How are wages and salaries set and how do they vary by organization?
Wages and salaries are set according to a unique blend of external market competitiveness and internal equity considerations at each employer, Brennan says. Every organization has its own way of paying people and many variables, such as organization revenue size, number of employees, profitability, pre-established pay history, corporate culture, geographic location, competitive labor analysis, benefits and perks, and ease of commute, all play a factor.* “Every enterprise has to compete in an open market for human talent. They all have to pay enough to attract, retain and motivate competent workers,” Brennan says. “Those who pay too low fail to attract or retain decent workers and must either raise their entry salary or do without new hires. Those who pay too high will have long lines of applicants for every opening, but they better be much more profitable or more efficient than their competition or they may spend themselves out of business. “Despite the basic truth that everyone pays a
