Case Study: Florida Company Fastens Its Sights on Global Growth

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Human Resources

Pay Decisions at Performance Sports

The first thing employers have to consider when developing compensation packages is equality. It is extremely important that businesses maintain internal and external fairness. Internal equity has to do with the fairness that exists between employees in the same business. External equity has to do with the relative wage fairness when compared to wages with other companies. Regardless of the compensation level, if either internal or external equity is not right, a business will often experience employee dissatisfaction. Employees will often begin to balance their performance through a variety of ways like decreased productivity to absenteeism and eventually to leaving the company altogether (Fogleman, 2004).

Broad banding is one way that can be used to determine a fair wage. This is often done by a market survey. These are normally fast and an easy way figure out compensation guidelines for many organizations. By making a few phone calls to other, similar businesses it can be determined what the market value is for a specific job. Five competency levels have been developed in order to classify employees according to three different criteria. These include authority to make decisions, skill level and supervisory capacity. Every employee can be classified by job title and competency level by using a capability scale. Employees who have similar skill levels or competency are grouped together in compensation bands despite their job title. These bands then compensate like employees at like rates across the entire organization and serve to maintain both internal and external equity (Fogleman, 2004).

In the traditional way, pay is thought to be an entitlement that employees get in exchange for showing up at work and doing well enough to avoid being fired. While base pay is awarded to employees with no consideration for performance, incentives and bonuses are extra rewards that are given on top of that in gratitude of a person's extra efforts. Pay-for-performance is a new way of doing things that is moving away from the traditional entitlement concept. A pay-for-performance plan adds to the base pay or merit increases in order to reveal how highly employees are rated on a performance assessment.… [END OF PREVIEW]

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Cite This Case Study:

APA Format

Florida Company Fastens Its Sights on Global Growth.  (2010, May 23).  Retrieved July 17, 2019, from

MLA Format

"Florida Company Fastens Its Sights on Global Growth."  23 May 2010.  Web.  17 July 2019. <>.

Chicago Format

"Florida Company Fastens Its Sights on Global Growth."  May 23, 2010.  Accessed July 17, 2019.