20 February 2023

How to design your company's salary structure

outstretched hands receive coins drawn floating with dollar signs, on a grey background

Table of contents

Organise a competent and fair wage structure The job-based approach within the company is beneficial to both economic health and employee satisfaction. 

Although all organisations have their own remuneration system and criteria, they do not necessarily have to have developed a salary structure to do it fairly.

What is the wage structure?

We define as salary structure the system that determines the different salaries of an organisation's employees based on pre-established criteria.

In other words, it is a kind of list of the different salaries paid to staff members of employees in a company. By taking into account the minimum and maximum of each position filled, this is a good strategy for maintaining pay equity.

While not straightforward at first glance, thanks to the different tools or software that have been released We have an interesting help, something that benefits us in terms of time - hours invested in this - and precision. Ideal for those who are up against the ropes, I'm sure you will also be delighted with the results.

How do I determine my company's salary structure?

Once we are clear about the concept, the next step is to look at the how we will determine the wage structure of the site we run. By accepting certain criteria, anyone who pays attention can learn the techniques that will lead to better remuneration of their employees. Here are the main steps:

Level of education (or skills)

Part of the salary that we will give to the employee is based on the level of education that he/she has, in that knowledge that makes it different from the other. Knowledge, which is essential for certain functions, is something that helps the company to continue to grow, to reach goals it had not even imagined.

Work experience

The work experience is also a degree. Although we can hire people who have not put into practice what they have studied, it is worth considering this point when we think about what we are going to give them.

Employee responsibilities

Not all employees have the same responsibilities within a company, and this, in addition to value it for certain incentives, is something we need to take into account when it comes to pay. The hierarchy here is quite clear; the greater the employee's concern for the organisation, the better the money should be.

Worker effort

The effort made by an employee is another detail that we must take into account when we talk about designing a salary structure and that, whether it is mental or physical, it is important that the worker sees it, that he/she knows that we take it into account and that it will be noticed in the payroll sooner or later.

Recommendations when defining the salary structure

When defining the salary structure, it is important to consider the different types of remuneration and compensation that exist, as not everything can be summed up in the salary paid on the payroll.

  • Fixed salaryThis is the money that the employee receives for his or her work in the company and which does not vary. This part is the basis of the total compensation and is fixed taking into account all the points mentioned above.
  • Variable partVariable remuneration: Consists of financial incentives that the employee will receive based on factors such as performance or results. Examples of variable remuneration are sales commissions or shares in the company's profits.
  • Social benefits: These are non-monetary retributions received by workers in addition to the fixed salary, such as, for example, restaurant ticket, transport ticket o childcare ticket. The main objective of social benefits is to provide compensation that is tailored to the needs and preferences of employees, enhancing their satisfaction in the company.
benefits-network

Why is it a good thing to maintain the wage structure in our company?

The workers are the ones who get the work done of a brand forward. Without them, all that the common user has at his disposal every day would not be possible, and that is why, if we seek to recognise their worth, we should give them the right remuneration for their performance.

So, with a defined and solid salary structure, we will be much more organised, aware of what each and every employee is entitled to. This, which will say a lot about us right from the start, is something that not only helps to have satisfied employees within our company, but will also improve the attraction of talent.

In this section, it is essential to ensure equality between men and women and that, for women, there is also a fair wage ratio. Today, compliance with the law on equality is a necessity which, if it is not taken into account, fines can be imposed. 625 € to 6250 € to be paid Are you going to take a gamble?

In short, designing a salary structure for employees of the company is something that speaks in our favour. In addition, within contracts, we can give certain social benefits as another form of retribution. This, which will also work in the brand's favour, is something we should always bear in mind.

Don't think about it! If for some time you have been looking for a new way of managing the company you run and the way in which payments are set up, maybe getting a tool to help you with this task is the right thing to do. solution to so many years of conflict. With all the advantages we talked about a moment ago, are you going to miss out on what it can do for that company?

Edenred Spain

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