External Competitiveness Refers to the Pay Relationships Among Organizations Pay Relative to Its Competitors
Essay by JacquelineMarie • August 4, 2015 • Article Review • 490 Words (2 Pages) • 1,244 Views
Essay Preview: External Competitiveness Refers to the Pay Relationships Among Organizations Pay Relative to Its Competitors
- External competitiveness refers to the pay relationships among organizations pay relative to its competitors. I would advise the marketing manager of Northern Software to implement the lag-pay level policy. I would recommend this pay strategy because they are a start-up company and may not be able to afford to pay a high compensation rate until business is established.
Lead Pay- Level Policy;
Pros:
*Higher pay
*Satisfaction in regards to pay
*Attract and retain employees
*Reduce vacancy
*Train faster
*Better quality employees
Cons:
*Less benefits
*Higher risk of losing job if the market is bad
Pay-with-Competition Policy;
Pros:
*Equal wage
*Equal chance to attract applicants
*Rates to competitors
Cons
*Less stand out applicants
*Minimal benefit
Lag Pay-Level Policy;
Pros:
*Higher future returns
*Increased employee commitment
*Teamwork
*Increased productivity
*Work/ Life balance
Cons:
*Lower pay (below market)
*High risk of being fired when market is bad
2. Performance Driven Policy
Base Bay= 50%
Benefits= 15%
Stock Options= 25%
Bonuses= 10%
I would offer these forms of pay to compensate for the lower than average base pay. The earning potential for the employee will increase having included benefits, stock options, and bonuses.
- The theories I used to support my recommendation are efficiency and compliance. I used the theories, because efficiency increases by hiring better employees or motivating present employees to work smarter or harder.
- Additional information I would like to have to refine my recommendation would if any qualifications or a particular level of education is required. This would help me to make sure I have set the base pay rate at an appropriate amount to attract and retain the talent.
- External competitiveness refers to the pay relationships among organizations pay relative to its competitors. I would advise the marketing manager of Northern Software to implement the lag-pay level policy. I would recommend this pay strategy because they are a start-up company and may not be able to afford to pay a high compensation rate until business is established.
Lead Pay- Level Policy;
Pros:
*Higher pay
*Satisfaction in regards to pay
*Attract and retain employees
*Reduce vacancy
*Train faster
*Better quality employees
Cons:
*Less benefits
*Higher risk of losing job if the market is bad
Pay-with-Competition Policy;
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