Management and Organizational Studies 3342A/B Chapter 2: CHAPTER RECAP

• School: Western University
• Department: Management and Organizational Studies
• Course: Management and Organizational Studies 3342A/B
• Professor: Jody Merritt

Document Summary

Strategy: refers to the fundamental decisions that a company chooses. A company defines it"s strategy through the tradeoffs it makes in choosing what to do. Corporate level: what business should we be in? . Business unit level: how should total compensation help this business gain and sustain competitive advantage? . Function level: how should total compensation help this business gain and sustain competitive advantage? . The ultimate purpose is to gain and sustain competitive advantage. It is critical that an organization has a compensation strategy that matches and supports it"s business strategy. There must be alignment between it"s compensation strategy and overall hr strategies. Compensation is the key to attracting, retaining and motivating employees with the abilities necessary to execute the business strategy and handle greater decision making responsibilities. Three types of compensation strategies: lead the market, match the market, lag the market. Unstated compensation strategy: emerges from current compensation practices.