Performance pay design for modern enterprises Performance pay design for Evergrande Group

Abstract: In modern enterprise management, establishing a scientific performance management system and an effective salary incentive mechanism and continuously improving the core competitiveness of the enterprise are the core tasks of enterprise human resources management. The performance salary system can not only It can guide corporate strategies and drive employee behavior, fully develop human resources, retain outstanding talents for the company, and achieve the best results for the company and employees.

Keywords: Performance pay design

1. Salary and salary

1.1 Salary

Salary is the direct monetary and monetary payment that the organization must pay The labor cost paid in the form of indirect currency is also an important means to attract and retain outstanding talents. The salary system is the most important issue for an enterprise organization, and it is the most contradictory and difficult task in human resource management. Compensation includes both salary and benefits. It is not only the reward for the labor invested by employees in the organization, but also the cost expenditure of the organization. Compensation is an incentive.

1.2 Wages

1) Wages are divided into piece-rate wages and hourly wages according to the measurement form. Time wages measure the amount of wages based on employees' working hours, and are mainly divided into hourly wages, daily wages, weekly wages, and monthly wages. Our country mainly uses a monthly salary system, and currently there is an annual salary system, but the payment situation is still monthly. Piece rate wages are calculated based on a pre-specified piece rate unit price and based on the number of qualified products produced by employees or a certain amount of work completed.

2) Wages are divided into job wages, functional wages, and structural wages according to content. Job salary is a wage system that determines the salary level according to the employee's job level. Functional salary is a salary system that determines the salary level of employees based on their technical skills, physical strength, intelligence and other conditions. The structural wage system is a wage form that combines position wages and functional wages, and is mainly used in enterprises.

3) Wages and compensation

The gradual development of wages into compensation is changing with the gradual deepening of the concept of human resource management. Salary has a broader scope than wages. It designs employees' economic and non-economic rewards based on the theory of human needs, and at the same time creates economic benefits for enterprises to reasonably utilize labor costs. Salary is relatively fixed and is an important indicator for employees to measure returns and efforts. However, the salary-based salary system can no longer meet the needs of human resources management. It must be designed to match the corporate culture, corporate goals, etc., and be able to fully mobilize employees' work enthusiasm. Long-term and short-term compensation system with incentive mechanism.

1.3 Salary system

Although the composition of the salary system varies widely, the general salary system should include four basic components: basic salary, performance salary, allowance salary and insurance benefits. Basic salary is generally a fixed part of the salary system, determined based on factors such as employee position level, job title, job responsibilities, etc., and is the dominant part of the salary structure; performance pay is the most variable part of the salary system, and is determined based on the overall performance of the employee or team. Performance results are determined; allowances and remuneration refer to other allowances, subsidies, etc. designed by the enterprise for employees; employee benefits include insurance, economic benefits and public welfare benefits. Employee insurance includes compulsory insurance and non-compulsory insurance. Enterprises must establish compulsory insurance (pensions, medical funds, housing provident funds, unemployment benefits) for employees. Non-compulsory insurance includes enterprise annuities, personal accident insurance, etc. Employee public benefits mainly include public environment, housing, transportation, labor protection, vacations, etc.; employee economic benefits mainly include phone bills, meal charges, holiday shopping vouchers, transportation subsidies, etc. Companies attract employees not only with financial income, but also with employee benefits. Employee benefits are an important part of the compensation system and a measure to attract and retain talents.

2. Salary design principles

Salary design must follow the following principles:

Strategic principles. Strategic principles require that in the salary design process, on the one hand, we must always pay attention to the strategic needs of the enterprise and reflect the enterprise's strategy through salary design. On the other hand, we must transform the realization of the enterprise strategy into expectations and requirements for employees, and then transform the expectations for employees and requirements are transformed into salary incentives for employees, which are reflected in the company's salary design.

Fairness principle: The fairness principle of salary system design includes intrinsic fairness and extrinsic fairness.

