ADM 3337 Chapter Notes - Chapter 7: Reservation Wage, Marginal Revenue, Factors Of Production
18 Apr 2016
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Deciding between mirroring how other competitors are compensating or being different. Choosing mix of pay forms that is right for business strategy. Pay level: the average of the array of rates paid by an employer: base + bonuses + benefits + stock options/number of employees. 2 main objectives: to control costs, to attract and retain employees, higher pay level relative to competitors increases the costs to provide similar. Labour costs = pay level x number of employees products/services. Different employers set different pay levels: deliberately choose to pay above/below what others are paying for the same work. Companies may set pay levels for different job families. How companies compare in the market depends on the companies they compare to and the pay forms used in the comparison. There isn"t a single pay mix that is used universally. Factors affecting pay level and mix: competition in the labour market for people with various skills, competition in the g/s markets.
