Answered Essay: Discuss the factors that influence internal pay structures. Based on your own experience, which ones

Discuss the factors that influence internal pay structures. Based on your own experience, which ones do you think are the most import? Why?

Expert Answer

Internal pay structures are defined by the number of levels of work, the pay differentials between each level and the criteria used to determine those levels and differentials. Factors that affect internal pay structures can be categorized as either external or organization factors.

External Factors includes:-

  • Economic pressures
  • Government policies, laws and regulations
  • Stakeholders
  • Cultures and customs

Organization factors include:

  • Technology
  • Human capital
  • HR policy
  • Employee

As per me “Government policies, laws and regulations” are most important factor that can influence the pay structure because:-

  • To make the pay scale of the employees

Many companies follows pay scales set by the government. If the government rules and regulations will change than the internal pay structure will also change for a company.

  • Change in basic pay

Every company have varieties or segments in which they make the payment structure. One of that is basic pay. If company change the rules for the same than every company will have to update the structure of the employees.

Incase any change is done by the government n their rules and regulations, than every company have to follow that they don’t have any option in that case.

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