Reference no: EM133181635
Salary benchmarking is one of the most effective ways of ensuring that your pay is competitive. Knowing that your pay is competitive means that you can respond to employee queries with confidence. However, salary benchmarking is also one of the least followed processes in HR.
A quick check of the recruitment websites will tell you what other people are paying for the same job title - but does that mean it is the same job? Is the finance manager of a small housing association doing the same job, and earning the same as the finance manager of a larger manufacturing company? What is the competition like for finance manager posts? What is happening in the economy that will affect our ability to recruit/retain these posts? Answering these questions for any post you are considering, will help you to identify what your pay issues might be...
Consider the following scenario:
Ken Butron, a supervisor with Xylo Co. Ltd. (a large manufacturing company), was contemplating taking a job offer with one of Xylo's competitors. Ken had been employed with Xylo for the past 10 years, but felt that, (since his promotion to Supervisor, two (2) years ago), his salary did not reflect his new role and the attendant responsibilities. Ken believed that if he accepted the job offer with Xylo's competitor he would receive the pay he deserved. Ken shared his dilemma with Paola Gomez (his Manager and Head of Department). After listening to Ken's concerns, Paola worried about the potential loss of Ken's talent and input and was convinced that Ken would leave Xylo Co. Ltd, if the pay-offer he received from the Xylo's competitor, could not be matched. However, Paola is also aware of the ongoing concerns of Xylo's executives to contain costs and does not believe that a request for an increased budget to match the pay-offer made to Ken would be approved by Xylo.
Case Source: Company Registration England and Wales.
In reference to the scenario presented in the incident above, discuss any two (2) solutions which Xylo Co. Ltd. can use to resolve the situation. Support your response with the contributions of any two (2) compensation related theories