How to maximize salary efficiency in enterprises

Although salary is not the only way to motivate employees, nor the best way, it is a very important and easy-to-use method. The same total salary and different payment methods will achieve different results. Therefore, how to maximize salary efficiency is an art worthy of discussion.

In order to make the salary not only have the best incentive effect, but also benefit the stability of employees, it is necessary to add incentive function to the salary system and learn to use some skills in practical operation.

Strengthen the incentive factors in salary composition

From the perspective of motivating employees, salary in a broad sense can be divided into two categories: one is health care factors (or maintenance factors), such as wages, fixed allowances, social compulsory benefits, and unified welfare projects within the company. The other is incentive factors, such as bonuses, material rewards, shares, training and so on. If health care factors fail to meet employees' expectations, employees will feel unsafe, and morale will drop, brain drain will occur, and even people will not be recruited. On the other hand, although high salary and various welfare programs can attract employees to join and keep them, they are often regarded as deserved treatment by employees and difficult to motivate. What can really arouse the enthusiasm of employees is the incentive factor.

If the rigidity (i.e. invariance) of salary is taken as the abscissa and the difference (i.e. the degree of difference between different employees) as the ordinate, the composition of salary can be divided into four categories (four quadrants):

From the incentive point of view, the second quadrant has the strongest incentive effect, and the fourth quadrant has the weakest or even zero (the most rigid) incentive effect.

If employees in an organization are not enthusiastic about their work and are lazy, and want to increase their motivation, they can adopt a highly flexible salary model, that is, increase the proportion of the second quadrant (floating salary/bonus/commission) and reduce the rigid component. On the contrary, if it is a new company that is difficult to recruit because of its weak brand, it can adopt a high and stable salary model and increase the fixed components in the salary to make employees feel safe.

Design welfare projects suitable for employees' needs

A perfect welfare system is very important for attracting and retaining employees, and it is also an important symbol of the soundness of the company's human resources system. Well-designed welfare programs can not only bring convenience to employees, relieve worries and increase loyalty to the company, but also save personal income tax expenses and improve the company's social prestige.

According to government regulations, employees' personal welfare items can be divided into two categories. One is compulsory welfare, which enterprises must implement according to the standards set by the government, such as endowment insurance, unemployment insurance, medical insurance, work injury insurance, housing accumulation fund, etc. The other is the welfare items designed by the enterprise itself, such as personal accident insurance, medical insurance, family property insurance, travel, clothing, meal supplement or free working meal, health check-up, club membership fee, housing or house purchase support plan, bus supply or reimbursement of certain transportation expenses, special allowance, paid holidays, etc. Employees sometimes turn these benefits into income to compare whether the enterprise is materially attractive.

For enterprises, welfare is a huge expense (it can account for more than 30% of the total wages in foreign companies), but for employees, its incentive effect is not great, and some employees are even ungrateful. The best way is to adopt menu welfare, that is, according to the characteristics and specific needs of employees, list some welfare items and stipulate a certain total welfare value, so that employees can choose freely and get what they want. This method is different from the traditional unified welfare plan, which is flexible and very popular with employees.

Pay attention to the skills of salary payment

Different people should use different incentives. The famous Maslow's five-level demand theory shows that people's needs are hierarchical, and only when the low-level needs are met can the high-level needs be considered. As a guarantee to meet low-level needs, wages are still the last word for most people. Companies with low wages, no matter how good the corporate culture is, are hard to retain people. For high-level talents, the salary is higher, but if they lack training and development opportunities, they are still unattractive.

Combining cash compensation with non-cash compensation can sometimes achieve unexpected results. The former includes wages, allowances, bonuses and "red envelopes". And the latter includes all insurance and welfare items provided by the enterprise for employees, physical objects, tours organized by the company, recreation and sports, etc. Some companies provide special benefits for employees' families, such as inviting their families to parties, giving special gifts, allowing employees to travel with their families and giving gifts to their children. Make employees feel particularly "face-saving". Two concert tickets and a box of cosmetics presented by the supervisor often excite employees.

Appropriately shortening the time interval of regular rewards and keeping the timeliness of incentives will help to achieve the best incentive effect. Frequent small-scale rewards will be more effective than large-scale rewards. Reduce regular rewards and increase irregular rewards, so that employees have more unexpected surprises and enhance the incentive effect.

Select the reward payment method.

