How to do a good job of salary incentive

Five steps to design a good salary plan:

Step 1: Understand the level of employee needs.

Jack C.Francis once said: "You can buy a person's time, you can hire a person to do a fixed job, you can buy on-time or daily technical operation, but you can't buy enthusiasm, creativity and dedication. You must work hard to win these."

The competition of enterprises in the future is the competition of talents, which has been recognized by the business community. Every enterprise will encounter similar problems: the brain drain rate is high, it is not easy to attract talents, it is even more difficult to retain talents, and it seems far away to give full play to the best benefits of talents ... Many enterprises always think that this is not a problem, and it can be solved by increasing employees' income. So, can a simple salary increase fundamentally solve the above problems? After a period of time, enterprises found that employees' income increased, but their performance did not improve. Excellent employees have not been retained, but the cost of the enterprise has increased. Why is this?

Based on the assumption that people are "economic people", employees have material needs, and improving employees' income can achieve the purpose of attracting and retaining people. It is worth noting that people are not only "economic people" but also "social people". In addition to material needs, there are social needs. Enterprises should pay attention to caring for and respecting people's needs, cultivating and forming employees' sense of belonging and loyalty, and attaching importance to employee communication and employee participation. In addition, people are still "self-actualized" people, and enterprises need to provide a development platform to meet the needs of self-actualization. Therefore, from the perspective of retaining talents for a long time and exerting the benefits of talents, the salary directly related to enterprises and employees cannot be simply treated, which has its own mystery, and the salary system design has been paid more and more attention by enterprises.

Step 2: Master the incentive theory.

As managers of enterprises, we should fully realize the importance of incentives and master relevant incentive theories. Incentive theory runs through the whole process of salary design. Whether the company designs its own salary system or invites experts to design it, it is still in use. It is very helpful for enterprise managers to master the relevant incentive theory for the implementation and application of the salary system.

Commonly used incentive theories include three categories: one is content-based incentive theory, including Maslow's hierarchy of needs theory and Herzberg's two-factor theory; One is the incentive theory based on process, and there is Adams' equity theory. There is also an incentive theory of behavior correction, including Kelly's attribution theory, expectation theory and reinforcement theory. These incentive theories are based on the same incentive principle and play an important role in salary design.

Step 3: Choose the salary model.

There are five common salary modes in enterprises: post salary system, ability/skill salary system, performance salary system, market salary system and seniority salary system. Each of the five models has its theoretical basis and advantages and disadvantages.

In fact, after clarifying the salary factors and the basic principles of salary design, we can combine the above salary models and give full play to the strategic role of salary. The salary factors of enterprises include market factors, post factors, ability factors and performance factors. The basic principles of salary design are market competition principle (external fairness principle), internal fairness principle and incentive principle. The combined salary model includes post skill salary system, skill performance salary system and post performance salary system. Various systems have their own advantages and disadvantages, and enterprises can choose according to their own actual conditions. Among them, the post performance salary system covers all the salary elements, which conforms to the distribution system of "distribution according to work, more work and more pay", embodies fairness and efficiency, conforms to the modern human resource management thought, and is the first choice for most enterprises at present.

Step 4: Design all aspects of the salary system.

Salary design is a systematic project, and every link is very important. Take the post performance salary system commonly used in enterprises as an example:

Link 1: reflect the post value and do a good job evaluation. There are two tasks to be done in this link, the first is job analysis and job design, and the second is job value evaluation. Job analysis is a systematic process to determine the knowledge, skills and responsibilities needed to complete various tasks. It is an important human resource management tool and an indispensable basis for salary design. After completing the job analysis, we should carry out organizational design, hierarchical relationship design and job design, and write job descriptions. Job description is a written description of the position, job mission, job responsibilities, ability and quality requirements, key performance indicators and related work information of relevant positions in the organization. The second item is post value evaluation, which is an important means to ensure the fairness of the salary system. There are two purposes: one is to compare the relative importance of each position in the enterprise and get the position ranking sequence; The second is to establish a unified evaluation standard for external salary survey. Common job evaluation methods include factor method and point method, such as international standard job evaluation system (ISPES), Hays job evaluation system and American job evaluation system. No matter which set of standards is adopted, the job rank sequence can be obtained.

Link 2: Reflect personal values and do a good job in evaluating and positioning employees' abilities. Theoretically speaking, the competency model is more professional. It comprehensively defines the competency requirements needed to complete a certain job responsibility from the perspective of competency. However, it is difficult for enterprises to establish their own competency model, which can be simplified in practice. By using explicit factor evaluation methods, such as education, major, work experience, skills, quality, etc., enterprises can determine relevant factors according to the actual situation. This link has three purposes: first, to judge whether an employee is qualified for the position; The second is to judge employees' competence for the post; The third is to complete the salary positioning of employees.

