Julian XheloMGT307.905-11-14Pay is given to employees in exchange for work performed. Companies need to find a strategy that works for everyone. First, the company must afford to offer any type of compensation system before trying to pass such offers on to employees. Most companies base their compensation system on what their competitors pay and what type of compensation they offer. A company must be able to think about changes, be flexible and willing to prepare for them when necessary. External competitiveness is a part of the compensation system of organizations. If a company wants to compete with others in the business world today, its compensation plans should be planned similarly to other organizations, or if possible much better and strategic. A simple compensation system won't work in today's business because of all the competition that is out there. For a company to remain outwardly competitive, it must have a diverse workforce and offer different forms of compensation. Organizations will develop different strategic compensation policies based on their operation and other important variables. A well-structured compensation system could have a significant impact on the behavior, performance and effectiveness of employees in that company. Most compensation systems reflect the value of the company and how the company treats its employees. Employees look at the compensation system of any company and get a general idea about the company. A well-strategic compensation system will bring in the right kind of employees because it says a lot about the values ​​and practices of the organization. The company must demonstrate in its compensation system that it helps motivate employees by offering some sort of security, advancement opportunities, and… middle of paper… gs. A better pay rate leads to higher employee satisfaction. Compensation and benefits for many employees are recognized as an important part to consider when applying for or accepting jobs. Compensation and benefits are very important for both new employees and existing employees. The compensation system is the reason people look for work. A company with a good strategy that wants to compete externally is aware of how much other companies pay their employees. It will not be easy for any organization to exist for a long time if it does not have a strategy. Every organization is unique in its own way, but their goal is to have the best employees work for them. Change is expected: if organizations do not keep up with changes, they will not be able to be externally competitive. This will affect the long-term stability of the organization.