Comp. & benefits | Business & Finance homework help
A business strategy will affect the internal alignment policies and techniques of its Total Compensation system in several ways. Firstly, different strategies may require different types of compensation structures to ensure that employees are incentivized to meet the goals of the organization. For example, a company pursuing an aggressive growth strategy may need to implement short-term performance incentives rather than more traditional long-term pay increases. Secondly, different strategies may require different levels of spending on total compensation packages. A cost-cutting strategy for instance might call for lower salary increases or frozen wages in order to control overhead expenses going forward. Finally, changes in strategies could also necessitate changes in other aspects of the total compensation system such as benefits offerings or incentive plans designed to reward specific behaviors or outcomes.
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