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External Competitiveness & Internal Equity in an Effective Compensation Program
The ability to create a successful market-based compensation program is contingent on a number of key variables. Yet none is more important than gaining a clear understanding of what it takes to have a compensation program that is externally competitive, while at the same time internally equitable.
In this assignment—
· Discuss what is meant by a market-based compensation program.
· Explain how an organization can balance external competitiveness with internal equity to achieve a successful market-based compensation program. Be specific.
· Illustrate with actual examples of employers achieving this balance. Also, provide examples of organizations failing to achieve one or both and illustrate what might result.
· Bring in at least 5 library sources to help strengthen and support your discussion.
Paper length: 4-5 pages, not counting the cover and reference pages.
Part 2
Aren’t Employees Ever Happy with Their Pay?
Describe your personal experiences (or a friend’s experiences) with an organization’s pay system. In your opinion, did the system possess internal and external equity (i.e., were employees compensated fairly)? What factors determined the level of pay employees received and how pay increases were determined? What factors should have determined the level of pay and how pay increases were determined? Discuss whether or not the pay system motivated employees to increase their productivity levels. What improvements do you suggest be made in the organization’s pay system?
Bring in at least 2 library sources to help strengthen and support your discussion.
Paper length: 2-3 pages, not counting the cover and reference pages.
Assignment Expectations
· Your paper should demonstrate critical thinking and analysis of the relevant issues and HRM actions, drawing upon all of the required background readings (Use website information sparingly (reputable websites only). – references will be attached
· Address all aspects of the assignment as stated.
· Provide private-sector employer examples of HRM programs, systems, processes and/or procedures as you address the above assignment requirements. Provide names of the employers. Use different employer examples in your Part 1 paper than those used in your Part 2 paper.
· Limit your web search and focus instead on your library search. Bring in information from the background readings as well to help add depth and validity to your discussion.
References
(see attached documents for these references)
Determining Base Compensation: Should you use Market value or internal equity? (2002). Employee Benefit Plan Review, 57(5), 4. Retrieved June 2, 2013, from the TUI Library.
Hale, J., & Bailey, G. (1998). Seven dimensions of successful reward plans.Compensation and Benefits Review, 30(4), 71-77. Retrieved June 2, 2013, from the TUI Library.
Jeppson, C. T., Smith, W. W., & Stone, R. S. (2009). CEO compensation and firm performance: Is there any relationship? Journal of Business & Economics Research, 7(11), 81-93. Retrieved June 2, 2013, from the TUI Library.
Minow, A. S. (2012). Reasonable compensation. California CPA, 80(7), 11-13. Retrieved June 2, 2013, from the TUI Library.
Murphy, K.J. and J. Zabojnik (2004). CEO pay and appointments: A market-based explanation for recent trends, The American Economic Review 94 (2), 192-196. Retrieved June 2, 2013, from the TUI Library.
