ADM 3337 Chapter Notes - Chapter 2: Human Capital, Competitive Advantage
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18 Apr 2016
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Adm3337 chapter 2- strategy: the totality of decisions. Pay strategies differ among companies competing for the same talent and customers as well as for completely differing companies. Variance in strategic perspectives among companies in different and similar industries. Strategic perspective: a focus on compensation decisions that helps the organization gain and sustain a competitive advantage. Differences in firm"s strategies should be supported by corresponding differences in human resources strategy. Greater alignment between organization and compensation system leads to a more effective organization. Supporting compensation approach: less emphasis on evaluating skills and jobs and more on incentives to encourage innovation. Efficiency focused strategy: doing more with less by minimizing costs, encouraging productivity, specifying how jobs should be performed. Customer-focused strategy: delighting customs and basing employee pay on how well this is done. When business strategies change, pay strategy should change too: new business strategy = new compensation strategy. Compensation strategy must support organizational strategy: need alignment between compensation and hr strategies.