Week 3, Assignment 1: Discussion Assignment

While
setting its pay policy, an organization must know what other organizations pay
their employees. This knowledge enables an organization to maintain a
competitive edge and develop strategies to motivate and retain its employees.
External competitiveness addresses how an organization sets its compensation
levels relative to that of its competitors. The organizations with which your
organization competes for a particular skill or service are considered the relevant
market. For example, when pricing job Y for accountants, you would consider
what other organizations pay for a similar job. The relevant market for job Y
would be the set of organizations you consider in setting the pay for the
job.

Organizations
use wage surveys as a tool to set policies on external competitiveness. There
are a variety of surveys available for purchase as well as free of charge, and
an organization may utilize multiple wage surveys.

• Write a 1-2 page report describing the relevant market for Lowe’s Home
  Improvement Center as it attempts to set pay rates in your local
  community. Based on your experience and reading this week, would the pay
  rates at the local convenience store, supermarket, bank, Wal-Mart, Home
  Depot, or any other store at the mall be part of the relevant
  marketfor Lowe’s as it seeks to set pay levels? Why or why not?




• Does your answer differ when
  you consider other positions at Lowe’s, including cashiers, customer
  service representatives, the accountant working at Lowe’s regional office,
  or the corporate vice-president for marketing? What factors should
  be considered when setting these pay levels?




• Next, consider wage and salary
  surveys. What information is important in assessing the value of a
  survey? How do you judge survey reliability? How should an
  organization determine how much weight to give any survey? Discuss
  how wage surveys provide information needed to recruit, motivate, and
  retain qualified employees.

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