Internal Pay Structure Internal pay structure influences by three important factors in deciding compensation strategy for an organization which is external factors, organizational factors and strategic choices in designing internal pay structure.

External factors involved economic pressures, government, policies, laws, and regulation, stakeholders, cultures and customs. Economic pressures shapes the internal structures due to marginal productivity of labor, whereby laying down the demand and supply of labor based on the productivity of the company and other factors remain constant. Therefore, compensation strategy should be based on marginal productivity of the company. Besides, government, policies, laws, and regulation has to be complied as well, for practice of fair employment such as Employment and Labor Law of Malaysia and other Civil Rights Act. Besides, both external and internal stakeholders such as labor union and shareholders suggestion and opinion should be considered in order to determine internal pay structures. Moreover, culture and customs playing an important role in shaping internal pay structures for a company since common mentality may judge what size pay differential is fair.

Besides, organizational factors such as organization strategy, work design, organizational human capital, overall human resource policies, employee acceptance and cost implication are also shaping the internal pay structure of a company. An adaptable pay structure is required that tolerate with organizations strategy. Besides, technologies influences the work design of an organization and knowledge, skills, abilities and other characteristics (KSAO) required to complete the job. Thus, technology will influence the pay structure as additional skills and abilities will require completing the job. Besides, temporary work supplier and delivering will also give impact to the work design and thus influence the pay structure. Other than that, organizations human capital constitutes KSAOs, including education and experience. The greater the value added by KSAO, the higher the pay will be. Next, overall HR policies include tie pay to promotion as frequent promotion offer sense of career progress. Besides, employee acceptance in judging the fairness of pay by comparison with other has been influences the pay structure as well. The employee judge either the pay structure has procedural and distributive justice. Moreover, the cost implication might influence the pay structure as it is change in response to external factors.

Question

1. Read the above passage and rewrite it with your own English