(i) Employee
Numerous employees related factors also influence his or her compensation.
They include experience, performance, superiority and potential.
(ii) Ability to pay
A firm, which is prosperous and successful, has the ability to pay more than the competitive rate.
This way it can attract a superior caliber of personnel.
Often the labour unions also demand an increase in compensation on the grounds that the organisation is prosperous and is able to pay more.
(iii) Organisation's strategy
The organisation's strategy regarding wages also influences employee compensation. For example, an organisation, which wants rapid growth, will set higher wages than competitors. On the other hand, organisations that want smooth going and just maintain the current earning will pay average or below average.
(iv) Job evaluation
Job evaluation establishes a consistent and systematic relationship among base compensation rates for all jobs. In other words, it establishes the satisfactory wage differentials.
(v) Job requirements
Wages are also influenced by the requirements of a job such as physical and mental requirement. Jobs, which demand more skill, responsibility, efforts and are of hazardous in nature, will carry high wage tag with them.
maurice.mutuku answered the question on April 15, 2019 at 11:35
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