Internally Consistent Compensation Systems and Competitive Strategy
5 Explain how internally consistent compensation systems and competitive strategy relate to each other.
We established the importance of instituting internally consistent compensation systems. Tightly specified job descriptions that focus on work efficiency may be appropriate for companies that pursue a lowest cost strategy. There may be limitations; however, that hamper agility for companies that strive to differentiate themselves from their competition. For example, internally consistent pay systems may reduce a company’s flexibility to respond to changes in competitors’ pay practices because job analysis leads to structured job descriptions and job structures. In addition, ...
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