Quiz 16: International Pay Systems

Business

Compensation means the total amount of money paid as cash or non-cash payment to employees in exchange of work done for any business. Compensation is more than the regular paid wages. Understanding compensation in global sphere starts with the recognizing of the similarities and differences and finding solution of how to manage suitably. The way people are paid around the world depends on the factors variation in global guide. The general factors in the global guide are employee, institutional, economic and organizational. The ranking of the factors in the global guide as per the belief in the importance for managing and understanding compensation are as follows: • Economic factors like competitive market and capital flows or ownership and taxes are most important for managing and understanding compensation. • Institutional factors like culture or politics, social contract, trade unions and employee federation are important factors for managing and understanding compensation. • Organizational factors like strategic intent and autonomy work roles are also vital factors after the institutional factors. • Employees as factors like their skills, knowledge, behaviour and demographics are lastly ranked factors in importance for managing and understanding compensation. Ranking of factors importance for managing and understanding compensation may differ with others. The ranking of others can be as follows: • Institutional factors like culture or politics, social contract, trade unions and employee federation are important factors for managing and understanding compensation. • Employees as factors like their skills, knowledge, behaviour and demographics are lastly ranked factors in importance for managing and understanding compensation. • Economic factors like competitive market and capital flows or ownership and taxes are most important for managing and understanding compensation. • Organizational factors like strategic intent and autonomy work roles are also vital factors after the institutional factors. Ranking of factors for managing and understanding compensation from international peers may also differ. The ranking of international peers is done as follows: • Organizational factors like strategic intent and autonomy work roles are also vital factors after the institutional factors. • Economic factors like competitive market and capital flows or ownership and taxes are most important for managing and understanding compensation. • Institutional factors like culture or politics, social contract, trade unions and employee federation are important factors for managing and understanding compensation. • Employees as factors like their skills, knowledge, behaviour and demographics are lastly ranked factors in importance for managing and understanding compensation. Ranking of the factors for managing and understanding of compensation may change over time. There are various things to consider when ranking of factors for managing and understanding compensation in global guide. The globalization of the financial markets, labour markets, trade agreements and businesses are to be taken into account when ranking factors in global guide for managing and understanding compensation.

If the company has to compete with others, it has to resort for the cheaper labor as is being done by the other countries. In such a case, employing labor from the cheaper labor countries is an alternative. The differences in the labor cost drive the decision behind outsourcing processes. Thus the growth of the mentioned company in these countries is rather inevitable due to these reasons. Mr. P's comments are true about the ramifications of outsourcing process over the lesser developed countries. The comments regarding the various processes are true in the view of various countries that resort to outsourcing.

The pay system involves the amount of cash or non-cash payment given to employees for their work done in the business of any organization. The pay system determination is a complicated process and involves different factors to be considered. The workers performing similar duties in the same area and how much they are paid are to be considered. The different eligibility criteria and the different experience for attracting various job positions with how much one can afford to pay after profitable income is to be included. The base level salary is to be determined after considering the different parameters in the pay system. The government of any country uses the nation-wide and the industry wide tables of compensation to measure the disparity and growth of different pay scales. This is done in comparison to the similar jobs in the different regions. The nation-wide compensation is the average calculated based on all compensation received by employees in every job as per the department of labour. The industry-wide compensation provides the general level of pay for particular industries in the total country. In business-strategy market approach nation-wide compensation is joined with industry-wide averages for determining average pay for particular job.