Link 3: Reflect the external competitiveness, do a good job in the market salary survey, and make statistical analysis after obtaining the salary level and related information of relevant enterprises through various normal means, so as to provide effective basis for enterprise salary decision-making. The object of salary survey is to select companies that are competitive with the enterprise or similar companies in the same industry, focusing on the direction of employee turnover and recruitment sources. The survey data include salary growth last year, comparison of different salary structures, salary data of different positions and levels, bonus and welfare status, long-term incentive measures and future salary trend analysis.

Link 4: Human cost analysis of an enterprise, the purpose of which is to determine the total annual salary and market salary positioning of an enterprise. Any enterprise will be concerned about "how much to pay is reasonable". Through historical data deduction algorithm, profit and loss critical deduction algorithm, labor distribution rate deduction algorithm and other tools, it can help enterprises determine the total annual salary, and then determine the positioning in the market salary, whether to adopt a leading strategy or a following strategy.

Link 5: salary structure design. How to design the salary structure depends on the salary values and salary ideas of the enterprise. Under normal circumstances, enterprises often have to consider four factors comprehensively: first, hierarchy, second, personal skills and qualifications, third, personal performance, and fourth, allowances and benefits. The salary structure is designed as post salary (including basic salary and performance salary) and salary and welfare respectively. Post salary is determined by post grade (post value evaluation), and post grade is the main factor to determine an employee's salary. Post salary is an interval, not a point. Different employees in the same position have different contributions to the company because of their different skills, experience, resource possession, work efficiency and historical contribution. Therefore, it is necessary to keep differences in the setting of post salary, that is, the same post is not necessarily the same. This increases the flexibility of salary changes, so that employees can gradually improve their salary level within the same post level with the improvement of skills and experience without changing their posts. Performance pay accounts for a certain proportion of post salary. As for the proportion of enterprises, it can be determined according to the actual situation, the proportion of pursuing flexible performance pay can be higher, and the proportion of pursuing stable performance pay can be lower. This part of the salary is linked to the employee's performance completion. The forms of performance pay are diversified, which can be embodied in monthly performance, quarterly performance and annual performance. In addition, you can also set performance pay for non-post wages, such as year-end bonus and stock options. The determination of performance pay is closely related to the company's performance appraisal system. Allowances and benefits can be determined according to state regulations and the enterprise's own situation.

In the whole process of salary design, it is necessary to understand the interest psychology of the organization, grasp the key driving factors, and understand the salary distribution scheme accepted by employees psychologically. Before the scheme design, the enterprise can do an employee interest psychological survey.

Step 5: Establish the guarantee system of salary system.

The salary guarantee system covers five aspects: organization system, index system, evaluation system, salary system and arbitration system, which are indispensable.

In terms of organizational system, general enterprises should set up performance-based compensation management committees to ensure that mature enterprises can set up different committees (such as compensation assessment committees, technical/management expert review committees, and compensation arbitration committees) to strengthen protection. The performance-based salary management committee consists of the company's main leaders, the heads of some functional departments and employee representatives. It is the highest decision-making level of the company's performance compensation management, and is responsible for studying and formulating major compensation policies. Responsible for the assessment of key personnel; Responsible for the evaluation of technical ability, post value and contribution; Responsible for adjudicating wage disputes, etc.

The index system has two meanings, one is the salary factor index system and evaluation method, and the other is the performance appraisal index system and evaluation method. Index system is the key to reflect enterprise values and strategic objectives of enterprise management, which directly affects the play of salary utility. Its purpose is to ensure the realization of the overall goal of the enterprise; Clear evaluation benchmark; By decomposing the objectives at different levels, all levels of the organization can share the responsibility; Clarify the direction of efforts of employees in each position.

Evaluation system refers to the establishment of a scientific and complete assessment system for the salary distribution system. Through objective and accurate evaluation, on the basis of determining a reasonable salary level for each employee, we should also give employees a complete, fair and objective evaluation, which not only solves the external remuneration of employees, but also meets their internal psychological needs, so that employees can work in a good mental state.

The key to the payment system lies in: firstly, put an end to the loss of wages from the payment procedure, and let every penny give full play to its effectiveness; Secondly, under the principle of salary confidentiality, centralized payment is implemented to realize the flattening of payment institutions and reduce management links; Thirdly, establish an audit system of employees' wages from the payment procedure, establish a restraint system, standardize payment behavior, and put an end to black-box operation; Finally, formulate strict payment discipline and standardize payment behavior.

Once the salary is assessed, it is easy for employees to form a sense of insecurity and unfairness, which will inevitably lead to unfairness and irrationality for various reasons in the implementation process. In order to solve the contradiction, pay the salary fairly, make the salary distribution system fully implemented, and achieve the expected effect, it is necessary to establish a perfect arbitration system, strictly implement it under the leadership of the performance compensation management Committee, and implement fair things to ensure that the rights and interests of employees are not harmed.