Question

Discuss how the pay model within your current organization or a previous organization guides strategic pay decisions. Explain how the three basic building blocks of the pay model may have been considered.

Answer 1

The pay model stands on the objectives of the pay system which deals with

1. Quality

2. Fair treatment

3. Performance

4. Compliance

5. Ethics

Every business or company must follow strategic pay decisions.A company can reinforce its business model through the pay model. Pay model affects the quality of the work of the employees, employee attitude towardt their clients, employees willingness to work and more flexible and adaptable, it also enable to learn new skills or suggestions. A pay model refers to the models which makes employees attracts to the work through base pay, advancement opportunities, health care benefits or insurance, work life balance, motivation, appreciation, and recognition for work.

The pay model within our current organisation is focussed towards engaging employees through building reward programs. The models helps in making a clear picture in the minds of employees about the vision of the company, business model and overall strategy of the company.

The pay model of a organisation guides strategic pay decisiond by:

1. Effectiveness of Human Resource department.

2. Motivating Employees.

3. Employee contributions

4. Internal alignment

5. Change in business strategies.

6. Monetary and Non monetary rewards.

7. Compensable factors such as working conditions, knowledge, accountability, problem solving, skills, and effort.

How compensation process starts:

The pay model within the organisation is based on rating which is evaluated by monitoring the throughout performance of the employee. The performance of the employee is monitored through the GR system which calculates the percentage of work done by each employee per day. On he basis of Gr score the performance of an employee is monitored and hence rating is evaluated.

The three basic building blocks of the pay model.

1. Compensation objectives- Strategic compensation objectives are the goals identitfied by an organisation. These are performance, ethics, work environment, fair treatment for all the employees, efficiency, compliance and strategy. These objectives are the standards for making a pay system of an organization successful.

2. Policies related to pay model-

a. Internal alignment deals with the monitoring of skill levels within the organisation.

b. External competition- Comparisions of pay with competitors. It refers to how sbould an employer pay relative to what other competitors are paying.

c. Employee contributions

d, Administration or Management- It is one of the important building block of pay model as the system will not achieve or meet its objectives unless it is managed properly.

3. Compensation system techniques-It is all about the pay structure which influences how well the organisation can able to meets its strategic objectives. These technies links the pay poliies and pay objectives.