Wages and Incentive Instruments for Enhancing the Performance of Construction Industry Employees

: The aim of the article is to present quantitative development of wages and incentive instruments in the Czech Republic during the recent period and at the same time to provide an insight into the emerging changes in the labor market brought by the industry and the construction industry digitization. Strong demand for increased corporate social responsibility of the companies in the technical, economic and environmental protection and care sectors, and in particular in mutual communication between market partners, has had and will have an impact on wage policy and creation of employer wage systems. This article briefly gives the insight into what visions and strategies this situation brings into the construction industry field.


INTRODUCTION
Construction industry is a beautiful profession. It allows you to see and show the results of the work of individuals and entire teams even after decades, which is not common in every industry. And it is precisely this view of this complex work that enables to motivate employees in various ways to achieve business plans. Incentive instruments have been developing in the same way as the technical and technological developments in the construction industry have. In particular, however, they adapt and modify according to the changes that are brought by the shift in people's behavior and attitudes to construction work. The post-war BB generation called "baby boomers" (born 1945-1964) gradually entered the labor market, followed by X generation (born 1965-1979) and later the Y generation, more commonly referred to as "millennials" (born 1980-1994).
People born between 1995 and 2010 are included in the Z generation, sometimes referred to as "centenarians". First representatives of this generation entered the work process around 2015, and now the first university educated graduates of Z generation follow. According to the research, the very Z generation will be the hatchery of digital talents for the upcoming digital age. In the work environment, however, the centenarians behave in a different way than any previous generation, including the millennials. They represent a fully technological generation with tremendous confidence, but at the same time with an autonomous willingness to work hard and in more assertive and much more demanding way than the millennials. Completely different and new incentive instruments are connected with this situation.
Nevertheless, it is clear that the classical wage incentive instrument will also appeal to this generation. Providing wages to employees is a daily part of the employer's work. This process is complicated by different and often contradictory expectations of the employer and their employees. On the one hand, wages are a means to meet the needs of employees and their families, but on the other hand, they are a significant cost item for the employer. At the same time, they are an instrument of material stimulation of employees to achieve the employer's business plans. Moreover, the impact of the remuneration process significantly affects both the business and economic situation of the company and the social situation of the employee. Furthermore, the conditions for the provision of wages are quite significantly regulated by legislation.
The aim of the article is to present quantitative development of wages and incentive tools in the Czech Republic during the recent period and at the same time to provide an insight into the emerging changes in the labor market brought by the industry and the construction industry digitization. Strong demand for increased corporate social responsibility of the companies in the technical, economic and environmental protection and care sectors, and in particular in mutual communication between market partners, has had and will have an impact on wage policy and creation of employer wage systems.

