Instructions: Answer discussion questions number one and two. Respond to two classmates’ answer for each question.

Question one:

Discuss the basic building blocks of developing a market competitive pay system, including the relationship between internal and external equity. Respond to at least two of your fellow students’ postings.

Respond to classmate 1:

Greetings to all,

Discuss the basic building blocks of developing a market competitive pay system, including the relationship between internal and external equity.

The basic building blocks of developing a market competitive pay system have four steps conducting strategic analyses, assessment of competitors pay practices with compensation surveys, integrating the internal job structure with external market pay rates and determining compensation policies.

· Conducting strategic analyses internal factors are fictional capabilities and financial condition and external market factors industry profile, competitor’s information and long-term growth prospect.

· Assessment of competitors’ pay practices with compensation surveys gathering data from the competitor’s wages, salaries and benefits to establish objectives for the pay system. This system will guide you on how the market is being run that you don’t under or over pay for any positons. All data collected will be used and enables compensation professional to obtain a realistic review of the competitor’s compensation practices. Thus, the objective for developing the pay system should also keep in line with the company’s goals and objectives.

· Integrate internal job structures wit external market pay rates this step will balance out any pay policies that will fit between managing cost and being able to attract and retain good employees.

· Compensation policies, the final step have 3 pay level market lead, market lag and market match:

· Market lead is where the company will compensate their employee higher than the market

· Market lag the company will compensate less than the market

· Market match the company will compensate equal as the market.

Human Resources department along with managers will gather date to create a market completive pay system. Based on what happened internally with compensation and benefits can be a huge effect externally. HR will have to current with the market to attract the right people for the job and be able to retrain them also.

Martocchio, J. J. (2011). Strategic Compensation: A Human Resource Approach 99th Ed.) Hoboken, NJ: Pearson Education, Inc. ISBN 978-0-13-432154-0. Retrieved from Ashford Edu. https://content.ashford.edu/books/Martocchio.7916.16.1/sections/ch07lev1sec1?search=building%20blocks%20#w76559please see instructions attached and read carefully before accepting bid.
Answers will need to be 200 words each responses will need to be 100 words each for a total of 600 words