks to increase his utility through his choice of workplace. This utility depends both on the amount of wages and on various other job characteristics (positive and negative) for which the worker has preferences.

Differences in wages that compensate for “non-wage” differences in job characteristics are called compensatory differences.

The compensatory wage differential model is based on the following premises:

when choosing a job, the worker maximizes his utility from employment in this job, taking into account all its characteristics, and not just income (in this, the model of compensation differences is based on the hedonic theory of wages);

the employee has or can obtain in the process of work information about all the characteristics of the workplace, and the costs of obtaining information are low;

workers are mobile and can freely move from one workplace to another.

The worker's preferences are described by the utility function U = u (W, Xi), Where W- wage; Xi- “non-salary” characteristics of the workplace.

Let's consider the case of negative characteristics using the example of the risk of injuries and occupational diseases R.

Then the worker's utility function U = u (W, R) And u’ (W)> 0, u’(R)<0.

The employee's preferences are described by a family of indifference curves (Fig. 5.3a). The concavity of the curves reflects the decreasing marginal rate of substitution of the degree of risk with wages.

Since reducing the degree of risk requires the employer to increase

Rice. 5.3. Indifference curves of the employee and iso-profit of the employer, reflecting their preferences for wages and injury risk

costs, then the employer's preferences can be described by a family of isoprofit curves, their convexity reflecting diminishing marginal revenue as the degree of risk decreases. Competition in the market will lead the firm to zero economic profit and to the isoprofit curve corresponding to zero profit (Fig. 5.3b).

A worker, in accordance with his preferences, can choose different jobs offered to him by firms, thereby maximizing his utility function. So, in Fig. 5.4 employees are equally satisfied with the workplace at the company A, and a workplace at company B. Moreover, in the first case, the combination of wages and risk level W 1 , R 1, in the second case - W 2 , R 2. Increase in risk level by ( R 2 - R 1) is accompanied by an increase in wages by the amount ( W 2 - W 1), which in this case will constitute a compensating difference.

Rice. 5.4. Compensating differences in wages for different

degree of risk

In the market as a whole, the intersection of all possible combinations of jobs offered forms the market supply-wage-risk curve, which will have a positive slope and be flatter than the isoprofit curves of individual firms. Points

The theory of compensation has gone through a long path of development in close connection with the history of the development of special education. For a long time, the main principle of mental development was considered to be the self-development of initially inherent abilities, therefore, in the processes of compensation, external influence was considered only as an impetus for their spontaneous development. Often the role of such a push was assigned to the word, which was attributed to a mystical effect on the human psyche.

A special place in the interpretation of the problem of compensation is occupied by the theory of overcompensation of the Austrian psychologist and psychiatrist Adler, who put forward a number of new ideas. Among them are the principle of internal unity of the psychological life of the individual and emphasizing the role of social rather than biological factors in human mental development. From Adler’s point of view, man is the most biologically unadapted creature, so he initially has a feeling of low value. The feeling of low value is especially acute in childhood, which is the main driver of the child’s mental development, and the discrepancy between what one would like creates a complex dynamic tension. Even more dramatic are the feelings of inadequacy experienced by children with severe physical or mental disabilities. In this case, an “inferiority complex” arises, the presence of which, depending on a number of circumstances, can block development, creating the ground for neurosis, and turn on mechanisms of overcompensation.

The self-perception of inferiority, defectiveness, according to Adler, is a constant incentive for a person to develop his psyche, i.e. defect, inability, low value - not only a minus, but also a plus source of strength, an incentive to overcompensate. In an effort to overcome feelings of inferiority and assert oneself among others, a person actualizes his creative potential.

In his works, Adler gives many examples of overcompensation, pointing out that the mechanism of its implementation is associated with a natural human feeling of low value, on the one hand, and a pronounced motive for superiority, on the other. The desire for superiority is understood by Adler positively, as a tendency towards development, towards self-improvement.

Adler himself repeatedly emphasized that cases of overcompensation are not so numerous. And, even being isolated, they are valuable for science, because with extraordinary brightness they demonstrate the hidden possibilities of human nature, the ability of the individual to resist the most unfavorable conditions of his existence, to develop in spite of them.

It should be especially emphasized that in Russian psychology the fate of Adler’s ideas was not easy. Individual psychology was received with enthusiasm. The peak of Adler's unprecedented popularity occurred in the second half of the 20s of the 15th century. A particularly strong influence of his ideas was observed in special psychology and correctional pedagogy. But the drama of the situation was that the position of overcompensation was completely misunderstood. Adlerian psychology was considered proof of the optimistic fact that almost any physical or mental disorder automatically leads to an effect beyond development.

In connection with the spread of a perverted interpretation of the ideas of individual psychology, Vygotsky published the article “Defect and Overcompensation” in 1927. This work is not critical, but purely analytical. Vygotsky consistently and very patiently, judging by the numerous repetitions, reproduces and interprets the main provisions of overcompensation, warning the reader against a simplified understanding. It can hardly be seriously argued that pathology is capable of stimulating development. If a person in cramped conditions achieves something, it is not thanks to the disease, but only in spite of it, due to colossal volitional efforts and abilities. The idea of ​​overcompensation is valuable because it positively “appraises not suffering in itself, but its overcoming; not humility in front of a defect, but rebellion against it; not weakness in itself, but the impulses and sources of strength contained in it.”

