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    Compensation Management

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    1. What is the relationship among money, labor cost, profitability and knowledge in the modern democratic capitalistic society? Compare and contrast this relationship with that of a socialized or communist society. How has this relationship impacted you personally? What suggestions or recommendations can you offer?

    2. Distinguish between monetary and in-kind payments. Describe the relationship between compensation and noncompensation subsystems of the reward system. Describe whether monetary and in-kind payments are sources of motivation? If they are not, defend your answer?

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    Solution Preview

    The response addresses the queries posted in 1453 words with references.

    // For this query, you are required to define a relationship between money, labor cost, profitability & knowledge. Additionally, you are asked to make a comparison of this relationship in socialized or communist society. I am providing you an idea and some suggestion on this relationship. Take a look over the following paragraphs, for an example: //

    In modern democratic capitalistic society, the labor cost, money, profitability and knowledge are related to each other. Knowledge is one of the most important factors for defining the labor cost and profitability. The product in this society is delivered effectively and efficiently as it was designed to offer by the companies to survive in a complex and competitive global economy. A performance based remuneration system is followed to promote effective delivery of essential goods and services. A step by step approach is provided by compensation management. The approach identifies job requirements, knowledge and skills of the employees and performance related incentives.

    All the individual employees of the organization, groups, teams, work units and organizations are linked by the above activities. The lifestyle of the workers and health of their families are protected by the different compensation programs. The total of the contributions by the organization corresponds to its labor cost. Jobs require higher skills and greater responsibilities. Large, fast growing and diversified companies generally pay higher remuneration to their executives than small and stagnant companies. Education is one of the most important factors, which is helpful for the growth and development of the company (Henderson).

    An organization has to be competitive enough to survive in this global economy. Labor cost is a key factor underlying the competitiveness of any organization. An organization not only needs to pay its labor a competitive wage in its geographic region but it also must reward the different people variedly according to the individual differences. The knowledge and skills employed by the employees to the workplace bring differences in the contributions made by the individuals. Differences are also shown in the interests, efforts and innovative qualities that the individuals provide in completing the task or the work assignments. The reward and the pay systems adopted by the organization to motivate ...

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