Title: Factors Affecting Employee Compensation
Headings: Factors Affecting Employee Compensation
Factors Affecting Employee Compensation
External and Internal Factors Affecting Employee Compensation
Factors Affecting Employee Compensation – External and Internal Determinants of Compensation
I. External Determinants of Compensation:
II. Internal Determinants of Compensation:
Factors Affecting Employee Compensation – 8 Important Factors: Supply and Demand for Employee Skills, Company’s Business Strategy, Job’s Worth and a Few Other Factors
Factor # 1. Supply and Demand for Employee Skills:
Factor # 2. Company’s Business Strategy:
Factor # 3. Job’s Worth:
Factor # 4. Labour Unions:
Factor # 5. Ability to Pay:
Factor # 6. Productivity:
Factor # 7. Cost of Living:
Factor # 8. Government Regulation:
Factors Affecting Employee Compensation – Demand & Supply of Labour, Capacity to Pay, Cost of Living, Productivity of Workers, Trade Unions, Wage Laws & Wage Rates
(i) Demand for and Supply of Labour:
(ii) Capacity to Pay:
(iii) Cost of Living:
(iv) Productivity of Workers:
(v) Trade Unions:
(vi) Wage Laws:
(vii) Prevailing Wage Rates:
Factors Affecting Employee Compensation – Internal and External Factor Influencing the Compensation Package Payable to Employees
1. External Factors:
2. Internal Factors:
Factors Affecting Employee Compensation – 13 Major Factors Affecting: Demand & Supply of Labour, Ability of Organisation to Pay, Prevailing Wage Rate and a Few Others
Factor # 1. Demand and Supply of Labour:
Factor # 2. Ability of Organisation to Pay:
Factor # 3. Prevailing Wage Rate:
Factor # 4. Cost of Living:
Factor # 5. Living Wage:
Factor # 6. Bargaining Power:
Factor # 7. Job Requirements:
Factor # 8. Productivity:
Factor # 9. Legal Requirements:
Factor # 10. Attitude of Managers:
Factor # 11. Labour Unions:
Factor # 12. Organisational Policies:
Factor # 13. Employee Related:

Content: they devote their time, energy, skills, knowledge to the organisation. In consideration of this devotion, employer gives compensation to employees. The compensation awarded to the employee is dependent on the volume of effort exerted, the nature of job and his skill. Besides, there are several other internal and external factors affecting the compensation. ADVERTISEMENTS: The factors affecting employee compensation can be categorized into:-
1. Internal Factors and 2. External Factors. Some of the external factors affecting employee compensation are: 1.