After establishing a policy line for pay in the external market a company must decide on its own pay policy. Which of the following will affect the company's pay policy?
A) the role of performance-based pay in the organization
B) the stage of the firm's development
C) the strength of union demands
D) the organizational culture
E) all of the above

Question

Quizplus · Accepted Answer

All of the listed factors can affect a company's pay policy. For example:

A) The role of performance-based pay in the organization will affect how the company decides to link pay to performance, and how it structures its pay system.

B) The stage of the firm's development may influence how much the company can afford to pay, and whether it needs to offer more incentives to attract certain types of employees (e.g. early-stage startups may offer equity compensation to compensate for lower salaries).

C) The strength of union demands can impact whether the company needs to negotiate pay rates with unions, and whether it needs to comply with certain collective bargaining agreements.

D) The organizational culture can shape employees' expectations for pay, and affect how receptive they are to different types of pay structures or incentives.

After Establishing a Policy Line for Pay in the External