Defining Competitiveness. Chapter 7. Chapter Topics. Compensation Strategy: External Competitiveness What Shapes External Competitiveness? Labor Market Factors Modifications to the Demand Side Modifications to the Supply Side Product Market Factors and Ability to Pay.
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External competitiveness refers to pay relationships among organizations - an organization’s pay relative to its competitors.
Pay levelrefers to the average of the array of rates paid by an employer: (base + bonuses + benefits + value of stocks) / number of employees.
Pay forms are the various types of payments, or pay mix, that make up total compensation.
Attract and Retain Employees
Labor CostsPay Level Decisions Impact Labor Cost
LABOR MARKET FACTORS Different Mixes
Nature of Demand
Nature of Supply
PRODUCT MARKET FACTORS
Degree of Competition
Level of Product Demand
Industry, Strategy, Size
Individual ManagerExhibit 7.3: What ShapesExternal Competitiveness?
Lead Policy Graduates in the Short Run
Employer of ChoiceCompetitive Pay Policy Alternatives
Pay with Competition (Match)