GMS 401 Study Guide - Vehicle Insurance, Organizational Culture

• School: Ryerson University
• Department: Global Management Studies
• Course: GMS 401
• Professor: Kirk Bailey

Document Summary

A strategic perspective focuses on those compensation decisions that help the organization gain and sustain competitive advantage. The greater the alignment, or fit, between the organizational strategy and the compensation system, the more effective the organization. Strategy - fundamental business decisions that an organization has made in order to achieve its strategic objectives. Pay systems to align with the business strategy. Better the alignment, or fit, between the organization and the compensation system, the more effective the organization. The innovator vs, cost cutter"s vs. customer-focused business strategy. Defenders as those that operate in stable markets and compete on cost, Prospectors are more focused on innovation, new markets, Pay systems should align with the organization"s business strategy. When business strategies change, pay systems should also change. Their compensation strategy emerges from the pay decisions they have made. Unstated compensation strategy is inferred from compensation practices. There is a compensation strategy at work. Developing a total compensation strategy: four steps (exhibit 2. 4)