Human Resource Management – Reward Management

External competitiveness versus internal equity

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A policy needs to be formulated on the extent to which rewards are market-driven rather than equitable or fair enough to retain the manpower. This policy will be influenced by the culture of the organization and the pressures on the business to obtain and keep high-quality staff. Any organizations that have to attract and retain staff who are much in demand and where market rates are therefore high may, to a degree, have to sacrifice their ideals of internal equity to the realism of the marketplace. They will provide ‘market pay’ and be ‘market-driven’.

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