Payment methods usually include on-time payment, piece-rate payment and performance payment. The most lack of incentive is timely payment, which is only reflected in a period of time before and after the annual salary increase, and it is difficult to last. But it also has obvious advantages: stable income, giving employees a sense of security, which is conducive to retaining and recruiting; Convenient implementation; Labor costs are easy to predict; We won't neglect quality by emphasizing output. Piece-by-piece salary has an obvious incentive effect on employees, but it is only suitable for posts with easy-to-measure output and clear quality standards, which is difficult for knowledge-based white-collar workers. In the IT industry, the most commonly used method is the combination of on-time payment and performance payment. It needs to set specific work objectives (indicators) in advance, and at the end of the assessment period or after the completion of the project, calculate the floating salary or extract the commission according to the actual work performance evaluation results. Performance pay is determined by team performance and individual performance. For senior positions, corporate profits are often linked to salary as an important performance indicator. Because salary is linked to quantifiable performance, it is more incentive and fair. This method needs to be supported by a reasonable goal setting method and a good performance evaluation system.

For R&D personnel in high-tech companies, according to the law of project management, multiple milestones can be set according to several key stages in R&D projects, and those who complete the project according to the plan will be rewarded, not according to the working hours. In addition, part of the salary of R&D personnel is linked to the sales of products, which increases the chances of salary increase and makes the salary payment more sensitive to the performance of employees.

Pay attention to the reward for the team.

Although the incentive effect of rewarding teams is weaker than rewarding individuals, it is necessary to establish a team incentive plan in order to promote the cooperation among team members and prevent the unbalanced mentality of subordinates due to the excessive wage gap between superiors and subordinates. In some successful enterprises, the funds used to reward teams often account for a large proportion of employees' income. The assessment criteria and reward criteria for excellent teams should be clear in advance and guaranteed to be understood by team members. Specific reward distribution forms can be summarized into three categories. One is based on cost-saving rewards, such as scanlon plan, which multiplies the cost saved by employees by a certain proportion and rewards them to their teams. The other is a reward based on profit sharing, which can also be regarded as a way of paying dividends. The third category is to set a part of the total salary as a reward fund, and set assessment and selection criteria to reward according to the completion of team goals and the advocacy direction of corporate culture.

Make good use of stock reward forms

In high-tech industry, stock option is a very attractive word. Many employees, especially senior employees, think that the salary level is not the main attraction, and the most important thing is whether the "employee stock ownership" system is implemented. Not only those companies listed overseas have implemented stock options, but even non-listed companies are exploring different forms of employee stock ownership. For non-listed companies, due to the lack of clear provisions in the current domestic laws, there are no successful cases to learn from in realizing their rights and interests, and they often look around for fear of legal obstacles to listing on the GEM in the future. Many companies talk too much. However, with the increasingly clear listing rules of GEM in China, this issuance method will be applied to practice more and more.

Pay attention to skills when communicating salary to employees.

Some companies spend a lot of money on employees' wages and benefits, but employees are indifferent. As a supervisor, I suggest you make a detailed explanation of your welfare expenses so that employees can understand the price paid by the company for them. Tell employees about your distribution philosophy. If you are sure that the company's salary is competitive, in order to convince employees, you might as well make your salary survey results public, or even let employees participate in the design and promotion of the salary scheme. Even if the company has to reduce its salary because of temporary difficulties, as long as you are honest and fair, and at the same time show your advantages beyond salary as much as possible, I believe employees will understand and help each other.

There is a subtle game relationship between employees and supervisors in salary adjustment. Employees naturally hope that the higher the salary, the better, and as a boss, they hope to reduce labor costs as much as possible. How to control salary and motivate employees in the game? One way is to lower employees' expectations of salary targets first, such as keeping a low profile on the expected salary range and range of employees. When employees find that their actual salary increase exceeds expectations, they will feel satisfied.

Treat senior and key employees well.

In the case of limited salary, enterprises have to focus on retaining key employees and business backbones in order to develop. A famous American company adopts such a strategy in the annual salary adjustment after the performance decline: adopting the growth rate higher than the market average for senior employees, adopting the market average growth rate for middle-level employees and business backbones, and keeping the salary unchanged for ordinary employees. Their thinking is: 80% of the performance is completed by 20% of the elite, and a few backbones determine the development of the company. This method is particularly effective for some emerging high-tech companies or weak companies.

"Increase profits first or raise wages first?" This question is very similar to "which came first, the egg or the chicken?" I suggest that the boss choose "salary increase first" if his funds can support a profit cycle. With scientific performance management, the company will enter a virtuous circle of "high salary, high efficiency and high benefit", achieve first-class career with first-class talents, and the company and employees will have an accelerated development.