Business Finance
Strategy Analysis ( Employee and labor relation class)

Question Description

Assess the circumstances when it would be more appropriate for an organization to follow the comparative norm strategy to determine an employees' wage rate, versus the ability-to-pay or the cost of living strategy.

Final Answer

If a company follow the comparative norm strategy to decide a worker's salary, the trend is that there is an unreasonable treatment with employees because using this comparative norm strategy might rather be subjective. Also using comparative norm strategy may be a reasonable way of paying workers if an organization will only look at workers work and performance. Alternatively, if a company will use the cost of living strategy, the trend is that the workers will not be rewarded properly according to their work and performance since in this strategy the administration will only look at the workers’ lifestyle.

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