Human Resource Management: Competitive Pay in Canada Essay Examination

This essay examines the concept of competitive pay in Canada, analyzing it from the perspective of various stakeholders. It begins by defining competitive pay and its significance, noting that many Canadian companies use it to attract and retain skilled employees. The essay identifies key stakeholders, including employees, the corporation (Costco Canada is used as an example), the government, and competitors, and explores their respective interests and the reasons behind them. It highlights the advantages of competitive pay, such as increased employee motivation and productivity, while also acknowledging potential disadvantages like increased costs and the potential for neglecting organizational culture. The analysis then delves into the conflicts of values that arise among stakeholders, such as the tension between employee monetary rewards and company operating expenses. The essay concludes by advocating for a performance-related pay (PRP) system to balance stakeholder interests, drawing on motivation theories to support its position. The essay also suggests incorporating Herzberg and Taylor’s theory of motivation to increase monetary incentive norms for employees, as a means of increasing employee productivity and satisfaction.

Running Head: COMPETITIVE PAY IN CANADA
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Human Resource Management
Competitive Pay in Canada
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Human resource management is the procedure of recruiting, selecting, providing
training and compensating the employees of the organization. It is estimated that there are
various issues which is faced by the organization (Zou, Zeng, Lin, & Xie, 2015). Therefore,
the purpose of present essay is to understand the contemporary issues in Compensation from
the viewpoint of stakeholders. In this essay “competitive pay in Canada” is selected. This
topic is selected because the estimation describes that in Canada 50% of the companies adopt
the strategy of competitive pay for retaining and recruiting the skilled and competent
employees in the organization. The essay discusses the interest of key stakeholders and
summarizes them together to identify conflicting values. The relevancy of the values,
stakeholders and evidence are also analysed. Further, the competitive pay in Canada is
discussed.
Competitive pay is considered the approach or the main component of the
organization to attract competent employees. It is because the organization offers salaries
which are quite higher and more than that of industry standards and from other same
organization which are in the same area or region. There are various companies in Canada
such as Costco Canada which provides competitive pay to the employees because of hiring
the well-qualified and professional employees in the particular area (Flammer, 2015).
Therefore, retaining the existing employees is also the main objective of competitive pay.
Competitive pay provides various benefits to the organization in Canada that is
through competitive pay company hires well-qualified employees which raise the
productivity of the organization. In the year 2018, the profits of Costco Canada were $20,689,
which is higher than previous year because of providing efficient services to the consumers
(Lippel & Walters, 2019). In Canada competitive pay also helps in increasing the motivation
of the employees. However, the sometimes also faced from several disadvantages such as it
become costly for the companies that is Royal Bank of Canada also provides competitive pay
through which the expenditure of the company increases. The other disadvantage is that
companies while competing for the pay sometimes do not follow the proper culture in the
organization. Further the key stakeholders of Canadian organization are discussed by taking
the example of Costco Canada.
The key stakeholders of Costco Canadian include employees which are the internal
stakeholder and play a major role in overall functioning of the organization. It is because it
implements the policies and strategies to get efficient results (Chan, Nair, & Rhomberg,

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2019). The other stakeholders are corporation itself it is due to the reason that it is influenced
by change in policies and strategies. The governments and competitors are also the key
stakeholders of Canadian organization that is Costco Canada leads government as the
stakeholders which gets more taxes because of more profits of the organization. The last is
the competitors which are also impacted through strategies and framework of other
corporation (KCarino , 2015). Therefore, this government and competitor are the external
stakeholders gets benefited and influenced in indirect manner. It is also describes that in
Costco Canada these stakeholders play major role in affecting the profitability of the
organization in long run. Further the interest and reasons of that interest for major
stakeholders are discussed by using Costco Canada example.
The competitive pay increases the motivation and satisfaction of the employees in the
organization, therefore it creates positive outlook towards the job they perform in the
organization (Abadi, 2019). The reason for this is because competitive pay increase the
efficiency of the employee to work in more productive manner that is in the year 2019 the
sales of Costco Canada increased and revenue of the organization goes up to $21.37 billion
(Zou, Zeng, Lin, & Xie, 2015). The other reason for more motivation is that because through
this employees feel more secure in the job.
The other stakeholder is corporation that is the interest of Costco Canada is to
increase the productivity and quality of services to satisfy the customers of the organization.
The interest of company is to recruit less and specialized employees in the organization
(Chan, Nair, & Rhomberg, 2019). The reason of this interest is to expend less cost as well as
time in providing training to the new workers and utilize those resources in increasing the
efficiency of the services and product so that loyalty among the consumers will be increased.
The competitors are also the external stakeholders of Canadian organization it is
because the competitors gets impacted in both positive and negative manner due to changes
in the strategies, policies of the organization. The interest of the competitors in Canada is also
focuses on identifying the culture, policies and structure followed by the organization in
similar industry and maintains their structure according to the requirements (Half, 2019). For
example it is estimated that the reason of following these interest by competitors is because
of maintaining the organizational standards in that manner so that it can it can gain the
competitive advantage in Canada.

