Running Head: Compensation Plan for Microsoft

Determine the most beneficial ratio of internally consistent and market consistent
compensations systems for Microsoft

Compensation Plan for Microsoft

Microsoft Corporation based in Washington, initiated by Bill Gates and Paul Allen is
engaged in evolving, engineering, permitting, supporting and servicing her consumers in
computer software and electronics.
Compensation System
A system developed or designed to determine amount of pay to employees rewarding
their contribution to production is called compensation system. To fascinate and preserve
high quality employees compensation and benefits play a key role. Employment
relationship is directly knotted with employees commitment and motivation when we
talk about compensational aspects. Considerable economic and social compensation and
benefits are provided by the great employers to the workforce. In general money is given
to the employees against their work to support their fiscal needs in shape of reward, or the
work done payment.
Achieving Internal Consistency
Every employee of the firm must believe that he has been paid according to his worth to
accomplish internal consistency. In other words payrolls developed by the company
should reflect the overall importance of each job contributing in the success of the
company. To be internally consistent for payrolls, the company should evaluate the worth
of the job completely that is assessed by a systematic process called job evaluation. In
common the evaluation is based on conversant decisions regarding things like skills
needed to perform a job, Difficulty of the job and the responsibilities perceived by
employees.

Compensation Plan for Microsoft

The decisions regarding job evaluation must be accurate and fair,

considering about the payrolls received by the employees are affluent. A
committee to make evaluations can be developed to serve various
organizational areas collectively including managers, VPs and HR
professionals.
Achieving Market Consistency
The company can enjoy the market consistency or competitiveness if the employees
of the company are considering that they are getting in relation to their counterparts in
market. The company must have the knowledge about what other employers are paying to
make decisions regarding how much they want to be competitive. After that the payrolls
must be established consistently with the decision.
A salary survey comprising on information regarding offerings of the
companys competitors can be conducted. These kinds of surveys can be
conducted by the company itself or outsourced. Once the payroll patterns
of other companies have been identified, the company can determine its
competitiveness. Specifically, it should develop policies in the well-being
of employees relative to the market. The determination of payroll policies
is a crucial step. Problems regarding recruitment and turnover can be
faced setting up too low rates and problems regarding budgets. Layoffs or
pay freezes can be faced in contrast.