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Explanation & Answer
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Part one
Question 1
Salary surveys help in the provision of the necessary audience data that is used in
building competitive pay structures for the organization. The two primary objectives of wage
surveys are to ensure that team plans are equitable and that the plans are competitive externally.
Salary surveys thus helps in both compensation and in benchmarking (Bussin, 2002, 12-15)
Salary surveys contribute to measuring the organizational competitiveness on the pay
audience and in providing the information needed in salary benchmarks. This is important to the
organization when it comes to both particular industry pay and general pay especially in a
situation where the organization is involved in several plays
Salary surveys help in the setting of internal compensation policies to the group. In
addition to these policies, salary surveys helps in setting of the right optimal salaries for each job
and in keeping the desired position on the audience pay as the compensation strategy of the
organization defines
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Salary surveys also are also important to the organization because they provide the
required information concerning the average salary review and in the allocation of the wage
growth into a specific job position across the affected organization. In such a case, salary surveys
are used as a tool that identifies the key areas of employment in the organization because
competitors always try to protect they key job positions as it is seen in most of the salary surveys
A salary survey also helps the team with the needed information concerning the emerging
trends in both benefits and compensation areas. Most of the surveys also tend to bring addition
information such as the average number of employees per manager, the average service length
for a given company and even the number of promotions that an organization should have in a
specified period.
Two types of data gathered in a salary survey
Base salaries
This refers to a fixed amount of money that an organization pays to its employees in
exchange for the work performed. This salary does not include bonuses and benefits or any other
potential compensation from the organization. In most cases, this salary is paid to the employees
in biweekly paychecks.
During compensation survey, the organization looks at data like annual base salary and
total annual compensation mean. The organization also should look at basic pay net or gross. In
annual salary mean, the group is concerned with the amount per year or per hour that it pays its
employees. Total pay, on the other hand, is a representation of the wages received. It is a
description of the core salary of the employees and additional income and earnings. In a situation
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where a given employee has worked overtime or has been receiving incentive bonuses, the
amount will appear on the gross salary data.
Salary ranges
This refers to the established range of pay that organization establishes to pay to its
employees who perform a given a particular function or job. In most cases, a salary range has got
a minimum rate of remuneration and a maximum speed of pay and even a series of mid range
fund opportunities
When conducting a compensation salary survey, the organization need to look at data like
average salary, the range of set-off and even the pay band. On the data affecting the average
wage, the team should look at the median income of workers in a given period. The range of
compensation data on the hand, the organization should look at wages and salary that the
organization pays its employees for the work they do. During salary survey, the team needs to
consider financial compensation ranks in the employee hierarchy of the requirements of the
employees.
Question 2
Competitive advantage in the area of compensation does not involve going above the pay
audience through paying better bonus and salary to the organizational employees. According to
most human resource managers, offering better payment to organization workers is an effective
strategy that gives such companies the competitive advantage. This is false. Companies need to
do higher personnel expenses during recessions and crisis. This may bring about competitive
disadvantage to compensation as compensation strategy needs to be quickly redesigned so that
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the organization can continue its operations and influence the overall satisfaction of its
employees.
The group can set a higher position that the median on the pay audience to as to gain
competitive advantage, especially for smaller companies. This is done because these
organizations have to fight for the best talents with prominent agencies in the same industry.
The group also gains competitive advantage by keeping a long-term higher pay audience
position with higher margins. This helps the companies that have got excellent brand names in
employing the best of the best employees in the industry.
Organizations also gain competitive advantage through strategic pay audience positions
for may job positions. A competitive edge in compensation may be set mainly for the major job
positions in an organization. This strategy is very cheap as the remaining employees can be kept
in line with the pay audience median or even be maintained below the overall median. All the
organization needs to do is to reach a consensus concerning its key job positions.
The team can also gain a competitive advantage by differentiating its compensation
strategy and setting different levels of payment for its critical job positions. This helps such
organization to save the personnel expenses. Such organizations are also able to protect their key
employees. This strategy does not automatically protect the organization key employees; it only
help in supporting the organizational managers and other processes of the Human Resource
because the employees always feel very satisfied with their salaries
The competitive strategy for the corporate key job positions is in most cases the best
strategy for mature organizations that do not grow aggressively. It is also important for
organizations that majorly focus on their product innovations. The key employees bring out
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changes while the rest are paid reasonably enough by the content of the jobs they have
performed.
High skilled employees that an organization employs as a result compensation allows the
managers to offer high-quality products at low prices compared to those of the competitors. Such
a case is usually evident in the luxury product and services and in the firms that compete by the
quality of goods and services they provide. Even though it may cost much for the organization to
recruit and either train or retrain high skilled employees who can add value to the organization
products, such costs can be quickly passed on to the consumers through premium pricing.
Compensation also offers the competitive advantage to a team that has their competitive
advantage based on operational effectiveness. Skilled employees in such organizations usually
look for ways in which they can reduce internal costs while at the same time increasing the
operating merging of the body. A strong internal culture that is marked by high employee morale
and engagement can help in improving productivity and increase the profit (Falcone, 2007, 3741)
Question 3
Compensation managers are charged with the role of researching, maintaining and
establishing pay systems of the organization. On top of this, compensation managers can also
oversee the performance of the evaluation system of the body depending on the needs of the
organization. Benefit managers may as well be involved in handling the employee benefits.
The first role of set-off managers is conducting a research and then scrutinizing general
factors such as policies of the government, changes being experienced in the tax structures and
even the condition of the audience. This he...