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Solution
A PESTEL analysis is a framework used to analyse the macro-environmental factors that may have an impact on an organisation as evidenced by CIPD (2023a). PESTEL stands for Political, Economic, Social, Technological, Environmental and Legal.
Political factors:
Recent legislation on equal pay could impact GA Pensions’ reward strategy. The Equality Act of 2010 reinforced the need for equal pay for equal work regardless of gender (Supervisor & Malla, 2018). This means GA Pensions needs to ensure pay levels are objectively justified and there are no unexplained gender pay gaps. This could increase pay transparency and lead to adjustments in some roles to align with market rates.
Economic factors:
Fluctuations in the economy may influence reward decisions. During economic growth, organisations may have more flexibility to offer higher pay raises and bonuses to attract and retain talent (Tatenda & Moment, 2014).). In a recession, budgets are tighter so rewards may be limited to core benefits with a focus on non-monetary recognition. GA Pensions will need strategic reward packages that are sustainable through different economic cycles.
Social factors:
Changing social and family dynamics impact the reward environment as evidenced by Tomlin et al (2017). Younger generations increasingly value flexible working to balance career and personal life. Offering flexibility allows GA Pensions to attract and engage younger employees by catering to this social trend. It helps portray the company as family-friendly and modern in its employment practices. However, flexibility must be applied judiciously to avoid accusations of favoritism. a holistic consideration of the political, economic and social landscape through a PESTEL lens can help GA Pensions design reward strategies that are socially responsible, compliant with legal requirements, and responsive to macro-trends, thus strengthening their employer value proposition over the long run.
Evaluate the most appropriate ways in which benchmarking data can be gathered and measured to develop insight. (AC 2.2)
Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section.Word count: Approximately 400 words
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