Strategic Compensation Decisions

  1. 3 Explain strategic compensation decisions.

Compensation professionals provide a strategic contribution to the company when they can answer yes to the following three questions:

  • Does compensation strategy fit well with the objectives of competitive business and HR strategies?

  • Does the choice and design of compensation practices fit well to support compensation strategy?

  • Does the implementation of compensation practices effectively direct employee behavior to enhance job performance that supports the choice of compensation practices?

Companies base strategy formulation on environmental scanning activities. Discerning threats and opportunities is the main focus of environmental scanning. A threat suggests a negative ...

Get Strategic Compensation: A Human Resource Management Approach, 9/e now with the O’Reilly learning platform.

O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.