Five Principles Of The Salary System

　　 Design salary To follow Five cardinal principles The principles of fairness, legal principles, efficiency priority, incentive limits, and demand.

　 First, the principle of fairness.

1. Internal equity

(1) employees work hard, make contributions, and achieve performance equal to the remuneration they receive.

(2) remuneration is equal to those who work equally within the company.

Employees' internal sense of fairness comes first from their own "investment" and "return" assessment, from time to time, they are accustomed to their current work efforts and return, compared with their own efforts in the past compared with the return. If the ratio of return / investment has increased in the past, it will create a sense of fairness, otherwise it will be dissatisfied.

In addition, employees will compare their own "reporting / input" ratios with those of the company's internal jobs, the same nature, or others who are different in their abilities, but if they are equal to others or higher than others, they will have a sense of fairness and satisfaction, otherwise they will not be satisfied.

In terms of internal fairness, employees often have an interesting phenomenon. They always think they pay more than other employees, but their income is lower than others.

2, external equity

Employees will have a sense of fairness when comparing their remuneration to other people or classmates or relatives in the same industry. The remuneration of enterprises must be ensured to be fair to the outside world, that is, the corresponding competitiveness. When a certain period of time, the wages of employees are higher than those of other companies in the same industry, employees will feel satisfied. Under such circumstances, enterprises are conducive to attracting and retaining excellent talents and gaining strong competitive advantages in human resources.

　 Two, abide by the principles of law

The remuneration policy must comply with the relevant laws and regulations formulated by the state and local governments. For example, the labor law and the minimum wage guarantee law promulgated by China are also stipulated in the Shenzhen Special Economic Zone, such as the labor contract Ordinance and the Labor Employment Ordinance.

In recent years, some enterprises have had many problems in labor employment, wage system and payment. On the one hand, they have damaged their labor rights and interests, and on the other hand, they have damaged the social image of enterprises. We often see in the media labor disputes due to arrears of wages, unreasonable wage structure, improper payment of wages, violation of minimum wage standards, or failure to pay social insurance in accordance with government regulations.

There is a private enterprise that produces furniture. The company has a good effect and most of its employees are foreign employees. The company has a policy of working on a Saturday every day, and there is no overtime pay on Saturday. Employees are not satisfied with the company's remuneration policy, and even some employees who have to leave the Office jointly inform the Government Labor Department of the company's violation of labor laws and regulations.

In fact, some adjustments can be made to the company's practices, such as lowering the wage standard, but calculating overtime wages for employees according to the legal requirements. This not only protects the legitimate rights and interests of employees, but also increases the operating costs. The problem lies in the fact that business managers do not understand the relevant laws or regulations, or do not attract enough attention, hurt the enthusiasm of employees, and businesses and individuals suffer undue losses.

　　 Three, the principle of efficiency first.

Enterprises want to spend the least money to produce the greatest benefit. However, in practice, many enterprises simply "simplify the purchase" because of the simplification of the problem. Employees will also "eat meat and curse" because of improper operation.

How to "spend money on the knife edge"? In the operation strategy, we must grasp the beauty of "just right". For example, the small welfare that is full of human feelings is a good example. It doesn't cost much money, emphasizes individuality and makes people feel good.

There are many ways to promote my company. If you celebrate your birthday for employees every month, the company leaders will host a simple reception to bring together the employees of the company's birthday this month, not only expressing the company's attention to their employees, but also a rare opportunity to communicate. A card and a bunch of flowers are not worth much money, but this kind of warm care will make employees feel the recognition and respect of them. Its actual effect is more effective than large bonus or other welfare. In addition, when the family members are sick, the company will order flowers for their families or hospitals. {page_break}

　 Four, incentive limit principle

Some of the most expensive companies will be bad at cost and without strategy. This will not only reduce the profit margins of enterprises, but also do not motivate employees.

A professional manager was hired by a headhunter company from a foreign company to serve as a general manager in a private company in Shenzhen. The company has special trust in him and fully empowers the control of others, wealth and property. The company was poorly managed and the personnel system was not perfect. The salary policy was basically the boss has the final say, there was no complete management system, and the lack of performance evaluation mechanism. After taking office, the general manager carried out a series of bold reforms, increased the wages of employees, purchased social insurance, and some backbone personnel also purchased commercial insurance. The company has provided a number of special benefits for employees, and staff morale has risen.

But not for a long time. In less than a year, the cost of human resources has increased significantly, the growth rate has exceeded 40%, while the operating performance has increased by only 10% during the same period. This means that although performance has increased and profits are declining, the business objectives of the board can not be achieved.

The general manager took immediate steps to reduce welfare and wage reduction accordingly. It can be imagined that employees feel frustrated and dissatisfied, and that talented people are in large numbers at the end of the year.

What's the problem? He violated the principle of incentive limits.

