Should cost be the most important factor when making choices about pay structure?

Melissa Jackson
According to Noe et al. (2018), “An organization cannot make spending decisions independent of the economy. Organizations must keep costs low enough that they can sell their products profitably, yet they must be able to attract workers in a competitive labor market. Decisions about how to respond to the economic forces of product markets and labor markets limit an organization’s choices about pay structure”.

What are your thoughts? Should cost be the most important factor when making choices about pay structure? Why or why not?

Reference

Noe, R.A., Hollenbeck, J.R., Gerhart, B. & Wright, P.M. (2018). Human Resource Management: Gaining a Competitive Advantage (11th ed.). New York, NY: McGraw-Hill.

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