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The firm’s compensation and reward system can become a powerful mechanism to encourage the desired behaviors to achieve the organization’s strategic goals. (Dreher & Dougherty, 2001)
Developing a total compensation strategy can be further complicated by the organization’s business environment, changing workforce demographics, employee needs, cultural values, competitive dynamics, and the guiding values for an organization’s behaviors and underlying treatment of employee’s. The company’s image and reputation is reflected in the organization’s compensation and reward systems. (Milkovich & Newman, 2004)
A human resource management (HRM) system and compensation strategy will need to be developed that will fit the business strategy and business environment of the organization while satisfying all the stakeholders needs...
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