Answer to Question #302354 in Management for NDhar

Question

Explain how internally consistent compensation systems and competitive strategy relate to each other. Explain the basic building blocks of compensation system.

Answer 1

Explain how internally consistent compensation systems and competitive strategy relate to each other.

Internally consistent pay schemes clearly identify the relative worth of each job within a corporation. The job structure or hierarchy is represented by this ordered set of jobs while A competitive strategy is an action plan that takes place over a lengthy period of time and is utilized by various corporations and firms in order to achieve a competitive advantage over their competitors in the business market.

Explain the basic building blocks of compensation system.

Organizational Goals - Make sure to pay employees for their individual performances as well as reward them for efforts that promote the company's, department's, and/or team's business goals.

Employee Interactions – Communicate the company's compensation plan realistically. Ensure that whatever message is conveyed is done so in a fair, competitive, appealing, and dignified manner. Employee discontent and turnover rates will undoubtedly grow if the market transmits a particular value and the employer offers below the market value.

Rewards and Recognitions – Separate project recognition from individual acknowledgment; this allows each employee's contribution and relevance to be more clearly recognised.

Timely Acknowledgements - Be mindful of the timing of rewards, as desirable performance should be recognized as soon as possible.

Simple Metrics — Keep performance measures as simple as feasible, and keep the number of measures to track to a minimum.