Why is internal alignment an important policy in a strategic perspective of compensation? Internal alignment refers to the pay relationships among jobs/skills/competencies within a single organization, and it affects employees, managers and employers. The relationships form a pay structure that should support the organization strategy, support the work flow, and motivate behavior toward organization objective. The potential consequences of internal pay structures are vital to organizations and individuals.
Discuss the factors that Influence internal pay structure. Based on your own experience, which ones do you think are the most important? Why? There are external factors and organization factors that Influence internal pay structure. They are - External factors:
(1) Economic pressures
(2) Government policies, laws, regulations
(4) Cultures and customs
- Organization factors
(3) Human capital
(4) HR policy
(5) Employee acceptance
(6) Cost implications
In my opinion, I would say Economic pressures and Cultures and customs are the most important in external factors; Employee acceptance is the most important in organization factors. For external factors, it is easy to explain why I think Economic pressure is an important factor, because many organizations change their pay structure and policies during the bad economic time. For example, a lot of companies lay off employees or cut their payment and benefits in the recent economic recession. In addition, I think different cultures cause different pay structures, and the cultural customs will not so easy to be changed in the short time. For example, many traditional Japanese companies still place heavy emphasis on experiences in their internal par structures, and seniority plays an important factor. For organization factors, employee acceptance is the key factor. Employees judge the fairness of their pay through comparisons with the compensation paid...
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