What is external capital?
external capital is the perception of employees of the structure and compensatory system of the company. In the company on the market, companies most often pay market rates to hire competent employees. Paying under the market rate results in negative external capital because individuals do not see value in business work. The level of compensation at the market rate attracts more potential employees, but there is no guarantee that these individuals are better than paid at market rate. Companies can assess their perceived external capital through review of internal and external factors of human resources. Demand curve-on the right angle graph-slides at the top left to right down. The power curve is the opposite and decreasing from the upper upper mine. The intersection of both rows refers to curpr balance, that is, the company can hire and compensate most employees at a particular level. However, this point may not actually fall where the company canthat to achieve maximum external capital.
The company may be difficult to determine its real external capital point. The biggest problem is that employees - and other individuals, such as potential employees - can hold a different opinion on the external capital of the company. For example, the company may assume that it is competitive in its compensatory plans based on current market instructions. However, employees may not believe that the amount of work for specific compensation is actually useful. Overcoming this abyss is one of the biggest problems with which society must solve to correct this perceived inequality.
The compensation plan often includes salaries or wages and a certain number of benefits. The salary or wage depends on the market rate paid to individuals at a standard rate. This rate can vary very much depending on how important the position for society is. Society, which pays lower wages in terms of market rate, can balance this compensation with better benefits. Bay packages that include insurance coverage, paid leave and pension account comparison may be for the company to increase its external capital.
The level of employee skills needed for a job may dictate appropriate compensation. Higher skills required from employees tend to increase compensation. External capital from employees may also be higher. Positions with lower qualifications apply lower compensation and can be viewed with lower external capital by external individuals.