How much is a job worth? What is the appropriate salary to give to your employees for you and them to be satisfied?
We all know that the salary is not the main motivator, but an adequate salary is important for employee satisfaction and productivity. A well-defined salary system clearly portrays the internal and market value of each job position and gives a way to efficiently manage the human resource and work efficiency. We believe that defining goals in the salary system makes a key difference in the quality and employee satisfaction regarding their salaries.
What are the benefits of a well-defined pay system for you company and your employees?
- Regulating obligations regarding the labor laws
- Planning and realizing promotions
- Basis for a reward system
- Ensuring internal justness and clarity regarding salaries.
- Managing the salary and reward budget
- The possibility of comparison with the market salaries
- Managing profitability of human resources
- Coordinating strategies with business goals
What are the steps in building a salary system?
STEP 1.: DIFING THE SALARY STRATEGY
For starters it is important to define strategic salary system goals because every organization differs in:
- What it wants to value and award in terms of progress, bonuses, raises, promotions and keeping valuable positions and talents
- How flexible they want their salary system to be
- The target minimum/maximum salary
- The communication strategies and transparency levels
- Dealing with deviations that may appear when transitioning to a new system
STEP 2.: DETERMINING PAY GRADES
Based on the conducted evaluation of job positions – internally or through the JOB FORMULA TOOL – and a defined salary strategy, we group jobs into pay grades.
The number and type of pay grades depends on the size of the organization, the level of job complexity and the defined salary strategy.
STEP 3.: ADJUSTMENT WITH THE MARKET VALUES
This step is optional and necessary only when you wish to adjust your salaries with market values in your branch and/or for specific jobs, shortage occupations etc. It includes the comparison and adjustment of salaries with market values according to salary research studies you obtain.
STEP 4: BUILDING A TRANSFORMATION MATRIX
In this step we build what is called a transformation matrix that includes joining and assigning employees to new job positions and salaries and then comparing that with the current situation.
The important thing is to determine is there something weighing down the budget and are there employees that fall below the minimum or above the maximum salary lines and to then make a plan for implementing solutions to those potential deviations.
What do we offer?
- Help in defining the salary strategy
- Making the salary system for all job positions based on the salary strategy and job position evaluations
- Help with/and creating the evaluations and job complexity structures as bases for defining pay grades
- Comparison of salaries with the market values in accordance with a pay research study you opt for and obtain
- Preparation and help in creating the transformation matrix of job positions and employees into a new salary system
- Help in creating labor-legal documents that regulate the salary system
- Revision of the job position descriptions with the purpose of adjusting with the new salary system strategy
Interested in learning more?
Contact us for a meeting and presentation: email@example.com