Employees compensation - Essay Example

Employees’ compensation Demographic regions are one of the key factors that determine an employee’s compensation. Countries across the world vary in their cost of living depending upon the socioeconomic and political conditions and natural resources. Data primarily required to determine the employees’ compensation is the cost of living which in turn is determined by factors that include but are not limited to the inflation indicators, averages of salary budgets, and the geographical location, goals, resources and needs of the organization.

Variation in the compensation due to difference of the demographic regions is one of the most fundamental reasons why employees leave the companies they have been working in for years and move into new companies. Different cities or states within the same country also differ in their compensation. For example, an employee gets different salaries for the same nature of job and the same scope of work in two different states of US. The salary of managers in Arizona established by the University of Phoenix is anywhere between $50000 and $84600, whereas in California, the salary band for managers is from $54500 and $89600 (Apollo Group, 2012).

A lot of employees get the minimal pay in the US and deployment at some distant country brings an increase in salary. This is because of the difference in political stability between the two places. Circumstances are usually quite stable in the US, so there are a lot of candidates for a particular job opportunity whereas not many people are willing to work in countries like Iraq and Afghanistan because of the potential risks involved. There are threats to life in such countries where war is going on.

Thus, companies have to increase the salary so as to motivate the employees to work there. Such a pay is referred to as “hazard pay”. Natural resources play a very important role in determining the compensation in a region. In the year 2008, 60 per cent of the crops in Haiti were destroyed by four hurricanes along with the loss of 800 lives and hundreds of people deprived of the basic necessities of life (Carroll, 2008). The US had the resources to recover the loss and bring the condition in Haiti back to normal but this may not be quite as easy to achieve for countries that rely upon external resources to meet the needs of their people.

When natural disasters of such type happen, salaries in those countries overall see a decline. The price of property is another very strong predictor of the compensation at a place. Rates of property at certain places are much higher than those at other places. Employees working in areas with high prices of property incur a lot of cost to live in the same place. The mortgage payment becomes a significant expense to accommodate which, companies offer higher salaries. Concluding, demographic regions tremendously affect employees’ compensation.

The data required to determine the compensation of employees includes the socioeconomic and political conditions of the area, availability of natural resources, inflation indicators, cost of living and price of property. References: Apollo Group. (2012). Compensation [Multimedia]. Retrieved from Apollo Group, Resource Webster. Carroll, R. (2008, Nov. 8). We are going to disappear one day. Retrieved from http://www.guardian.co.uk/world/2008/nov/08/haiti-hurricanes.