How long does it take to design the salary system scheme?

How to formulate a competitive salary system

A competitive salary system is what every enterprise pursues. In order to develop a competitive salary system, we must think clearly about two questions: first, what is the symbol of a competitive salary system? Second, how to design a competitive salary system. I will talk about these two questions.

1, two curves, three strategies and five influencing factors

Let's first look at a basic thing, the market wage rate curve and the income policy curve. (see the picture below)

After the salary survey, we will get a curve-the market wage rate curve, which is based on the market and reflects the corresponding relationship between the market wage level and the post. There is also an income policy curve, which is the curve actually paid by enterprises. There are three different relationships between the income policy curve and the market wage rate curve: (1) The income policy curve is higher than the market wage rate curve, which represents the dominant strategy of wage payment. (2) The market wage rate curve overlaps with the income policy curve, which represents the matching strategy of salary payment-matching strategy. (3) The income policy curve is lower than the market wage rate curve, which represents the lagging strategy of salary payment-lagging strategy.

To develop a competitive salary system, the first question to be answered is what kind of salary payment strategy should enterprises adopt, which is leading, matching or lagging behind? Which strategy should be adopted depends on the following five questions:

(1) enterprise competitive strategy. According to Porter's theory, there are three competitive strategies: concentration strategy, differentiation strategy and low-cost strategy. The corresponding salary payment policies under three different competitive strategies are different. Under the low-cost strategy, the matching or lagging salary payment strategy is generally adopted, and the salary will not be too high; Under the focus strategy, the salary of key talents is relatively high, and the salary of general personnel is relatively low; Under the differentiation strategy, the wages of brand builders and marketers are relatively high, while the wages of other personnel are not high. Therefore, what kind of salary payment strategy an enterprise adopts depends on its competitive strategy first.

(2) the development stage of the enterprise. The research of human resource strategy is divided into two stages: matching stage and resource-based view. In the matching stage, there is a famous saying that "human resources have two matches", vertical matching and horizontal matching. Vertical matching refers to the matching of strategy, organization and human resources; Horizontal matching refers to the matching between all human resources departments. The salary payment strategy should match the development stage of the enterprise, which is a branch of vertical matching in theory. The development stages of enterprises are divided into germination stage, growth stage, maturity stage and aging stage. According to the salary handbook of the United States, in the embryonic stage, the basic salary is generally low, the bonus is competitive, the welfare and allowance are relatively low, and the long-term incentive is higher on the books, while China enterprises are just the opposite. When the enterprise was just budding, the average employee didn't believe it. But in the United States, Amazon has just begun to promise options. I have read a book called The Secret of Microsoft, which tells how Microsoft succeeded. This is written by a professor. In this book, there is a saying about how Microsoft recruits people. When Bill Gates recruited people, the criteria were: first, he was a workaholic; second, he didn't charge too much, and he was willing to pay a lower salary. This thing is not easy to do, and the third is to innovate. You see, the combination of the first and the second can't recruit people, but Microsoft has recruited many excellent people. Finally, I use a concept to express this phenomenon, which is called "recruitment confidence", that is, every enterprise can find a group of people with the same values as him. In the growth period, at this stage of rapid growth of enterprises, everything is competition. It is compa & gt 1compa, and its full name is comp-ratio, which means that the average salary of the company is divided by the average salary of the market. There are many types, such as comp-ratio of position and comp-ratio of age group, which is an average value to test the competitive relationship between our salary level and market level. The market wage rate curve is lower than the income policy curve. The basic salary in mature period is high, because the enterprise is relatively stable, the short-term bonus is relatively high, and the long-term bonus, welfare and allowance are competitive. The difference between competitiveness and high, my understanding is that high should be far higher than competitiveness, with a large proportion. During the aging period, the basic salary, welfare and allowance are high, while the bonus and long-term incentive are low. At this stage, employees are reluctant to accept bonuses. Whether he is right or not, I want to make it clear that the salary payment strategy depends on the development stage and must match it.

(3) the enterprise's ability to pay. The ability to pay depends on two aspects: one is the positioning of capital, and the other is the level of profitability. Generally speaking, every enterprise should leave room, and only enterprises with strong ability to pay will consider using high salary level.

(4) the competitive state of the labor market. When a certain type of personnel is very tight in the labor market, they must be absorbed with higher wages. When the supply exceeds demand in the labor market, enterprises can use lower wages, just as college graduates are more troublesome now. Many years ago, I said what Americans said. Is it worth going to college? It costs a lot of money to go to college, but you can't find a job when you come out. Finally, from the perspective of human capital investment, the return rate of university education is temporarily low. Now this problem has arisen in China. The salary level of college students is declining, so the matching salary strategy or lagging salary strategy is adopted for this kind of people at most.

(5) the enterprise's salary payment concept. From the development history of the west, the concept of salary payment is two of the most important: high salary leads to high efficiency. Marshall said that the most expensive labor force is the cheapest. First, you paid a high price and absorbed the best labor. Second, you pay a higher price and get a higher return, which is the cheapest. Another idea is low salary and high efficiency. Through low cost and good management, high efficiency can be produced in the end. Harvard University has an article: Ten Cultures about Bonuses, which talks about this concept. If I am an enterprise, I believe in the first concept, high salary will have high efficiency. But different people will have different opinions.

These are the influencing factors of the five major compensation strategies.

2. Measurement of the competitiveness of the salary system

There are three ways to evaluate the competitiveness of the salary system:

(1) Salary ratio index. This indicator can be used for many types, such as position type and age type. We can look at this indicator from many angles, which is the most important indicator to measure the competitiveness of salary.

