The Pay Model and Pay Strategy is key to understanding how to design a compensation system that can help an organization achieve success and sustain competitive advantage. How people are paid affects their behaviors at work. Critical in compensation design is thoughtful strategic alignment.

• Describe the objectives of the pay model. Give an example of each.
• How do the objectives set the standards to judge success?
• Explain why one company can have different pay objectives for different business units.
• Define the four (4) policy choices in the pay model. How do the policies create guidelines to manage pay? Give examples of each.