The purpose of this assignment is to choose a compensation philosophy that is appropriate for AMAZON and articulate a rationale for this selection.
There are two aspects to this assignment. First, describe the risks and benefits with leading, meeting, and lagging the
market in overall compensation and benefits. Next, choose the appropriate strategy (lead, meet, or lag) for your firm, and provide rationale about why this is appropriate.
There is a minimum requirement of 500 words for the compensation purpose and strategy document.
Consider some of the following factors in your assignment:
- Payroll expenses are usually the highest expense at most firms. If you lead the market, this expense can be taxing.
- If you are pursuing top talent in human capital rich industries (e.g., software engineering), lagging the market may keep you from competing for market share against your competitors.
- If you meet the market, paying average will generally not attract top talent, and in addition, you will not have the labor-cost savings of a lag-the-market strategy.