Pay systems translate the strategy into practice in order to achieve certain objectives. The basic objectives are efficiency, fairness, compliance with laws and regulations and satisfaction of the employees.
1.Efficiency consists of:a.Improving performance, increasing quality, delighting customers and stockholders.
When the organization improves the performance she will get the benefit from the employees, which will affect the organization's strategy and will lead to the competitive advantages among other competitors and will achieve the upward momentum, and continuous improvement (virtuous circle).
And by improving the performance the employees will get more compensation controlling labour costs. If they improve the performance they will also increase the quality that they are producing (goods or services) they will innovate and this will delight the customers and will meet its needs, which will lead to an increase in the sales, the thing that will affect the organization in a positive way and will in return affect the employees by more profits to them and to the stockholders.
b. controlling labour costs:1.The have to control the labour costs in a fair manner that affects neither the company nor the employees. They have to find the balance. What the employee performs should be more than what he gets.
2.Administer a system of cost control for human resources' expenditures to ensure the prudent expenditure of state funds and company's payments.
2. Fairness:It is a fundamental objective of the pay system. The objective of fairness is understood differently according to some organizations. Some see fairness as "ensure fair treatment" and "be open and understandable" others acknowledge the definition of fairness is difficult, but they believe it is helpful to question the relative fairness of alternative courses of action in a routine way. They see fairness isn't that everyone gets treated equally, but treated...