Discussion on the pay model.

Your assignment is to prepare and submit a paper on the pay model. Compare your ideas with someone with more experience, someone from another country, someone from another field of study.

The Compensation is something that is paid to cover the opportunity cost. For example, if an employee makes commitment to work for the organization for the next five years it means he is ready to sacrifice his five years for one organization. These five years could be spent somewhere else in less time consuming and less hectic job. Therefore, the company must pay him the reasonable amount that can cover his cost of losing other jobs. The Most convincing definition from an employee’s perspective is the return. The return to employee covers both the entitlement, as well as, reward.

The person who is more experienced has different perceptions regarding the definition of compensation. The compensation may be defined as risk of loss, whereas for a fresh employee the appetite for risk is high (Coppleman, 2004).

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Most of the developed countries may not need to think about the basic needs to cover in the compensation package but in developing countries, employee’s perception for the compensation may be totally different. the fulfillment of the basic needs may also be incorporated in the compensation package (Coppleman, 2004).

Different fields require different level of compensation packages from the companies. For example, if the job requires frequent travelling, so the compensation may cover traveling, as well as, accommodation expenses, whereas if the job is totally desk based the compensation may be salary along with other perks (Coppleman, 2004).


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