Remuneration Strategy for STAR Industries

Running head: STAR INDUSTRIES
STAR INDUSTRIES
Name of Student
Name of University
Author’s Note

1STAR INDUSTRIES
Answer 1
Aims of a remuneration strategy for the organization includes ensuring the fact the
practices are aligned with the strategy of the organization, in order to solve new problems
various ne benefits and comp programs are designed. This is usually good for the purpose of
addressing issues but it might not be able to consider the integration along with various
current programs or the alignment with the STAR industries’ strategy of philosophy (Noe,
Hollenbeck & Gerhart, 2017). One more aim includes ensuring the programs support their
objectives, with time various organizational objectives might change and benefits and
compensations program might not support the newly introduced objectives. Hence numerous
consequences that are unintended from the plans of remuneration might arise. Such as a plan
for bonus which would emphasize the top line revenue might generate a huge amount of sales
but might encourage the deep discounting which leads to a poor performance of bottom line.
One more aim includes preparing for expansion or growth, as STAR industries prepare
moving to various new markets, considering the practices that are competitive in these
markets would help the organization in attracting as well as retaining talent. It would also
help in establishing various sustainable costs related to the competitors.
Answer 2
Five external factors that I need to consider during the development of a remuneration
strategy are as follows
1. Labour market: the demand as well as supply of labour results in influencing the
employee compensation. The low wages is provided in case the demand is less
compared to the actual supply of the labour. High wages is provided if the demand is
comparatively more than the actual supply of the labour.

2STAR INDUSTRIES
2. Going rate: the remuneration is usually decided based on the rate which has been
prevailing in the field.
3. Cost of living: the cost of the living index tends to influence the remuneration of
employees in such a way that with the increase or decrease in the aspect of price level
as well as the consumer price index, the salary varied accordingly.
4. Labour unions: various powerful labour unions result in influencing the plan of
remuneration of the organization (Noe, Hollenbeck & Gerhart, 2017). The labour
unions are formed when the demand is more and the supply of labour is less or have
been involved in dangerous work and hence asks for more money for the purpose of
endangering their lives.
5. Labour laws: there are various laws that have been passed by the Government for the
purpose of safeguarding various workers from the exploitation of the employers.
Five external factors that I need to consider during the development of a remuneration
strategy are as follows
1. Ability to pay: large companies have the ability to pay more compensations as
compared to the competing organizations, small companies can afford to keep up their
pay scale to the level of the competing organization.
2. Job evaluation as well as performance appraisal: it helps in having satisfactory
differential pays for various jobs (Bratton & Gold, 2017). Performance appraisal helps
employees to earn more on the basis of their performance.
3. Employee: the employee or a particular worker influences the compensation in terms
of performance, experience and potential.
4. Business strategy: the strategy influences compensation of employees. If the
organization wants to proceed smoothly, and manage workers, it would provide less
pay or equal to the pay provided by other organizations.