What Shapes External Competitiveness (Compensation Strategy) Essay

What Shapes External Competitiveness ( wages Strategy) - Essay warning2. The degree of competitiveness being intense, increases in product prices would correspond to lowering of revenues, if undertaken. Thus most impudent producers would adopt a wait-and -watch attitude rather than take up indiscreet steps of hiking prices to serve short-run monetary interestsFinally, coming to organizational structure, it is believed that whether the business is labour or capital intensive, technology driven or market driven- all contribute towards the kind of wage or compensation strategy that would be enforced. As a usual practice, firms that are reputed, technology driven and well entrenched pay higher than graduation exercise ups and growing business houses.In the sphere of outside competitiveness, that is wage bargaining, there are several factors which devil their mark. The comparing of compensation rates of one organization with that of its competitors is what determines compensation st rategy.The relevant compensation strategy that needs to be pursued. It is believed that the organizations plan for how compensation decisions on the types and amount of pay are made, ground on the interests of the employees and keeping with the organizations mission and competitive position in the market. (Compensation and internal & external equity, 2008, para.3).Besides this, the level at which compensation is payable to staff, executive or top management level is also important as is the kind of individual contributions made by employees at these levels. Quality and measuring of performance, work commitment, loyalty for the cause of the organization and the ability to work harmoniously in aCompensation and internal & external equity. (2008).One step Compensation Framework. Retrieved June 17, 2010, from