Optimal Compensation: Rebalancing Pay
SCMS Journal of Indian Management. Vol. 9, No. 2, pp. 31-42, April - June 2012
13 Pages Posted: 6 Jul 2012 Last revised: 11 Jul 2012
Abstract
A number of researchers have examined organizations progress through various stages in a life cycle as they grow and develop from birth to death. This article explains organizational life cycle (OLC), its impact on organization performance, and response of human resources (HR) manager for effective compensation management with specific reference to Indian Small and Medium Enterprises (SMEs). SMEs have distinct stages of OLC i.e. introduction, growth, maturity and decline. Organization's characteristics, response and resource requirements are quite different in each stage of OLC. Rebalancing fixed and variable pay in compensation structure according to different stages of OLC will help organizations in designing optimal compensation strategy for building competitive advantage.
Keywords: Compensation Management, Fixed Pay, Variable Pay, SMEs, Organizational Life Cycle
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