REMUNERATION FOR WORK, WAGES AND THE DEVELOPMENT OF MINIMUM AND GUARANTEED WAGES
The legal regulation of wages in the Czech Republic results from the Constitution, namely from Article 28 of the Charter of Fundamental Rights and Basic Freedoms. Details are regulated by Act No. 262/2006 Coll., Labor Code, as amended. In addition to this constitutional principle, the principles arising from international conventions and European Union directives must apply in the area of wages. Wage rights and their protection are an organic part of labor relations. The fundamental principles of labor relations in the field of wages are given by the constitutional right to equitable remuneration [1].
The Labor Code distinguishes between remuneration for work in the business sector (it is called a wage) and in the sphere of public services and administration (it is called a salary). The employee is entitled to wage, salary or remuneration from the agreements on work performed (Tab. 1). TECHNICAL JOURNAL 14, 4(2020), 473-479  The minimum wage is a protection against the provision of unduly low wages. It is the lowest allowable amount of remuneration for work in an employment relationship, i.e. the lowest allowable amount of wage, salary or remuneration from the agreement. In the Czech Republic it is determined by the Government Regulation. The minimum wage category is a very sensitive variable perceived quite contradictory by individual partners in the labor market. Nevertheless, at optimal levels, the minimum wage has a protective function for both employees (protection against poverty) and employers (a uniform level of lowest earnings introduces equal conditions of competition). Similarly, the minimum wage is conceived in most EU countries. In some EU countries (Denmark, Finland, Austria, Sweden, Cyprus), the minimum wage is ensured by collective supranational agreements covering most employees. Employees whose wages are not negotiated by a collective agreement are protected against the provision of unduly low wages by a "guaranteed minimum wage". The work carried out is graded according to its complexity, responsibility and effort into eight individual categories, for each of which there is the lowest level of guaranteed minimum wage (Tab. 2). Thus, not only the minimum wage is binding for the employer, but it must be remunerated at least at the level of the respective groups of guaranteed minimum wages. It grows with every minimum wage increase.
Indicative examples of work falling within individual categories: 1 st category: kitchen assistant, seamstress, cleaning woman, delivery man, porter 2 nd category: digger, scaffolder, medical orderly, chambermaid, tobacconist, plumber 3 rd category: bricklayer, plumber, tinsmith, heating engineer, waiter, bartender, barber, hairdresser 4 th category: general nurse, midwife, cook, tailor 5 th category: bus driver, foreman, dispatcher, paramedic, salary accountant, kindergarten teacher 6 th category: business clerk, IT system creator, independent designer of complex buildings 7 th category: financial expert, doctor, dentist, pharmacist, marketing expert or programmer 8 th category: expert on financial and business strategy, top scientist.
For the sake of interest and comparison, the following table (Tab. 3) shows the income scales or claim or guaranteed component of the income of academic, scientific and research workers at a selected technical university in the Czech Republic, which were in force on 1 st January 2020.  The current development of the minimum wage in the Czech Republic is shown in the following overview (Tab. 4). To estimate the conversion between the currency in Euro and Czech crowns it is stated on average that 1 EUR corresponds to approximately 25 CZK. For comparison, Tab. 5 also lists the minimum wages in selected countries in Europe.
The evolution of the minimum wage in the time series from January 2009 to January 2019 is shown in the following chart ( Fig. 1) for countries in which a minimum wage is introduced in the European Union as well as a comparison with non-EU countries.
Evidently the highest minimum income is in Luxembourg, where it exceeds 2,000 EUR/month. It is therefore 3.42 times higher minimum income than in the Czech Republic. The lowest minimum income is in Bulgaria.
The development of the minimum wage is related to the income growth. The following chart (Fig. 2) shows the growth of the average income in the Czech Republic in CZK.
The minimum and average income ratio is shown in Table 6 in the time series. As can be seen, between 2009 and 2012 the minimum income stagnated and its ratio to the average income was decreasing. Gradually, the whole system found itself in a situation where it was not worth to work for a minimum wage and it was better to live on social benefits. There has been a tendency to reverse this trend in recent years.  For the further development of the labor market, it is certainly necessary to consider not only the income as an incentive instrument, but also the benefits provided by employers to employees. In connection to the industry, construction and services digitalization onset, there will be changes in the perspective on remuneration. The importance of corporate social responsibility towards the ecological, economic and social sustainability of the world significantly strengthens. All of these have and will increasingly have an impact on workers' performance.

