6 Principles Of Salary Design

Salary design is the premise and important part of establishing modern salary management system.

It is one of the core contents of enterprise human resource management, which is related to the management and long-term development of enterprises.

Salary design is the concrete embodiment of individual labor value. Reasonable salary design can fully arouse people's enthusiasm for work, stimulate their ability to play, make them feel satisfied and honor, and further promote the development of enterprises.

Principles of salary design

Enterprises must follow certain principles when designing remuneration. These principles include strategic orientation, economy, embody employee value, incentive effect, relative fairness and external competitiveness.

One

The principle of strategic orientation emphasizes that the design of remuneration must be analyzed from the perspective of enterprise strategy, and the remuneration policies and systems formulated must reflect the requirements of enterprise development strategy.

The salary of the enterprise is not only a kind of system, but also a mechanism. The reasonable salary system drives and encourages the growth and improvement of the factors which are beneficial to the development strategy of the enterprise. At the same time, the factors which are not conducive to the development strategy of the enterprise are effectively contained, retreated and eliminated.

Therefore, when designing remuneration, enterprises must analyze what factors are important and what factors are not important from a strategic point of view, and give certain weights to these factors through a certain value standard, and determine their value distribution, that is, the salary standard.

2. economic principles

The economic principle of compensation design emphasizes that enterprises must fully consider the characteristics of their own development and the ability to pay when designing remuneration.

It includes two aspects. In the short run, the sales revenue of a company should be able to pay the salaries of all the employees after deducting the costs and costs of non labor (human resources). In the long run, enterprises should have a surplus after paying the salaries of all the employees and compensating the inhuman labor costs and costs, so as to support enterprises to increase investment and obtain sustainable development of enterprises.

3. embodiment

Modern human resources management must solve the three basic contradictions of enterprises, namely the contradiction between human resources management and enterprise development strategy, the contradiction between enterprise development and employee development, and the contradiction between employee creation and employee benefits.

Therefore, when designing remuneration, enterprises must fully embody the value of employees, coordinate the development of employees and the development of enterprises, and maintain the short-term and long-term balance between the creation of employees and the treatment of employees (value creation and value distribution).

4. incentive principle

When the enterprise designs the salary, it is also 100 thousand yuan. Different departments, different markets and different stages of enterprise development pay different employees, one way is to send 40 thousand yuan salary and 60 thousand yuan bonus, the other way is to send 60 thousand yuan salary and 40 thousand yuan bonus, the incentive effect is completely different.

The principle of motivation is to emphasize that when designing compensation, enterprises must give full consideration to the incentive effect of salary, that is, the incentive effect of salary.

This involves the proportional algebraic relationship between the enterprise salary (human resources input) and the incentive effect (output). When designing the compensation strategy, the enterprises should consider various factors fully, so as to maximize the incentive effect of the payment.

Five

The principle of internal consistency is the application of Smith's equity theory in salary design. It emphasizes that when designing remuneration, an enterprise should have "one bowl of water level".

The principle of internal consistency includes several aspects.

One is horizontal equity, that is, the salary standard and scale of all employees should be the same. The two is vertical equity, that is, when enterprises design remuneration, they must take into account the continuity of history. An employee's input-output ratio in the past and now and even in the future should be basically one, and it should also be increased.

This involves a wage rigidity problem, that is, the wage level of an enterprise to employees can only be bullish under normal circumstances, and it can not be bearish, otherwise it will cause great dissatisfaction among employees. Finally, it is external equity, that is, the remuneration design of enterprises is consistent with similar talents in the same industry.

6. external competitive principles

The principle of external competition has been mentioned before. It emphasizes that when designing remuneration, enterprises must take into consideration the salary level of the same industry's salary market and the salary level of their competitors, so as to ensure that the remuneration level of the enterprises has certain competitiveness in the market, and fully attract and retain the strategic and key talents needed for the development of enterprises.