Two-sided contradiction of incentive compensation

The duality of incentive salary means that the positive and negative effects of salary on employee motivation are difficult to reconcile. Incentive compensation has two sides: 1. The calculation mode of incentive pay and the risk of choosing distribution ratio.

When an organization formulates an incentive compensation scheme, it will inevitably face the problem of whether it is based on a certain proportion of wages or a fixed cash model. If the former is adopted, people with high basic salary will get more rewards, such as 10% bonus distribution scheme, managers with income of 10,000 yuan can get10,000 yuan, while employees with income of only 20,000 yuan can only get 2,000 yuan. As the rich get richer, a large number of low-income employees complain constantly. If the latter is adopted, employees with low basic salary will get a larger salary increase, such as 5,000 yuan per person, 25% for employees with an income of only 20,000 yuan, and 5% for managers with an income of 1 10,000 yuan, which will cause strong dissatisfaction among managers. Obviously, choosing either way means risk.

2. The risk of incentive compensation system and scheme itself.

Law 82 tells us that 20% of employees in an organization have created 80% of performance, and the reward system to encourage salary is usually designed according to this principle. Therefore, people can find that those 20% people can always get bonuses again and again. But for these people who often win awards, incentive pay may not always work, because incentive pay is only effective for those who need it. For the vast majority of people who don't get rewards, it will repeatedly dampen their enthusiasm. This shows that the design defects of incentive compensation system destroy the internal incentive mechanism.

1. the gap between ideal and reality, and the goal of scheme formulation and implementation is misplaced.

Incentive compensation is efficiency and result-oriented. But in fact, while emphasizing efficiency, we only regard time as a reward standard; While paying attention to results, reward according to qualifications; While encouraging employees to work hard, they hire executives with salaries dozens of times higher than those of ordinary employees. Many times, there is nothing wrong with the plan, but it is not well executed, which leads to a serious deviation between the implementation result and the planned goal. When implementing the incentive compensation scheme, we often face the following risks:

(1) How to select candidates? Many times, the company's selection process lacks democracy and openness, employees don't know much about the selection criteria, and some organizations also use secret rewards, which loses the significance of salary incentives.

(2) Incentive compensation lacks the principles of fairness and appropriateness, and the contrast between reward and benefit is too small.

(3) Lack of internal stability leads to the credibility crisis in the implementation of salary incentives. Employees often encounter situations where rewards cannot be cashed. This instability means that although they have the opportunity to get more rewards, they also face the risk that the rewards will not be cashed.

2. Too much respect for individual heroism is not conducive to the integration and management of the team.

Edwards Deming, the father of modern quality management, believes that the reasons that affect the efficiency of enterprises can be divided into general reasons and individual reasons, whether enterprises are profitable or losing money. The result is more related to common reasons. Excessive reward for individuals will make incentive pay appear very casual, and excessive reward for individuals by organizations will dampen the enthusiasm of others. Cause "pink eye" among employees. If this kind of reward exists in the team, it will lead to disharmony among team members, which is not conducive to the integration and management of the team, and even lead to team division in serious cases.

The principle of balance should be embodied. Scholars believe that this balance should be mainly reflected in the following aspects:

(1) Cash and non-cash balance. On the basis of ensuring that employees have appropriate basic salary, the incentive compensation method of interactive application of cash and non-cash is established.

(2) the balance between short-term and long-term. Employees who are of great value to the overall and long-term development of the organization, such as middle and senior managers and core employees, should appropriately increase the proportion of long-term incentive pay; For employees with high short-term performance requirements, we should pay attention to the design of short-term incentive compensation. In organizations with great growth potential, we should pay attention to the application of long-term incentive compensation; In a relatively stable organization, we should pay attention to short-term performance development and incentives.

(3) Balance between individuals and teams. 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 cooperation among team members and prevent the imbalance of "subordinates" mentality caused by the excessive wage gap between the upper and lower levels of the team, because it is impossible to form an excellent team by individual talents alone.

(4) Balance between risk and reward. The design of incentive compensation should pay attention to the proportional relationship between risk and income, that is, the greater the risk, the more income the post will give. In the new economy, the most important asset is people, and the smartest thing an enterprise can do is to create an environment that can retain the best talents. Therefore, enterprises that regard talents as the key to success can only be invincible in the fierce competition for talents and strive for the long-term prosperity of enterprises if they master the basic skills of motivating subordinates and cultivating talents and design a scientific and effective salary system.

With China's increasing integration into the world economic tide, the "talent war" is inevitable. If the market competitiveness of salary is not improved, it will lead to brain drain, and a general large salary increase will inevitably increase the burden on enterprises. Therefore, it is very urgent and necessary to re-examine the existing salary system, clarify the salary strategy, adjust and improve the salary system within the scope of the enterprise's ability to pay, and increase the incentive of salary.

The salary system is the link between enterprises and employees and an integral part of the company's strategy. Only a well-designed incentive compensation system is effective. Designing such a salary system will help to reduce the brain drain of enterprises, attract senior talents, reduce internal contradictions, enhance enterprise cohesion and improve the overall quality of employees, thus improving labor productivity and improving enterprise mechanism.

Salary, including wages and benefits, is the return of employees' labor input, the labor cost that enterprises must pay, and one of the important means for enterprises to attract and retain talents. In modern human resource management, a scientific and effective salary system has become the driving force of employees' professional behavior and the intangible assets of enterprises.

The survival and development of enterprises depend on people's quality. The main task of human resource management is to plan, develop and manage human resources scientifically in order to acquire and explore the skills and achievements of people needed for enterprise development. Reflected in the design of salary system, it is to link employees' work-related abilities, knowledge and their actual contributions with salary, so as to promote and motivate employees to continuously expand relevant knowledge and skills and play their due role.

At present, most enterprises in China are facing the enormous pressure of international competition, and it is difficult to retain truly capable employees through the "big pot" mechanism. After the implementation of downsizing and diversion, we should re-examine our salary structure and take "retaining people" as the focus of our salary strategy. To this end, the basic goals of the salary system construction should be: first, to attract and retain employees who are valuable to the development of enterprises; Second, encourage employees to continuously develop their own potential, display their talents to serve the enterprise, and achieve a win-win situation for both enterprises and employees. This means that the salary system should be fair and reasonable internally, reflect the incentive function externally and have certain competitiveness. Some enterprises lack standardization in salary management, and there is no systematic management of how much salary to adjust under what circumstances, which is quite chaotic. Therefore, salary management needs to be well regulated in order to have an incentive effect. There should be uniform provisions on the grading principles and salary standards for new employees, newly recruited employees and fresh college students. For employees working in different job intensities, the salary difference should be reflected. The usual method is coefficient adjustment to solve the internal fairness problem. Implement classified management of salary adjustment, specify the principles, conditions and scope of salary adjustment in detail, and realize the transformation of salary management from rule by man to legal system. Salary management should make strict provisions on salary confidentiality. Generally speaking, enterprise salary management is vertically transparent and horizontally confidential, that is, the boss can know the salary of all his direct subordinates, while the salary between peers is opaque and cannot be leaked and inquired.

In addition to attracting and retaining talents, highly motivated salary design can also realize employees' commitment to the organization and achieve employees' satisfaction and professionalism. Therefore, when designing the salary system, enterprises should deeply understand the corporate culture and embody it through systematic salary design, which will be reflected at the institutional level. Such enterprises are also reputable enterprises.