Professional Documents
Culture Documents
Pay Model
• Compensation Objectives
• Employee Contributions
– Pay for performance or flat rate for similar skill sets
– Should profits be shared with employees?
– Important decision as it affects employee attitude and behaviour
• Management
– Right people get Right pay for achieving Right objectives in the Right
way
– The best system design is of no use without competent management
– Management needs to answer “So what” difference does it make to
achieving objectives
Pay Model
Strategic Choices
• Innovator
• Cost Cutter
• Customer Focussed
Strategy: Innovator
• Strategy: • HR Alignment:
– Increase product complexity – Committed to agile
– Shorten product life cycle – Risk taking
– Innovative / creative
• Strategy: • HR Alignment:
– Focus on efficiency – HR / Labour cost focus
– Head count management
– Do more with less
– Employment security
– Selective hiring
– Self-managed teams or team working
– High pay contingent on company performance
– Extensive training
– Reduction of status differences
– Sharing information
Best Fit Model / Contextual Model
• Argument: HR strategy becomes more efficient when it is linked/tailored to its surrounding
context or environment of the business
– ‘External fit’:
• HR activities must fit the organization's competitive strategy
– ‘Internal fit‘:
• Specific HR policies designed to `fit with and support each other‘.
• Policies which work in opposite direction should be avoided. For
example, encouraging teamwork but rewarding individual performance.
Best Practice or Best Fit