Dominique has just been hired as the HR manager for a small but growing manufacturing company. Up until now, pay rates have been determined at the time of hire and are loosely based on "market" pay rates. Dominique has already noticed that some employees don't think the rates of pay are fair. Dominique has also noticed that employees in his organization don't really understand and aren't motivated by the performance management process his organization has designed for them.

Briefly, describe how can Dominique establish pay rates that are both externally and internally equitable? In your answer, indicate the issues that may arise if this is not done.

1. Advise Dominique about how to design a performance management process by briefly describing the five steps of the performance management process.