MGT 462 Chapter Notes - Chapter 7: Level Set, Market Rate, Product Market
Document Summary
Setting a pay level that is above, below or equal to that of competitors. Pay level - average of the array of rates paid by an employer (base + bonus + benefits + value of stock holdings) / number of employees. Determining the pay mix relative to those of competitors. Pay mix - various types of payments, or pay forms, that make up total compensation. Pay-level and pay-mix decisions focus on two objectives: Higher the pay level, the higher the labor costs. Labor costs = pay level x number of employees. Higher the pay level relative to what competitors pay, the greater the relative costs to provide similar products or services. Different employers set different pay levels; they deliberately choose to pay above or below what others are paying for the same work. Base wage - basic cash compensation that an employer pays for the work perfumed.
