Week 1 A

Week 1 A

Strategic compensation is a component of the human resource system. Organizations must determine the importance of many factors when choosing compensation and benefits. Write a three-to-five page essay (not including the title and reference pages) that summarizes the impact and effect of compensation within an organization. Your paper should be written in a scholarly third-person tone; it should be in APA format. In addition to the introduction and conclusion, your paper should address the following:

  1. Examine how organizations determine the relative importance of compensable factors.
  2. Evaluate how compensation strategies tie into underlying corporate values.
  3. Analyze an example which demonstrates how an organization’s compensation and benefits programs have been utilized to obtain corporate strategic goals.

In addition to the text, cite at least two scholarly references to support your discussion.














Compensation system and strategy


Institution affiliation











The main goal of an organization’s compensation system is to bring into line the behavior of employees with business aims, motivate the workforce, and sustain a high drive. Money, man, machine, and money are the four Ms of business that contributes greatly to the success of the business. From the Ms, man is the most important in contributing to the competence and success of the organization. Therefore, things like absenteeism, drug abuse, and lateness or other undesirable behavior affect the effectiveness of the business. The organization, thus, sets targets that when the employee meet are given compensation (Martocchio, 2011). And since everyone loves being rewarded, the employees work hard, maintain a high drive, and display desirable behavior to receive the compensation. The other goals of the organization’s compensation system are to appeal to and retain employees and motivate personal growth.

A compensation strategy is based on using the company resources to enhance and promote a competitive advantage. It attracts, maintains, and grows skilled employees while bringing into line their behavior. It sets limits for both managers and employees. The costs of the company are put under control so that resources cannot be misused. Through this, employees can increase their job performance and business productivity. When productivity is increased, profitability is increased too. Thus, the compensation strategy can maintain and enhance competitive advantage. Most of the business strategies are based on increasing sales and maintaining a competitive advantage. Therefore, the compensation strategy works to support the organization’s business strategy.






Martocchio, J. J. (2011). Strategic compensation: A human resource management approach. Pearson Education India.

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