(2) Wage growth rate. Compared with competitors, the current salary growth rate in the United States is about 3%, and that in China is 10%. If this data is correct, China's salary system is competitive in terms of salary growth rate, regardless of other conditions. In China, which industries are experiencing rapid wage growth? Which industries have slower salary growth? You will know what kind of industry salary level is competitive. I read mercer's report. The fastest growing industries are finance and consulting.

(3) Ability to absorb, retain and motivate employees. Tell you this again, we can understand the salary problem from many angles. One of the most classic angles is the three functions of salary: absorbing, retaining and motivating employees.

3. How to design a competitive salary system?

Let's look at how to develop the competitiveness of the salary system. According to the author of Salary Manual, he thinks that to design a competitive salary system, five questions must be clarified: (1) Who are our competitors? (2) What does the company do, that is, its business characteristics. (3) In order to attract and retain key talents, what kind of salary practices are adopted. (4) Key competitive points are related to competitive strategies. (5) Where and where to compete. Here are some ideas that need to be explained:

(1) positioning of enterprise competitors. There are two kinds of competitors, one is direct business competitors, which is not difficult to understand, and the other is competitors of the same kind of labor. For example, some labor forces are universal, and good secretaries and accountants can be secretaries and accountants not only in the communication industry, but also in other industries. This is called a general talent, so we should understand the considerations of the mass market. From the perspective of talent supply, let me talk a little about the talent supply in China. First of all, I want to say that the talent competition in China is different from that in the United States. In the past two decades, a very important feature of China's labor supply is structural shortage, that is, centralized supply and structural shortage. Besides, centralized supply. You are also reported by the school. Such is the shortage of talents in China in the past 20 years. At first, there was a shortage of talents. Some industries are desperately short of talents, such as lawyers and accountants. Therefore, the major of legal accounting is popular, and then after a few years, the MBA is in short supply. We rushed to the end, but now there is a shortage of human resources. But just like the supply of products, there will be a surplus of this major in a few years. Human resources are ok. What is different from other majors is Matthew effect. You have been working for two or four years since graduation, and you can provide information. If you want to recruit human resources, it is best to go to our college. I haven't done any research. If I want to do research, I can study where the competitive advantage of the Institute of Labor and Personnel comes from. A very important point is the high employment rate of graduates. On the one hand, it is related to education and brand. We started earlier, and another important reason is the smooth employment channels.

(2) Clarify the business characteristics of the enterprise. When considering salary competitiveness, we should consider the business characteristics of the enterprise. My impression is that everyone who designs the salary system should know what our business characteristics are, and the salary design based on business characteristics will be more targeted. The business characteristics of communication industry are different from those of textile industry. When designing the salary system, it is not competitive if the communication industry is designed as the salary of the textile industry. The salary system of communication industry pays more attention to ability and high-tech personnel. The textile industry emphasizes popular employees. For example, if you go to a contemporary mall, the salary system design of the contemporary mall is very different from that of a software company. Contemporary shopping malls emphasize the enthusiasm of salespeople for customers, and customer satisfaction is caused by the satisfaction of salespeople. Therefore, the incentive focus of stores is the incentive of front-line sales staff.

(3) In order to attract and retain key talents, what kind of salary practices are adopted. What technology can enterprises use to attract and retain key talents best? Many compensation practices, such as long-term incentives, supplemented by short-term incentives; Equity-based incentives, supplemented by monetary incentives. These are called salary practices. An enterprise has different ways to attract and retain talents, and each enterprise should adopt a salary method that matches its own enterprise situation.

(4) Determining the key competitive points is related to the competitive strategy. If you want to ensure the competitiveness of the salary system, you must find out which key departments have created your advantages. In fact, it has something to do with the strategy and nature of the enterprise. For example, shops, you see that the department where they create advantages is the direct sales department, but if we want to talk about strategy, the important thing to do in the next three to five years is to build chain stores, so the planning and implementation department is very important. The salary system must support key departments and key talents who create advantages. When consulting companies do projects, they often talk about strategic departments and strategic employees, which means they get more money. It makes more sense to say so. If employees are divided into three grades, employees disagree, but if they are divided according to the importance of departments, they can make it clear.

(5) Clear the competition area. Explain clearly which field you are competing in. The earliest salary survey written by Americans is about following the 3S principle, which refers to the same region, the same industry and the same scale. However, under the condition of globalization, enterprises in the same region have been greatly challenged. The original enterprises were mainly regional enterprises, but the region has changed after globalization. For example, many high-tech enterprises in China should consider the situation of American competitors. I encountered this situation when I was working on a project in Wuhan. Wuhan Fiberhome Technology also has a company called Guangxun Technology, which ranks among the top five in the world in terms of technology. But then I made a big mistake when I did the salary survey. Taking similar enterprises in Wuhan as the object of investigation, I come to the conclusion that the salary is much higher than the market level, but the turnover rate is very high. The reason is that its competitors are not only enterprises in Wuhan, but also Huawei in Shenzhen. In fact, under the conditions of globalization, the same region has been greatly expanded. There is a book called "The World is Flat", which tells that after the emergence of the Internet, you can do business anywhere. Technical means have greatly changed the geographical scope of the competition, or subverted the traditional regional concept.

To sum up, how to formulate a competitive salary system should consider three issues: first, two curves, three strategies and five influencing factors; Second, three standards to measure the competitiveness of the salary system; The third is how to design a competitive salary system. There are five factors to consider in the salary manual. Among these five factors, I appreciate three: one is to determine good competitors, the other is to have different salary systems in different industries, and the third is to determine the competitiveness of the salary system according to the competitive strategy of enterprises.