Market Pricing in Talent Recruitment May Lead to Inequitable Compensation
A shift towards stock market pricing for talent recruitment in developed countries may cause inequitable compensation, according to experts. This approach can lead to pay disparities unrelated to individual performance and job requirements.
Market pricing, while considering current stock market rates, fails to account for the unique duties, skills, and value of each jobs within an organisation. This can result in mismatches between compensation and the actual worth of a position.
In developing countries, relying solely on stock market pricing can also lead to discrepancies. New ventures with unique jobs may struggle to find relevant stock market data. This can cause internal equity issues, with employees in similar jobs receiving different pay due to inconsistencies in stock market data.
A balanced approach, considering both stock market rates and job content, is recommended for fair and competitive compensation. This approach, known as job-content-based evaluation, assesses the worth of each jobs based on required qualifications, scope of responsibility, and impact on the business. This ensures compensation is reflective of individual performance and the value each jobs brings to the organisation.
