Compensation And Benefits Of Compensation

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There is a lot of talk about compensation among organizations and employees in today’s work environment. Questions such as, what is the cost to the organization and what will be the organizations return on their compensation investment, are common among questions being asked among organizations. Because of all this, there has been a variety of different pay compensations put into place in the work force. The following paragraphs will talk about one company, Bumpbie, and how a strategic compensation plan, integrated properly into the company, can help to drive the company objectives. In today’s society market, competitive compensation could mean the difference of your organization retaining the best talent or losing a skillful employee …show more content…

Organizations who wish to use the first quartile would be utilizing a strategy commonly referred to as lag the market strategy. This strategy allows the employer to pay the employee below the market for a number of reasons. The Lag-the-Market strategy should never be implemented if the organization has the financial holdings to compensate an employee. For example, as smaller organizations are established they may not have the financial resources to pay higher wages to potential employees. Employers who decide to use this strategy are more susceptible to higher turnover and poor performance. The Match-the-Market strategy is the second quartile strategy for organizations concerned with positioning themselves in the labor marketplace. This strategy happens to be the most popular strategy deployed by employers who wish to fix pay levels correspond to marketplace pay levels. As organizations select this strategy HR professionals are attempting to create a balanced approach for managing labor costs and other cost burdens. The Lead-the-Market strategy

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