¶ … human resources. One is determining the levels of pay and benefits within the organization. Most companies are smart enough to understand the value of internal equity, since employees talk to each other, and it is difficult to discriminate internally in terms to pay, by law. Internal equity is practiced most strongly at companies that have strict policies with respect to pay scales. These are typically based on a combination of hierarchy, experience and ability. In some circles, the concept of internal pay equity specifically applies to all levels of the organization, from the CEO on down. A good example of a company that practices strong internal pay equity is Costco. Former CEO Jim Sinegal famously only made $200,000 per year and the new CEO makes less than a million, offering what is at least pay equity for a company in the United States. Internal pay equity is important because it signals that pay is strictly based on merit throughout the organization. People within the organization are more apt to feel that their pay is commensurate with their contribution to the company. If there is no internal pay equity, that indicates that the company may have problems. Workers might see that others who contribute roughly the same to the company are paid much more, and this can negatively affect motivation. So internal pay equity is something that creates positive motivation and facilitates a stronger team...
The competition for workers in such companies is considered perhaps to be across companies, which means that pay must be set in line with other companies in the same industry. This is something you see at high levels -- competition for top executives makes their pay more in line with those of other firms than in line with internal standards (Aggarwal & Samwick, 1999).
On the other hand, organizations that focus on external equity enjoys the advantage of attracting and retaining highly qualified employees. Similarly, the rate of staff turnover is extremely minimal as the staffs remain aware that their organization is offering compensation packages, which are streamlined accordingly with the compensation in the market. However, insisting on the external equity bears also some disadvantages. For instance, by focusing on the prevailing market compensation,
Riordan Manufacturing: Internal and External Compensation Riordan Manufacturing: External and Internal Equity Compensation Riordan Manufacturers, being a leader in its industry, appreciates the need to meet the needs of its employees through a fair compensation policy - one that equates pay with the value of the task performed, because fair treatment boosts employee performance and morale, and is an effective employee retention technique (Romanoff, Boehm & Benson, n.d.). Internal equity compensation describes
Analysis of California Pizza Kitchen Strengths and Weaknesses California Pizza Kitchen has been able to rise above the difficult economic conditions in their largest markets by concentrating on the most strategically important process areas first. At the center of their strengths, the chain has is the ability to support their global brand with a unique, branded dining experience (Fair Disclosure Wire, 2010). Creating the integration between a restaurant's global brand and
The amount and complexity of information created and overseen by the auditors in terms of expenses, earnings, and taxes will also increase. The ongoing growth of global organizations is also demanding greater auditing expertise concerning international laws and trade in addition to international mergers and acquisitions. Following Enron and the other financial scandals, Congress passed laws to curtail organizational accounting fraud. This legislation requires public companies to maintain established internal
Annual reports are strong for the breadth of information discussed, but with respect to depth are better used for internal analysis. They provide an overview of external issues but that overview should be supplemented with other research. Trade magazines and academic journals often have very specific articles that may or may not be of relevance to an external analysis. When they are relevant, they tend to provide excellent detail.
External Forces There are a number of forces that will impact the strategy of Hot Wings. The legal and regulatory environment governs a number of different aspects of the business, from licensing to human resources policies to food handling and other aspects of the business. There are regulations at the federal, state, municipal and possibly county levels. Food handling and alcohol are the most important elements within the regulatory environment as
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