Question

Directions: Imagine that you've just taken a job as the sole HR director for a start-up that is planning to do major hiring in the next few months. The CEO asks you whether he should focus more on internal consistency or market competitiveness with his compensation strategy for these positions. Prepare a position paper for him to explain both types of compensation systems and how each one will affect competitiveness. Which one do you believe is MOST important for a company's competitive advantage?

Answer 1

The Honourable Chief Executive Officer
Internal consistency and market competitiveness are two essential elements of compensations. Both these types are useful to plan for a major HR initiative and impactful on competitiveness. The development of internal consistency helps an organization to improve its service quality to counter competitiveness. Consistency signifies consistency in service delivery, consistency in maintaining a relationship with target customers and consistency in managing organizational culture. On the other hand, market competitiveness ensures an organization to maintain a competitive advantage by ensuring top quality services.
Both these types of compensation skim are effective to manage organizational competitiveness. It is important to counter the constant competitive growth of the target market. Thus, market competitiveness strategy and internal consistency strategy are efficient compensation skims to counter these skim.
Out of these two compensation policies, the internal consistency should be the best to manage a highly competitive market. Inter consistency ensures the development of all internal operational activities including human resource management, accounting management, sales operations, and marketing plans. Apart from that, it ensures constant improvement of service quality and top quality supply chain management. These features are capable to attain competitive advantage in the target market. Thus, I suggest the internal consistency strategy.