Sign Up Now
Get instant access to over 1 million+ study documents
OR
Already registered? click here to login
By creating your account, you agree to our terms of service, privacy policy and student honor code.
Compensation Purpose & Strategy
Each different compensation strategy comes with risks and benefits, and the company has to balance these. We do not know where Chatham sits in terms of strategy, or in terms of its compensation policy. To determine the optimal compensation policy, and understanding of the implications of each policy is necessary.
If the company lags in terms of compensation, it will struggle to attract candidates. The most qualified candidates will go elsewhere, and there is likely to be high turnover as well. The starting candidates will be weaker, and ultimately the company's productivity will suffer. There are few benefits to paying below market, because lower productivity offsets lower wages. If you pay the market, then the company has to differentiate itself in other ways to attract people. This is possible, and can be a cost-effective means of attracting and retaining good people. Paying above market, especially leading the market, is a strategy best-suited to a company that needs the best -- so a company that leads by innovation or requires the highest productivity rates in order to compete. For most companies, leading the market mostly means high cost -- to leverage...
There are other approaches -- for example leading the market on top creative talent that is hard to find (i.e. developers) while lagging the market on sales and service reps, who are much easier to find (Csizmar, 2010).
For Chatham, meeting market is the best strategy. With no real information about the company other than their size and industry, there is also at that point nothing to indicate that they should be leading the market. They are an IT consultancy, but at 7000 people are too large to genuinely lead the market. And the needs of most clients are relatively routine -- they need security, they need a good architecture, a good stack, and they need effective service. There is no indication that Chatham is differentiating itself based on superior service, or superior talent. So leading the market merely represents an added expense. If it bakes that expense into its billing, then it will price itself above competitors. When you think about what those competitors are, it's the large enterprise-level firms that can offer more, or smaller niche firms that are more nimble and unique. There is no logic for…
References
Csizmar, C. (2010). To lag, lead or lead-lag: Examining the question in the real world. Compensation Cafe. Retrieved February 20, 2017 from http://www.compensationcafe.com/2010/10/to-lag-or-lead-or-lead-lag.html
Sturman, M. & McCabe, D. (2006). Choosing whether to lead, lag or match the market. The Scholarly Commons. Retrieved February 19, 2017 from http://scholarship.sha.cornell.edu/cgi/viewcontent.cgi?article=1338&context=articles
Strategic HRM Analysis Human resources management has been undergoing a shift for the past several decades that is meant to instill a system that is more consistent with the departments actual role in the business. "Strategic HRM began to emerge approximately twenty-five years ago, and since then it has evolved to include several streams of theory and empirical investigations" (Schuler & Jackson, 2005). These theoretical variants have all proposed that HRM
Human Resource Management and Development Human beings hardly work and live in isolation because they are social beings who consciously and unconsciously develop, plan, and manage relations. These relations become the outcome of actions and greatly depend on the extent of individual's ability to manage actions. Knowledge and experience are acquired during an individual's development and helps in understanding others and responding to various life challenges and situation. Later on, we
Mergers and Acquisitions: The Case of Microsoft and EPAM This paper focuses on Microsoft Corporation. The firm is one of the major public multinational corporations in America with headquarters in Redmond, USA. The company majors in developing, manufacturing, licensing, and supporting a broad scope of services and products that are especially predominant in the computing of various product divisions. The firm was established in 1975 with the goal of developing and
Attention to this and other metrics will be used in determining performance and thus compensation. J.P. Morgan Chase's accounting statements tell a similar though less extreme story. Non-interest revenue climbed substantially in 2009 after a significant drop in 2008, but have remained essentially flat over the past two years and over the five-year period. Interest income has shown a fairly steady decline, and though interest expenses are now a fraction
Question Berk and DeMarzo (2020) exemplify the variances between the three key approaches companies utilize for capital budgeting with leverage and within imperfect markets. These approaches comprise the Weighted Average Cost of Capital (WACC) method, the Adjusted Present Value (APV) Method, and the Flow-to-Equity (FTE) Method.The Weighted Average Cost of Capital methodWACC refers to a weighted average of the cost of debt, the cost of equity, and also the cost
However, during the little more than 10 years of this research line, contradictory results have been found (Brynjolfsson, Hitt, & Yang, 2002). From the 1970s to 1980s, those companies that invested more in IT suffered a relative setback in the work factor productivity indexes. This paper will discuss the relationship between IT and competitive advantage in following content. We believe that IT is necessary to improve competitive position of