Quiz 11: Separating and Retaining Employees


If a company were to hire new Human Resource Manager, the earrings invested on management would be an appropriate pay. It can be explained in the following way: As per the Median Annual Earnings in the bar graph studied, the management category is the one which is paid the highest. The Human Resource Manager is included in the management category for which the median for annual earnings is $ 100,000. If the company offers $ 92,880 to this manager, it will be considered an appropriate pay. The manager will not be called as under or over paid. The median defines a range for the annual incomes. The average salary could range anywhere up till $ 100,000. This figure defined or management category are maximum wherein the employees till management level are paid.

The reasons why high-tech companies are tempted to recruit talent away from one another and the impact of this practice on overall pay rates are explained below: Each company is lured to get the best talent available in the market. It is ultimately the employees that drive an organization. An organization is nothing without the employees. The amount of human capital available in the market is wide and sometimes it becomes difficult for the companies to choose the best talent. The companies make attempts to complete the hiring process at the earliest. These days even the high tech companies are luring away talent from their competitor or non-competitor companies. The skills and experience that an employee gains over years in one company can certainly be put to its best use in another company. When this kind of diversity is seen in an organization, it is better able to change its existing policies and execute them. However, if the employee is working in the same company, he has a limited amount of experience in working within that. The employee's knowledge is limited to one organization and he/she applies the same skills, works on the same tools etc. But when he works with various organizations, he/she is in a better position to apply for diverse job positions. So, in order to merge this talent, the organizations are always eager to hire from outside. Whenever another company hires the employee from outside, it indeed lures the employee with a greater package, more benefits of joining their organization, better fringe benefits and better perks. Along with these, better opportunities for growth and development are promised to the employee. This has an adverse impact on the overall pay rates. If every employee starts switching the company for whatever reasons, this will lead to an increase in the overall pay rates. As and when he leaves the company, he will demand more than what the company usually give to an employee of that much experience.

The following can be the general policies concerning pay that would best support PLP's business strategy. It is explained below: • PLP has followed a realistic approach in paying their employees. When the economy was in a recession the company as well as its employees knew that their pay would not rise. • The general policy that was followed by PLP is to pay the employees higher when the market is in a boom and to cut salaries and other costs when there is a decline in the market. • PLP believes in total customer satisfaction and offering the best to the customers and that is the reason that customers retained for a year. The acquisition made by the company also helped it to recover from recession. • The company believed in increasing their employee's salary without increasing the prices of its services. • The company truly appreciates in employees working overtime and is also supportive of paying them bonuses and incentives. • It has an optimistic approach and believes in enhancing average employee's pay too. Hence, the policy followed by PLP was supportive of its workforce and believed in keeping its employees happy.