Running head: DISCUSSIONS PAPER
Week 1 Discussions Paper
Part One: Discussion
Four policy issues in the pay model
There are four policy decisions to consider in any given pay model. These policy decisions
include internal alignment, external competitiveness, employee contributions, and management
of the pay system (Gerhart, Milkovick & Newman, 2014). They are:
Internal alignment – relates to the alignment of jobs with the right skills of an individual
employee within the organization.
External competitiveness – refers to the comparison between the remuneration packages
offered by one organization with that of its competitors.
Employee contributions – refers to the emphasis of employee performance as a
determinant of the compensation package due to employees.
Management of the pay system – a system that ensures that the right people get the
right pay for achieving the right objectives in the right way.
Purpose of the objectives in the pay model
The objectives in the pay model serve a very important role, which is to help the
management in a company to retain its employees as loyal and dedicated members of their