Research Paper
Strategic Framework for Compensation
Session 2
Chapter outline
• Explain why the same compensation system that is a success in one firm can be a failure in another • Describe an Organizational system • Explain how the strategicframework for compensation can be used as a tool in designing effective reward and compensation system • Describe the three main sets of elements in the strategic compensation framework, and how they relate to one another • Describe the three main managerial strategies that organization can adapt, and explain the implications for the most effective reward and compensation system • Describe the five main determinants of managerial strategy and how can they be used to select the most appropriate managerial strategy • Analyze any organization to determine the most appropriate managerial strategy for that organization
The concept of fit
• The success or failure of any reward system depends on how well it fits the organizational context and total organizational system • To successfully design, manage, and modify any reward system, one must understand this context and how it links to the reward system • In order to understand the aspects of the organizational context, and how it relates to reward strategy one must understand the framework. • This framework consists of: • Three managerial strategies that an organization can adopt How each of these strategies relates to organization’s structure Its best fit reward system • The framework then identifies the determinants of managerial strategies since these will determine the most appropriate strategy
Organization as a system
Inputs
Human Resources Information Resources Physical Resources Financial Resources Transformation Outputs Consumers or Beneficiaries Resource Providers
Procedures
Organization as a system
• Organizations are systems that apply procedures to a set of resources in order to transform input materials into outputs that some one values
Session 2
Chapter outline
• Explain why the same compensation system that is a success in one firm can be a failure in another • Describe an Organizational system • Explain how the strategicframework for compensation can be used as a tool in designing effective reward and compensation system • Describe the three main sets of elements in the strategic compensation framework, and how they relate to one another • Describe the three main managerial strategies that organization can adapt, and explain the implications for the most effective reward and compensation system • Describe the five main determinants of managerial strategy and how can they be used to select the most appropriate managerial strategy • Analyze any organization to determine the most appropriate managerial strategy for that organization
The concept of fit
• The success or failure of any reward system depends on how well it fits the organizational context and total organizational system • To successfully design, manage, and modify any reward system, one must understand this context and how it links to the reward system • In order to understand the aspects of the organizational context, and how it relates to reward strategy one must understand the framework. • This framework consists of: • Three managerial strategies that an organization can adopt How each of these strategies relates to organization’s structure Its best fit reward system • The framework then identifies the determinants of managerial strategies since these will determine the most appropriate strategy
Organization as a system
Inputs
Human Resources Information Resources Physical Resources Financial Resources Transformation Outputs Consumers or Beneficiaries Resource Providers
Procedures
Organization as a system
• Organizations are systems that apply procedures to a set of resources in order to transform input materials into outputs that some one values