Question

Discussion 1.2: Pay Model – Strategic Pay Decisions Includes assessment. Must post first. 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. To receive full participation points, you will need to post one original response to the question and reply to at least two classmates’ responses.

Answer 1

Pay model is the model followed by the company to make its payments. This is based on three basic building blocks i.e. compensation objectives, policy decisions and techniques. The compensation objectives deal with the ethical aspects of the payment. The policy decisions deal with how the objectives are to be achieved and the techniques deal with the way in which the pay model will be implemented. There has to be sync between the pay model, its objectives and the implementation of the techniques. The policy decisions include the decisions regarding internal alignment, external competitiveness, employee performance and management. In order to ensure that the pay model is implemented as planned, the best-fit approach has to be followed. This means that the company should be able to modify and manage its payments according to the changes in the dynamic business environment both externally as well as internally. The best fit approach will include the following steps: Understanding the environment, deciding the strategy, implementing the strategy and then checking whether the strategy is the best fit or not.