Intrinsic fairness refers to a psychological feeling of employees within the company. After the company's salary system is formulated, employees within the company must recognize it and make them feel that their salary is fair compared with other employees within the company. External fairness means that compared with other companies in the same industry, especially those with competitive nature, the salary provided by the company is competitive. Only in this way can we ensure that we can recruit outstanding talents in the talent market and retain current employees. Some excellent staff.

Principle of competition: that is, salary design must be internally and externally competitive.

Incentive Principle: To truly solve the problem of inherent fairness, it is necessary to appropriately widen the income gap according to employees' abilities and contributions, so that those who contribute more can receive higher salaries to fully mobilize the enthusiasm of employees.

Economic principles: Salary design must follow economic principles, conduct labor cost accounting, and control labor costs within a reasonable range.

Legality principle: Salary design must comply with national laws and policies. This is the most basic requirement, especially the relevant national mandatory regulations, which enterprises cannot violate in salary design.

3. Salary design steps

3.1 Before carrying out salary design, job evaluation must first be conducted. According to its own characteristics and organizational structure, the enterprise establishes a job description after designing the position. By analyzing the job intensity, technical requirements, work responsibilities, environmental sanitation and other aspects, the enterprise determines the difficulty and importance of the position according to certain objective measurement standards. Comparability evaluations are made on the quality requirements of the personnel in charge and the job levels are determined.

3.2 When designing the salary system, the total salary should be budgeted first, and the total salary should be divided into sections. The division proportion should be determined according to the total salary of the position, that is, basic salary, performance salary, overtime, allowances, bonuses, etc. should occupy each position. Proportion of total compensation. The proportion of the variable part and the fixed part in the employee's monetary compensation is basically half. The fixed part of salary can give employees a sense of stability, while the variable part is motivating.

3.3 The relationship between salary levels is the most fundamental and important basis for salary design. The salary level is determined based on the characteristics of the enterprise, the organizational structure, and the position setting, and the salary level coefficient is determined to determine the job gap. Reflect labor differences based on job differences, refer to external labor market prices and internal fairness, establish the salary level of the job, and thereby determine the base of employee salary composition. Salary design must also be compatible with the company's performance system, that is, performance pay and position pay must be combined. Performance incentives are an important part of the salary system. The design of the salary system must consider the salary range in order to be motivating.

3.4 In the process of formulating and implementing the salary system, timely communication and necessary publicity or training are one of the factors that ensure the success of the salary reform. In essence, labor compensation is the result of a trade-off between human resource costs and employee needs. There is no absolutely fair salary method in the world, there is only a salary system that determines whether employees are satisfied or not. Therefore, during the implementation of the salary system, salary standards and salary structures must be constantly revised, which is a continuous improvement and dynamic management process.

4. Performance pay design

4.1 Changes in pay structure

The transition from skill pay as the main distribution form before the 1990s to position pay after the 1990s As the main form, equal pay for equal positions has been implemented, and the current performance pay or salary point salary system has experienced changes in the management system, gradually adapting to the needs of marketization, and continuously enhancing the competitiveness of enterprises. Skill wages are linked to the technical level of employees. Because they lasted for a long time, they gradually evolved into skill wages based on working years. This wage system severely limits young people's enthusiasm for work and study and is not conducive to the development of enterprises. After the 1990s, enterprises gradually implemented a wage form that focused on job wages and supplemented by skill wages, highlighting employees' job contributions. However, this form of salary was replaced after 2000, because equal pay for the same job does not reflect the differences in individual levels of employees, hinders the enthusiasm of young people, and does not meet the requirements of modern human resources management. Therefore, the new broadband salary has It is more humane, more scientific and reasonable. Driven by marketization, companies have tried out the point-based salary system and performance-based salary system. They have gradually matured through continuous exploration and have successfully applied performance management to corporate management, improving It improves the management level of enterprises and makes them more competitive in the market.