WORK COMPETENCES, JOB POSITIONS AND INCENTIVE INSTRUMENTS (BENEFITS)
Working in the digitized industry and construction industry requires new competences. Individuals are expected to be flexible, independent and capable of addressing project-oriented work tasks more and more frequently. In addition to professional competences, these are basic "skills for the 21 st century", such as the ability to (virtually) cooperate in teams made up of different experts with different responsibilities. Today's workers need to be able to acquire knowledge independently according to their current needs -often directly in the workplace. This requires knowledge of new media technologies and devices (web 2.0, mobile media) and knowledge of the risks and dangers associated with the data use and virtual systems (data security and protection). However, all this will not work without continuing education (lifelong learning).
In the broader meaning of Industry 4.0, there is one key element -interconnection. The automation and process optimization in the field of production, logistics and services goes hand in hand with it. While the first three stages of industrial production were characterized by innovations in the fields of mechanics (industry 1.0), electronics (industry 2.0) and information technology (industry 3.0), it is typical for industry 4.0 that classic, industrial processes are increasingly interconnected with communication and data technique to create so-called cyber-physical production systems, thus enabling the realization of the vision of selfmanaged production.
Z generation employees prefer their own work environment -they do not like sharing space with others. Their intimate relationship with devices makes them less sociable than the millennials. From the beginning they are interested in how they will contribute to the running of the company. They long for doing beneficial things and leaving a trace. In the construction industry, the introduction of digital building information modelling/management (BIM) represents such an initial trace of the digital revolution. The centennials greatly value their time and want to know in detail the model by which they will be remunerated. They expect regular promotion or at least salary increase in exchange for the loyalty to the employer. They are pragmatic and interested in non-monetary compensation such as above-standard health care, retirement benefits and long-term benefits -in which they are closer to generations X and BB than to millennials of Y generation. [4] Along with the changing behavior of the forthcoming generation and the progress in digitization and work automation, there are many vulnerable professions. Some professions can be expected to disappear completely (Tab. 7); however, new professions can be expected to emerge that cannot be imagined now. At the same time, the current predictions expect that the number of newly created positions will be lower than those that have disappeared. [6]  Digitization era is becoming part of everyday life, and in many aspects, we may not have noticed it. In 2015, digital economy accounted for 4.2% of global GDP and provided work for 17 million people worldwide, with additional 15 million jobs indirectly supported. The period of the Fourth Industrial Revolution will change the view of work and employment as perceived today, education will not be adapted to one profession as it has been until now, but will emphasize interdisciplinarity, complexity, creativity and flexibility.

CORPORATE SOCIAL RESPONSIBILITY AND INDUSTRY 4.0
Corporate Social Responsibility (CSR) means sustaining economic success and gaining a competitive advantage by building a company good reputation and gaining the trust of people working for it or living in the community within its business field. It represents an important aspect of strategic corporate behavior and is recognized as such at European Union level. Within this concept, the company behaves responsibly not only in the area of business decisions and strategy, but also in the area of the environment and social impact of the company functioning.
Customers expect not only high-quality products and services from the company, but also to be a reputable and respected supplier on the market. The company suppliers want to sell to customers who return to their products or services and pay for the products within the deadlines. The people and community in which the company operates want to know that the company behaves responsibly to the society and the surrounding environment. Employees like to work for a company they are proud of and which values their work.
The role of companies in the society has currently been changing. The public assesses and evaluates them not only according to the quality of their services and products, but also according to the degree of responsibility of their activities in the society. Responsible behavior brings not only greater loyalty of its employees but also strengthening of the brand value and good reputation, good relations within the region, and last but not least, significant potential for solving possible crisis situations. Corporate social responsibility behavior is a long-term investment in its overall development.
A company that chooses this strategy should ask the following questions right from the very beginning: which area it will support, in which regions, what it wants to achieve, and what resources it will use to do so. It appears that the interconnection of the commercial sector with the public benefit area is also important in the exchange of knowhow by involving employees in the provision of professional services. [7] The trend will result in the growth of services, as the customer demands not only quality products, but also related services that increase their comfort. Such a market brings a new view of the skills of work teams: "In our view, the key skills for the 21 st century are the following abilities: to orientate oneself, to adapt, to convince, to cooperate, to lead, and to express empathy."