The growth of wages and benefits must be gradual and gradual, so that the incentive effect can be gradually increased. In addition, the wage increase should have a cycle to ensure the continuity of the remuneration policy.

Therefore, when designing a salary plan, there are usually several levels to be set up in the same post to ensure that employees have room for improvement in the same position. The new recruits design a probationary period of a certain period, in addition to needing time to understand the enterprises and understand their posts, it is more important to embody the incentive limits, so that employees can grow up and have a sense of identity after they enter the enterprise.

Another problem is that wages and benefits increase to predict the economic strength of enterprises, ensure that the company's normal profit cycle, and can not wait until the "green leaves" to adjust. In formulating the plan, two very important parameters can be provided to everyone, that is, the "two below" salary growth principle:

"The growth of total wages of employees is lower than that of the same period."

"The per capita wage growth of employees is lower than that of the same period."

　　 Five, adapting to the principle of demand

Masno divides people's needs into five levels. When formulating salary policy, we must set corresponding remuneration for employees in different periods and different types of employees. That is to say, we have to find out the demand points of employees, and then "prescribe the right medicine" to motivate the best results.

According to my 17 years experience in human resource management and consulting, I divide my employees into four groups:

Economic mutual aid staff;

Organizational attribution staff;

Emotional blending staff;

Ideal dedicated staff.

Whether you admit your own hierarchy or not, this positioning is objectively existing in the enterprise. What is the level of employees? This is related to their positions and the nature of their work, but more depends on their mentality and recognition of their business. Our research has put forward a view from one level, and needs to be further developed and tested in practice.

What are their characteristics and how to design the best compensation strategies to motivate them?

Economic mutual aid employees:

The typical characteristic is "how much money do you give, how much work he does" or "how much money do you give him?" For these employees, economic benefits are the main drivers, and economic leverage is the core of control. Usually it is the marketing personnel and business contractor of an enterprise, and the enterprise should adopt the commission system or commission system to design their remuneration. The biggest obstacle to these employees is that the enterprises have given the basic salary above the market, which is not conducive to mobilizing their enthusiasm, but also increases the cost burden for the enterprises. "There are always brave men under the heavy reward", and the high reward policy can lead them to develop themselves.

There is also a kind of employee who is engaged in front-line operation of an enterprise. Their workload is directly related to time input or output. The "time wage system" or "piecework wage system" is generally adopted to facilitate performance evaluation and ensure fairness.

For such employees, the growth of income can stimulate their enthusiasm greatly, and use economic means to confirm their contribution, which is very effective in salary design and management.

Organizational attribution staff:

In addition to economic interests, such employees also need a certain sense of belonging, hoping to get the recognition of the enterprise. They hope to take part in group activities and express their opportunities in activities. They hope that they are better able to live closer together with other members of the enterprise, so that they can easily communicate with each other and take care of each other. Most of the recruits, young employees, grass-roots managers, clerks, or secretaries are at this level.

The key to the compensation scheme is not the wages. Of course, there must be a basic salary as a guarantee, otherwise it may affect their loyalty. Core incentives should be focused on some basic benefits. Such as the provision of collective housing, account transfer and other measures.

Many enterprises, regardless of the staff level, are given housing subsidies as welfare, and the effect is not very satisfactory. The problem is that these employees are often not strong enough in the economic strength, and have a relatively short entry period and a strong sense of belonging. Just imagine that if the enterprise collectively rented out the housing subsidies and even less money (because the collective consumption can get preferential treatment, and the security is more secure), the effect will be totally different. These employees have high loyalty and low turnover rate. We have done many similar surveys, and employees at this level hope that the company will provide more protection and collective care.

Emotional blending employees:

Such employees want to be praised and respected by others. Social status and organizational appraisal are the two major issues they want to see. For example, the middle-level managers and technicians of the enterprises hope to become valuable professional managers. Personal value and growth are the core of their concern.

For these employees, salary is important, but more importantly, there are learning opportunities, which are valued in the enterprise and there is room for job promotion. Top executives should attach importance to communication with them. In terms of salary structure, they should design some special benefits that embody their identities, such as transportation subsidies or special vehicles, overseas visit opportunities and more training opportunities.

Ideal dedicated staff:

They are hardworking, tireless, have strong self motivation, and wish to take the initiative to carry out their work. These employees value their power and influence on others. Such as an enterprise's manager and senior manager.

The incentive for them is to "attract people with their careers". The vision of a company, the good corporate culture and the management environment are very important, and they are more effective by providing them with the environment of entrepreneurship or the opportunity to work independently.

Employees at this level can use the annual salary system, which reflects both high returns and risks, and encourages them to over fulfill their target tasks.

It can be seen that we can not use the "big and complete" method to formulate our remuneration policy monotonous. Instead, we should consider the difference between layers, and adopt flexible salary models to serve the goals of enterprises so as to gain recognition.