MHR 749 Chapter Notes - Chapter 7: Human Capital, Caving, W. M. Keck Observatory
5 Dec 2014
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External competitiveness refers to the pay relationships among organizations (pay relative to competitors) Setting a pay level that is above/below or equal to competitors. The avg. of the array of rates paid by an employer: base+bonus+benefit+stock options/# of employee. Considering the mix of pay forms relative to those of competitors. The mix of various types of payments that make up total compensation. Pay form and pay level focus on controlling costs & attracting/retaining employees. Pay level decisions impact on expenses (the higher the pay level, the higher the labour costs) The higher the pay level relative to what competitors pay, the greater the relative costs to provide similar products/services. Pay level x number of employees = labour costs. Company may pay more bc it believes its higher paid investment are more productive than others (better trained/innovated) Company may pay less bc it is differentiating itself on non-financial returns challenging/interesting work, superior training, rapid promotions, greater job security.
