How pay affects organizational design?

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How pay affects organizational design

The relationship between the structure of an organization and the pay system is something you should very carefully attend to and be sure that they're aligned. It's not always obvious what the right fit is because people tend not to think about pay systems relative to the structure and design of the organization. So let me just say a minute about organization structure, and then talk about how the right pay system can support a particular organization design. When I talk about organization design, I'm thinking of things all the way from what work is like. Is it individuals basically operating alone? Is it people working in teams or groups to accomplish something, to service a customer, to build a product? Or is it perhaps even the company that has multiple divisions that are unrelated in very different businesses, like a General Electric or a megacorporation that has global reach, different operating models in different countries? All those have to be taken into account when you're designing the pay system.


Source: https://www.linkedin.com/learning/human-resources-pay-strategy/how-pay-affects-organizational-design