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External competition compares to programs and rewards programs offered by competitors in the same labor market. External competitiveness is important because when two objectives are in conflict a company or any entity will need to give precedence to external competitiveness and will end up giving a positive response which is flexible and proactive to the conditions that are available in the market as a whole.
External competitiveness indicates the contributions that are made by each and every individual. Policies on external competitiveness include the services that are given to the outsiders. These are amount of money spent on workers family. This services range from insurance and health facilities. Internal alignment policies deal only with the services offered to individuals in the company and those that pertain to the outsiders are usually not considered.
Factors that shape an organizations external competitiveness include performance, flexibility and open communication
The marginal revenue product is the total change of income that will be earned when one unit of labor has been included. This is usually a model that determines the number of workers to employ under some conditions at a certain wage rate. These usually have to do with pay because the marginal revenue product of any individual that is employed in an organization equals the labor concerned and the revenue. This then dictates the number of workers to be employed in consideration to the rates each worker receives.
Relevant market is figuring out how and how much to pay for a certain product and that help provide the significant competition constrains on the given product within a certain region of interest. Products price is determined by several factors such as the occupation skill of the people in the given area, knowledge on the product, the geographic nature of the region, buyer’s willingness to relocate, commute, or become virtual employees, other related competitors in the market offering similar products.