This is usually the single largest
component of a compensation package.
Salary should be tied to a person's
skills and experience. Subsequent
increases need to be based on
an employee's performance, value
and contribution to an organization.
Typically, companies perform annual
performance evaluations.
Each position should has its own
discrete salary range which follows
from the job evaluation. The range
has a minimum, which is the lowest
rate the company will pay an employee
in the position; a job rate, which
is the rate paid to an employee
who is fully developed and performing
at a satisfactory level; and a
maximum, which is the highest
rate the company will normally
pay an employee in the position.
While there is a minimum wage
set by federal law for most jobs,
the actual wage paid is entirely
between you and your prospective
employee. Companies update the
salary structures depending on
market movement. Consult salary
surveys and trade association
to learn the most current practices,
cost ratios and profit margins
in your business field and to
set them at the right price.
Wage levels are calculated using
position importance and skill
required as criteria. Salary structures
and its pay ranges are not static.
Another reason why salary structures
may change is restructures or
downsizing. If the organization
changes, the salary structure
should reflect those changes.
Understanding your company's salary
structure and your position in
it gives you a clearer picture
as to where you're standing and
what you can do to move either
up the ladder or outside to be
paid fairly.
Remember that salary structures
and pay ranges are only reference
points. Your skills and performance
can have an impact beyond this
reference. When a person is promoted
or a position is reclassified
to a higher job rate you should
review the individual's salary
and make a recommendation to the
owner or person in charge. The
salary review should include an
examination of the individual's
qualifications and experience
in the context of the new or revised
requirements of the position.
The salary will not be less than
the minimum of the salary range
for the position.
Wage levels are calculated using
position importance and skills
required as criteria. Learn the
rules and regulations regarding
employee pay.
