What about your salary?

Most people do not understand how their salary is set and what is the structure of their own salary. The bigger the company is the less understandable the system for setting the base salary and variable scheme is understandable for employees.

The salary is one of the most important factors in setting the whole motivation and performance management system in the company. In the small company, it is pretty easy to explain to people the goals, the company has to reach to survive. In large corporations, the employees do not see their own impact on the financial results of the organization and their contribution to the final result.

In small organizations, setting the salary is mainly on the sense and ideas of the founder or a leader of the company and the financial possibilities of the company. In larger organizations, the system for setting salaries must be put in place to keep the organization in shape and to allow employees to trust and feel fairness in the system, when they see their own salary and comparison with the rest of the organization.

Large corporations use services provided by external consulting companies to set the correct level for each position within the organization and to attach correct salary level to each position and to make adjustments every year to stay competitive with market.

Setting the base salary is not that hard task and it is pretty simple to explain it the employees, but with the variable part of the total income - it can be a complete mess. Human Resources tends to provide management with a very sophisticated system, when every calculation needs a lot of time from managers and Human Resources. And - it does not support performance in the organization as employees do not see the impact of their performance to the final result of the company.

Or - do you understand fully to the structure of your salary and how you can improve your total income?

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