INFLUENCE OF WAGE AND BENEFITS ON WORKERS' BELONGING TO THE COMPANY
The impacts of Industry 4.0 on the labor market are really complex, but also contradictory. Due attention has not been paid to their investigation in the Czech Republic yet. One of the exceptions is the study called Impacts of digitization on the labour market in the Czech Republic and the EU [6] from the Department of EU Strategy and Trends of the Office of the Government of the Czech Republic. The text deals only with the effects of narrowly conceived digitization and attempts to estimate the risk of employment in occupational groups on the basis of coefficients that are taken from the study dealing with the US labor market. The calculations made so far on the cessation and creation of jobs differ in relation to the methodology used. Specifically for the Czech Republic, it is estimated that 10% of jobs will be strongly threatened by automation over the next 20 years and that 35% of jobs will experience significant changes in activities carried out. If this estimate published in the OECD study (Employment Outlook 2016) is related to the number of employees in 2015, about 408,000 jobs will be highly threatened and 1.4 million jobs will undergo substantial changes.
In 2017, at the conference Towards Work 4.0, Prime Minister Advisory Director Vladimír Špidla said that the digitization and robotization of industry will cause a radical change in the organization of work and many jobs will disappear. It is estimated that there will be as many as 53% of them in the Czech Republic. It follows from the above that the industrial revolution will have a negative impact on unemployment. However, it will be a longer time horizon and if the education system is reformed, the labor market will be prepared for these changes. The Czech Republic has one of the lowest unemployment rates in the EU as a whole and currently companies have difficulty finding skilled workforce.
The second aspect is average wages, which are among the lowest in the EU. This prevents the rapid accession of modern technologies. This access of modern technologies and the massive purchase of technologies will be influenced primarily by the business cycle, when economists are already discussing a "overheated economy" (e.g. Governor of the Czech National Bank Jiří Rusnok, 2018) and political determination to bring wages in the Czech Republic closer to the European Union average. As the Czech Republic is a small open economy, the influx of foreign investment will have a major impact on the rapid access of Industry 4.0.
When comparing the share of unemployed persons and the general unemployment rate for individual regions and the Czech Republic as a whole, significant differences can be seen. Given the fact that the authors of scientific articles state that the redundancies will mainly affect low-skilled workers, further deepening of regional disparities can be expected. According to the analysis carried out, the importance of the manufacturing industry for the Czech Republic results to be clear. Industry 4.0 is expected to shift employment from industry to the knowledge-intensive services sector. The implementation of Industry 4.0 principles into industry is of limited significance, as long as the surroundings of the factories, including towns, will operate in "old-fashioned" way without applying Industry 4.0 principles. These apply mainly at fundamental conceptual changes in energy, transport, Smart Cities sectors, etc. [9]

CONCLUSION
Czech companies regularly update their remuneration systems; however, half of the managers do not use them correctly. More than 70% of Czech companies have updated their remuneration system in the last two years. This points to the fact that companies are aware of the importance of setting remuneration and wage systems in line with labor market trends and developments on the labor market. However, the question is: Do companies use their remuneration systems correctly?
Czech companies update payroll systems not only to attract new employees, but also to stabilize existing ones and not let them run away to the competition. This year, the wage system has been updated by 27% of Czech companies; last year it was 33% of companies; and two years ago 10% of companies started updating their wage system. This results from a survey [10] among Czech companies on the topic of setting up payroll systems.
However, the results of the survey also showed that in half of Czech companies, the wage system is not perceived as an instrument for managing people and influencing labor productivity. In one third of the companies surveyed, managers do not feel the need to have an instrument to influence employee work productivity, and in a quarter of companies, managers with this approach are a minority. Czech companies thus face a challenge for greater involvement of managers in people management.

Figure 3
Managers' pressure on changes in remuneration systems [10] Wages and incentive systems are essential for the functioning of Czech companies. Companies regularly try to improve their quality. A quality and well-set payroll system should fulfil four basic attributes in order to complete its main role, namely to motivate employees to perform well: 1. Transparency -all employees and of course managers and team leaders should know how remuneration is set up in the company, what their wages consist of, and for what and how they are valued. 2. Clarity -the system may be transparent, but at the same time unclear for most of the employees. Everything should be set so that each employee can understand it. 3. Motivation -the benefit system should motivate all employees in all categories, not only certain groups, and in others raise the impression that they are neglected and their work is less important and less valued. 4. Fairness -payroll system setting should be fair, not disadvantageous, and fairly rewarding all employees according to their job title and competences. [11] Across the world, a successful solution is one that benefits both people and the environment that is actually our natural home. Similarly to nature, it applies to the teams at workplaces, that if the individual members or elements of the system do not "win" each on its own, then the team as a whole will not "win" as well. [12], [13]

Notice
The paper was presented at PBE2020 -International Scientific Conference "People, Buildings and Environment 2020". The 14 th conference was held in the Rožnov pod Radhoštěm city, the Czech Republic, from 7 to 9 October 2020. The paper will not be published anywhere else.