Reply 1

Reply 1

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Reply substantially to the 2 students’ threads. 150 words each Thread1 : Internal alignment, external competitiveness, employee contribution, and pay system management are the four policy issues in the pay model. Internal alignment guarantees that individuals with similar responsibilities and skills are compensated similarly. When one person has greater expertise or a qualification that is needed but not held by other employees, an organization may see a shift in this alignment. When a business considers what the market is willing to pay for a specific position, it is said to be externally competitive. Each company must decide if they want to remain competitive in terms of remuneration or pay below market rates, which will make it difficult to fill open positions and keep talent. Employee contributions are a critical policy choice; they are based on performance and must be thoroughly communicated to employees so that they are aware of the criteria used to evaluate performance. “Management refers to the policies related to management of the pay system. Management means ensuring that the right employees get the right pay for achieving the right objectives in the right way” (Milkovich, Newman & Gerhart, 2020). These four policies have basic compensation objectives including efficiency, fairness, and compliance with laws and regulation (Milkovich, Newman & Gerhart, 2020). Efficiency is linked to improved performance, higher quality, delighting customers and stockholders, and labor cost reduction. All pay systems strive for fairness as their primary goal. Its goal is to ensure that all employees are paid fairly and that their contributions and needs are considered. When companies make pay decisions, procedural fairness comes into play. Procedures require all firms to have a clear process for making choices and provide employees with direction on how to obtain greater compensation. Compliance is extremely important and if followed will keep organizations out of trouble. It includes following federal and state compensation laws and regulations. Thread: 2 Hello everyone! The 4 policy issues are internal alignment, external competitiveness, employee contributions, and management. The 4 policies work towards establishing fairness, compliance, efficiency, and retention of employees within the pay system. These policies serve as a foundation for creating their pay system. The first policy is internal alignment, which refers to comparing two roles in a company and determining which one deserves to be paid more. “Determining what an appropriate difference in pay for people performing different work is one of the key challenges facing managers” (Gerhart, 2020). Determining pay for different employees is a difficult task, especially when every role in a company is fundamental to the overall success of a business. This can be challenging when trying to maintain fairness and efficiency within a corporation. External competitiveness is tackling the challenge of how you will pay employees versus how competitors pay their employees. For example, if Walmart pays their employees only $12/hour, and Target starts employees at $14/hour, most people would opt to work for Target. This is an example of the importance of making sure that a company is offering competitive pay, otherwise it can be tricky to keep employees. Employee contributions refers to if employees should be able to contribute to how much they are compensated for their work. This area goes into the idea of pay for performance pay models, which aims to pay employees based on their performance. This also goes in the issue of paying employees based on seniority or education level. Pay for performance models create an environment where fraud can run rampant. The best example of this is the 2013 Wells Fargo Scam, in which Wells Fargo employees created fraudulent accounts in clients names to meet quotas. “Branch managers were assigned quotas for the number and types of products sold. If the branch did not hit its targets, the shortfall was added to the next day’s goals. Branch employees were provided financial incentive to meet cross-sell and customer-service targets, with personal bankers receiving bonuses up to 15 to 20 percent of their salary and tellers receiving up to 3 percent” (Tayan, 2019). The last policy is management, which is crucial to avoiding the same type of problems that Wells Fargo faced. “Management means ensuring that the right people get the right pay for achieving the right objectives in the right way” (Gerhart, 2020). All of these policies are important in making sure that a company is compliant, fair, and efficient.