Regardless of why someone is looking for a new job, compensation will be an important factor. It is one measure that can be applied across all organizations and all industries. Applying basic economics, a job seeker would like to maximize the compensation while an organization would like to minimize compensation. However, the incentive to minimize compensation is reduced, if lower compensation leads to lower productivity and higher attrition. Cost of attrition is high. Hence, to minimize the cost of attrition, an organization would need to increase the compensation beyond the minimum. Of course, the desired quality of work force must be ensured.
Key questions are as follows:
- Should you pay based on the compensation of a similar profile ...