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Factors Affecting Choice of Occupation

Exam code: 2281
Written by: Ashika|Reviewed by: Caroline Carroll|Updated 2 July 2026

Wage Factors

Wage Factors

  • The occupational choices of workers are influenced by a range of wage and non-wage factors, which are often held in balance when making decisions about where to work

  • Wage factors are financial payments that workers receive for their labour

  • Non-wage factors incorporate a range of influences that are meaningful to a worker
       

A Summary of Wage Factors That Influence Occupational Choices

Factor

Explanation

Wages

  • An agreed amount of money/hour and is calculated directly from the number of hours worked

  • E.g. If a student works in a restaurant for 6 hours, 5 days a week and she gets paid $10/hour, her weekly wage is $300 (6x5x$10)

Salary

  • Employment contracts often state the agreed annual salary the employee will receive

  • This is then divided by 12 and paid monthly (in the USA it is divided by 24 and paid every 2 weeks)

  • The hours worked monthly may vary but the pay received is always the same

Commission

  • Often used as payment to sales people

  • It is typically a percentage of the value of the transaction involved, e.g. estate agents receive 3-7% of the selling price of any property they sell

  • This can motivate employees to maximise sales

Bonus

  • Money paid in addition to a salary and is usually single annual payment

  • Often paid when the company earns high levels of profits, or as a reward for exceptional worker performance

Piece rate pay

  • A fixed amount paid to the employee for each completed item produced, e.g. 25 Rupees paid to workers in India for each pair of socks they produce

Performance related pay (PRP)

  • Payment based on how well the worker performs

  • Workers doing exactly the same job may receive different compensation based on different outcomes they achieve

Share options

  • Payment through the issuing of shares in the company the employee works for

  • This is usually in addition to a monthly salary

  • The monetary value of the shares provided to the employee can be calculated on any given day as: number of shares x share price

Non-wage Factors

Non-wage Factors

  • Many different non-wage factors influence a workers choice of occupation  

  1. Fringe benefits: Benefits provided in addition to a normal salary - such as childcare, free lunches, gym membership, or a company car - can be significant in influencing a person's choice of occupation

  2. Length of training or level of education required: The longer the time period required to study/train for a job, the fewer the number of people who seek employment in that occupation, e.g. it usually takes seven years to become a lawyer 

  3. Job security: Employment contracts in different industries have different time periods attached to them. Some contracts are one to four years in length,

    and enjoying work is a significant part of generating job satisfaction. Workers will often change their jobs/careers so as to improve their job satisfaction 

  4. Career prospects: Jobs with a defined pathway for promotion (and salary increases) are often more desirable

  5. Level of challenge: Many workers step into an occupation due to the challenge of the role, e.g. firefighters

  6. Status: Some jobs carry a higher recognition in society which workers find appealing, for example doctors, surgeons and lawyers

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