Adler's individual psychology significantly enriched the practice of teaching and raising children with physical and mental disabilities. In particular, on its basis, methods of emotional education and a system of psychological assistance to parents were developed.

The theory of compensation of mental functions by L.S. Vygotsky. From his works, L.S. Vygotsky critically analyzed existing views on the problem of compensation for mental functions and substantiated the understanding of compensation for mental functions and substantiated the understanding of compensation as a synthesis of biological and social factors. According to Vygotsky, Adler derives the basic psychological law of the transformation of organic inferiority - through a subjective feeling of low value, which is an assessment of one’s social position - in the desire for compensation and overcompensation.

L.S. Vygotsky formulates the so-called law of transformation of a defect into a plus of compensation, according to which the positive originality of a child with deviated development is created primarily not by the fact that he loses certain functions, but by the fact that their loss gives rise to new formations , representing in their unity the individual’s reaction to a defect.

In the process of compensation and correctional training, “workarounds” for the process of mental development are formed. While achieving the same development as a normal child, a deaf or blind child achieves this in a different way, using different ways and means. As Sorokin notes, the normal path of development is considered not because the result is always achieved in a certain way, and not on the basis that this method is the most economical way to achieve the desired result. Deviating development is development that, due to unfavorable conditions, is forced to take a detour, largely losing the characteristics of optimality. Achieving this or that result comes at a high psychophysiological “price”; The effort that a child with developmental disabilities expends is significantly higher than normal.

An example is the ability to spatial orientation in persons with profound visual impairments. Children deprived of vision from an early age intensively develop some abilities that reach minimal development in normal conditions. For example, the “sixth sense” as the ability to perceive the presence of approaching objects arises as a result of the developing ability to integrate stimuli perceived by preserved analyzers. If for sighted people orientation in space is relatively simple and occurs automatically, then for the blind it is a complex act that requires serious effort. In this case, achieving the same result is associated with different amounts of effort, expenditure of nervous and mental energy and, therefore, have different “prices.” The consequence of this is an increase in load, a decrease in the central nervous system. It is no coincidence that many authors note a higher frequency of manifestations in persons with deviations in the development of neurotic symptoms, a tendency to maladaptation and a decrease in frustration tolerance.

When considering Vygotsky’s theory of compensation of mental functions, several important points can be highlighted.

Firstly, Vygotsky attached great importance to the inclusion of abnormal children in a variety of socially significant activities, the creation of active and effective forms of children's experience. As Vygotsky said, when any sense organ is lost, other organs begin to perform functions that they do not usually perform. Vision in a deaf person and touch in a blind person do not play the same role as in a person with preserved sense organs, since they must perceive and process a huge amount of information, which in normal people passes through a different route. The essence of working with children who have any impairments, for example in the sensory sphere, should lie not in the development of their remaining organs of perception, but in more active and effective forms of childhood experience.

Secondly, this is a provision about the connection between the general tasks of education and special methods, the subordination of special education to social education, and their interdependence. The need for special education was not denied - teaching children with any disabilities requires special pedagogical equipment, special techniques and methods. For example, in case of hearing impairment, the issue of teaching oral speech to deaf-mute children becomes not only a special issue of methods for teaching its articulation, but also a central issue in deaf pedagogy. It is necessary to organize the life of a child with impaired hearing as early as possible so that speech is necessary and interesting for him. “We must create the need for universal human speech, and then speech will appear.”

Thirdly, Vygotsky saw the main way to compensate people with various disabilities in their inclusion in active work, which provides the opportunity to form higher forms of cooperation. Vygotsky highly valued the physical possibilities of compensation, for example, in people with sensory impairments, while he believed that many types of work activities were available to such people, with the exception of some areas directly related to the primary impairment. With the right approach to business, it is through inclusion in work activity that the door to life opens and conditions are created for full integration into society.

Fourthly, Vygotsky’s position that “blindness, deafness and frequent defects in themselves do not make their bearer defective” has a deep national and practical meaning. In his opinion, it is not the defect itself that decides the fate of the individual, but its socio-psychological implementation. Vygotsky believed that an individual’s compensatory capabilities are fully revealed only if the defect becomes conscious. In this case, the level of compensation is determined, on the one hand, by the nature and degree of the defect, the reserve forces of the body, and on the other hand, by external social conditions. This situation is very clearly illustrated by the words of Tsiolkovsky, who had impaired hearing since childhood: “Deafness was my chase, the whip that drove me all my life. She distanced me from people, from stereotyped happiness, made me concentrate, surrender to my science-inspired thoughts. Without her, I would never have made or finished so much work.” Thus, both biological and social factors are included in the processes of compensation of mental functions.

The effect of adaptation of a child with developmental disabilities also depends on his individual characteristics. The more intact cognitive abilities he has, the higher the adaptation effect. Personal qualities are of particular importance: interest, positive emotional orientation towards the world around us, the ability for voluntary activity, and personal activity.

Subsequently, the work of domestic psychologists continued to develop problems of compensation for mental functions.