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The role and interest of the government is that it increases the tax revenue of the
government. It is because the government can also increase their profits due to getting
competitive pay in majority of the government organization in Canada. For example in
Canada the revenue of the government also raises due to getting more taxes. The reason of
focusing on competitive pay in Canada is because governments gets more benefits and earn
more profits in the particular period. Therefore, it is estimated that due to more competitive
pay in the year the tax revenue of government in Canada is raise up to $20.1 billion (Zou,
Zeng, Lin, & Xie, 2015)
In relation to the issue of competitive pay in Canada the company taken as an
example is Costco relating to its both internal and external stakeholders such as employees,
corporation, government and competitors. The conflict of values between these stakeholders
due to this issue arises as companies invest in giving strong salaries to employees for
delivering healthy returns but generates operating expense as well. As stakeholders and the
company both are affected by each other while making decisions related to the salary levels
as it helps in retaining and attracting skilled individuals (Half, 2019). The stakeholders are
differentiated concerning the issue of competitive pay where employees are rewarded by the
monetary value increment and feel a sort of security and work more efficiently. In
corporation, conflict arises in relation to the interest is high competition to hire qualified and
talented employees where they provide higher pay.
Meanwhile, competitors play a passive role for fulfilling their interests due to which
the conflict of taking actions, making policies and decisions is dependent. Lastly, government
helps in increasing the efficiency and productivity of employees with extra pay to generate
profits and tax revenues which last at conflict. Here is a discussion on the stakeholders of
Costco taken as an example where the company gives its top most priority to the employees.
In Canada, Costco’s employees and corporation are its primary stakeholders having financial
position in the company no matter even if they invested money in the business growth or not.
The company’s decisions affect the income of the employees. Further, government and
competitors are the secondary stakeholders not or indirectly affected by the decisions of the
company (KCarino , 2015).
Costco introduces various CSR (corporate social responsibility) programs for
addressing the interests of its stakeholders successfully. It is essential to make sure about the
company and stakeholders that are affected significantly (Buckley, Pass, & Prescott, 2016).

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Hence, the CSR shows the concerns of the stakeholders for leading success to long-term
beneficial effect such as stronger brand image. There are adding up of new programs and
policies considered by the company for improving its performance related to sustainability
and supply chain. Moreover, investment in CSR makes every stakeholder ending up with
better off but not always avoid the trade-offs within their interests. Though, stakeholders with
higher orientation on pay benefits easily let go from some materialistic benefits added within
the company. Trade-offs involves the environment as well but somehow CSR compensate
that for stakeholders (Bridoux, Stofberg, & Den Hartog, 2015). Apart from this, the prime
goal of the stakeholder is lies with their portfolio management. Thus, the company should
force on the cash inflow in the company through their profitable strategies. By incorporating
the higher profit percentage, the stakeholder will able to attain the higher dividend income.
This will keep up the interest of the stakeholder in the effective and efficient way.
The final position shows that the issue of competitive pay defines the relevant values
of hiring, attracting and retaining skilled and talented employees by motivating and boosting
their working efficiency through higher pay. It is every stakeholder’s prior interest consisting
of employees, corporation, government and competitors in the companies of Canada to stay
competitive as shown in the company taken as an example Costco (Greenspan, 2017). It is
possible to prevent the issue of competitive pay by providing the solution of PRP
(performance related pay) showing the compromise between the desires of the stakeholders
with the improvement in terms and conditions. Thus, the higher pay will be given to
employees only when there is increase in profitability and dividend pay-out enlightening
value maximisation and requisite trade-offs. Apart from this, the associated company can
incorporate the Herzberg and Taylor’s theory of motivation. This hypothesis defines that
monetary motivation is the biggest source for motivating the employees. According to this
hypothesis, when an organization will offer better performance-linked incentive then the
employee will conduct better operations and it will enhance their productivity. Thus, it is
better if an organization appreciate their workforce through effective monetary and non-
monetary norms.
The evidence in relation to CSR trade-offs are essential to understand in the case of
employees reactions considering activities. Further, it is crucial to identify the motive in
relation to individual difference for future in the company. Every stakeholder involves
reaction of other stakeholders in trade-off as they are important impacting others attracted to
the company. In this essay, Herzberg and Taylor’s theories of motivation is suggested. As per

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this hypothesis, an organization should increase the monetary incentive norms of the
employees so that employee can stay motivated and produce effective and efficient quality
work.

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References
Abadi, F. (2019). The Influence of Employee Competence, Employee Commitment and
Compensation to the Employee Performance. In 5th Annual International Conference
on Management Research (AICMaR 2018).
Bridoux, F., Stofberg, N., & Den Hartog, D. (2015). Stakeholders' Responses to CSR
Tradeoffs: When Other-Orientation and Trust Trump Material Self-Interest. Frontiers
in psychology, 6.
Buckley, P., Pass, C., & Prescott, K. (2016). Canada-UK Bilateral Trade and Investment
Relations. New York: Springer.
Chan, J., Nair, M., & Rhomberg, C. (2019). Precarization and Labor Resistance: Canada.
Critical Sociology, 45(4), 469-483.
Flammer, C. (2015). Does product market competition foster corporate social responsibility?
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Greenspan, R. (2017, February 6). Costco Wholesale’s Stakeholders: A CSR Analysis.
Retrieved from Panmore: http://panmore.com/costco-wholesale-stakeholders-csr-
analysis
Half, R. (2019, April 9). The high cost of low salaries: why paying a competitive salary is
important. Retrieved from Robert Half:
https://www.roberthalf.com.au/blog/employers/high-cost-low-salaries-why-paying-
competitive-salary-important
KCarino . (2015, April 29). COSTCO Consumer, Stakeholder & Strategic Target Audience.
Retrieved from Carino Brooks Brown:
http://carinobrooksbrown.blogspot.com/2015/04/costco-consumer-stakeholder-
strategic.html
Lippel, K., & Walters, D. (2019). Regulating health and safety and workers’ compensation in
Canada for the workforce. A Journal of Environmental and Occupational Health
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Zou, H. L., Zeng, S. X., Lin, H., & Xie, X. M. (2015). Top executives’ compensation,
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Decision, 53(9), 2036-2059.