Required information 6. Setting up a Pay Structure Setting Up a Pay Structure From the employer's viewpoint, pay is a powerful tool for furthering an organization's strategic goals, Pay has a large impact on employee attitudes and behaviors, and it influences the kind of employees who are attracted to (and remain with the organization, Pay can be a powerful tool for aligning current employees' interests with those of the broader organization In this exercise, please read the mini-case and answer the questions that follow. Tom Werner owns Werner Marketing Services (WMS), a small marketing firm that specializes in working with health care clients, including hospitals and physician groups. He has just signed a lucrative agreement to market the services of the local health care system and needs to recruit and hire several key employees in the next six weeks. Not only does Werner need to hire administrative and sales staff, but he also has to hire professionals with experience in regulatory issues, health care insurance and reimbursement, and medical records. Until now, the pay structure at his company has been Informal because most of his employees were colleagues he brought on board from his previous position as communications director at the local outpatient clinic. Now that he has to expand his company rapidly and address how to pay the new hires, Werner has asked you to set up a pay structure for the company. Save a When designing a pay structure, Tom should keep in mind that all of the following are benefits of developing a pay structure within an organization except Multiple Choice standardizing treatment of employees with similar jobs makes compensation operations more manageable, 32 attaching pay structure to specific Jobs makes compensation less equitable expanding businesses require more and more HR decisions, so pay structure is key pay policies are often attached to particular Jobs, rather than to individual employees makes administration of compensation decisions easier What are the two important competitive market challenges WMS will face when deciding what to pay its employees? Multiple Choice competence and formal training product market competition and labor market competition labor and education geographic and skill level profit margins and taxes Upa Pay Structure Saved According to efficiency wage theory, what should WMS do when determining what to pay its employees? Multiple Choice WMS should emphasize centralized decision making WMS should offer an above-market pay rate to ensure its employees have the incentive to put forth maximum effort WMS should pay its employees at market rate or below since it is hiring several employees at once. WMS should keep wages low to encourage higher productivity None of these choices are correct I LA NE 2 3 s 4 5 6 7 8 9 W E R T U S D F G . . In order to be competitive in his industry, Tom may want to compare his company's pay structure to those of its competition. This is called Multiple Choice gainsharing benchmarking crowdsourcing trendspotting marketization