Management and Organizational Studies 3342A/B Chapter Notes - Chapter 1: Westjet, Traditional Chinese Characters, Human Capital
14 Mar 2016
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Document Summary
How people are paid affects their behaviour at work which affects an organization"s chances of success. Compensation is a major part of total cost of running a business, and often it is the single largest part of operating cost. These two facts together mean that welldesigned compensation systems can help an organization achieve and sustain competitive advantage. Poorly designed compensation systems can likewise play a major role in undermining organization success. Sometimes, differences in compensation between countries are listed as a cause of loss of jobs. Consumers sometimes see compensation as the cause of price increases. Compensation influences managers in 2 ways (1) a major expense (2) they use it to influence employee behaviours and to improve performance. Employees may view compensation as the return in an exchange between their employer and themselves, as an entitlement for being an employee of the company, or as a reward for a job well done.
