Question

Which of the following factors would not influence pay and compensation policies on an organisation? (a) The government (b) The organisation structure (c) The labour market and the union (d) The economy

Answer 1

The organisation structure is the correct option.

Explanation:

• The organisation structure would not influence pay and compensation policies on an organisation.
• This is because pay and compensation policies of an organisation has both internal and external factors influencing it.
• Some of the external factors are: Demand and Supply of Labor, Cost of Living, Economic Conditions, Prevailing Wage Level, Society, Government Control, Labor Unions, Legislation, Globalization, Cross Sector Mobility and Compensation Survey.
• Some of the internal factors affecting employee compensation are: Compensation Policy of the Organization, Employer’s Affordability, Worth of a Job, Employee’s Worth, The Organizational Ability to Pay, Job Analysis and Job Description and Employee Related Factors.
• Since organization structure is not a part of internal or external factors, it doesn't affect the compensation policies of an organization.