-- Establish a broadband salary system corresponding to competency wages, and achieve fair distribution through an incentive mechanism linked to projects
【Customer industry】High-tech industry; software companies; State-owned enterprises
Problem type: Optimization of the compensation system
【Customer Background】
Relying on the strength of local industries, a software company in southern China is committed to carrying out infrastructure construction such as intelligent urban infrastructure, big data, and cloud computing. Based on the nature of the company, the company's technical personnel account for more than 80% of the company's total number, bringing together a large number of technical personnel, high-quality talents, complete software and hardware facilities, laying a solid foundation for building an efficient smart city and customer service system. At the same time, with the continuous development of the company, it has contributed to the local construction of smart cities.
Due to the relatively short age of the company's establishment, there is an urgent need to bring in talents to promote the company's development. In order to attract talent, the company offers a competitive salary level in the market, so it attracts a large number of talents to join. However, with the entry of talents, some problems caused by early management negligence gradually surfaced. For example, some junior engineers have successfully won an annual salary of 200,000 yuan in negotiations, while some senior engineers may only receive the same salary in interviews for various reasons. Although there are significant differences in their ranks and technical requirements, they are ultimately paid the same. In the long run, this unfairness not only discourages employees from motivation and motivation to work, but can also have a negative impact on the company's organizational development. Some employees come to the company and think that now that they have negotiated their salary, they will only focus on completing their own work, rather than taking on additional responsibilities or participating in more projects. They believe that the pay is the same regardless of the amount of work or the work, so there is no need to work excessively. In order to cope with this dilemma, the company's leadership decided to seek the help of a professional third party, Huaheng Zhixin Human Resources Consulting Co., Ltd. It is hoped that through the diagnosis and analysis of the expert team, it can help the company solve the problem of salary system design and improve the management level, so as to stimulate the potential of employees and promote the sustainable development of the company.
【Problem Analysis】
After the expert teacher of Huaheng Zhixin project team arrived at the project site, the company carried out a number of research and interviews, through the analysis of the research results and data, the project team found that the hot spring hotel has the following problems in the salary system:
First, the salary structure is not reasonable
Through the investigation, the project team learned that the company's current salary structure is obviously unreasonable. This is mainly reflected in the fact that when the company introduces talents, it mainly adopts a total concept for the setting of salary, that is, a specific salary amount is agreed with employees during the interview, and this amount is also followed in the subsequent actual payment. This compensation structure is designed in such a way that there is no direct correlation between employees' salary growth and their individual performance.
In this case, it is difficult for employees to earn additional compensation rewards for their individual efforts and contributions, as there is no room in the compensation structure for a floating part. Under this compensation structure, it is not only possible to inhibit employees' motivation and motivation to work, making them less engaged in their work, but also to have a negative impact on the performance of the entire organization that cannot be ignored. Employees may feel that no matter how much effort they put in, the rewards are fixed, which will undoubtedly erode their motivation and loyalty to the company.
Second, the salary is determined according to the rank, and the value of the post and the ability of the personnel are not highlighted
After an in-depth interview with the project team, it was found that although the company provided market-competitive salaries when introducing talents, the setting of these salaries did not fully reflect the value of the position and the personal ability of employees. Although the company adopts the salary setting method by rank, there are significant differences in ability, job value and contribution of different talents within the same rank. Some employees have strong ability, can take the initiative to undertake major projects, and show excellent work results; Some employees may be less capable and can only play a supporting role in the project. However, because they are in the same rank, they receive the same salary. This situation has led many employees to feel unfair and feel that their efforts and contributions are not being duly rewarded. This type of compensation setting can not only discourage employees from motivation and motivation, but can also have a detrimental effect on the company's long-term development.
Third, the salary lacks incentives, and it is almost the same to do more and do less
After an in-depth investigation by the project team, it was found that the company's business was mainly project-based, and there was a lack of a clear project incentive mechanism in the current salary system. As a result, employees' enthusiasm and motivation for project work gradually waned. Under the current compensation system, the level of compensation for employees remains almost the same, regardless of the number of projects they are involved in. Only at the end of the year, based on qualitative evaluations, does the leadership award additional bonuses to individual employees who believe they have put in a particularly hard work. However, this type of reward lacks transparency and fairness, and it is difficult to truly stimulate the motivation and creativity of employees. Over time, employees become passive about their commitment to projects, and they tend to take a perfunctory attitude. Since it is clear to every member of the team that no matter how much effort they put in, there is no noticeable difference in the compensation they end up receiving, they lack initiative and responsibility for the project. This negative attitude to work not only affects the efficiency of the project, but can also have a serious negative impact on the quality of the project.
【Huaheng Zhixin Solution】
Through in-depth analysis and research, in view of the above problems, Huaheng Zhixin consultant expert team has proposed the following three solutions to help enterprises optimize the salary incentive system, stimulate the enthusiasm of employees, and improve the operating efficiency of enterprises:
1. Establish a hierarchical and classified salary structure, and clarify the factors that determine fixed and floating salaries
In view of the problems existing in the company's current salary structure, Huaheng Zhixin suggested that a more hierarchical and classified salary structure should be established to clearly determine the factors of fixed and floating salary. For technical staff, the project team suggested setting the pay to float ratio at 6:4. The fixed remuneration component should be linked to the employee's rank to reflect his or her ability and skill level. The variable compensation component is linked to the performance appraisal results of employees to reflect the actual value they create for the company. Such a compensation structure will ensure that junior, mid-level and senior engineers are compensated according to their contributions, thus motivating them to further improve their capabilities and skills.
For marketers, it is recommended to set the pay fix-to-float ratio at 3:7. The variable pay component should be based on performance to reflect the efforts and results of the marketer to drive sales and business development.
For functional personnel, it is recommended to set the pay fix-to-float ratio at 7:3. The fixed pay component should ensure that their daily work is reasonably secured, while the variable pay component can be adjusted according to their time, frequency and other factors in cross-departmental collaboration, providing them with room for salary increase. Such a compensation structure will encourage functional staff to participate more actively in cross-functional collaboration, improve overall productivity, and create greater value for the company.
2. Establish a broadband salary system corresponding to competency wages
In view of the company's salary according to the rank, without highlighting the value of the position and the ability of personnel, Huaheng Zhixin proposed to establish a broadband salary system corresponding to the ability salary.
First of all, the project team will set up a salary system with a certain salary span according to the company's current different levels. This system will ensure that there is a certain degree of flexibility and flexibility in the pay range within each level to suit the needs of different roles and people. Within each pay level, design multiple pay bands. These grades will be determined based on the product of job value (N1) and personnel capacity (N2). The product of these two makes it possible to more accurately determine the specific pay bracket of each employee in their pay scale.
Secondly, in order to ensure the fairness and transparency of the salary system, the project team divides each grade in the salary band according to a certain equal difference. In this way, in practice, the remuneration of each employee will be determined according to the grade he or she is in, and the salary adjustment will also be based on the corresponding figures. This adjustment method not only avoids the problem that it is difficult to implement the salary broadband range, but also ensures the accuracy and fairness of the salary adjustment.
In addition, while meeting the needs of the existing staff salary range, the project team will also carefully design for salary growth. Ensure that most positions have enough room for salary growth in the next 2-3 years, so as to motivate employees to continuously improve their work ability and performance.
3. Establish an incentive mechanism linked to the project
In view of the company's current lack of salary and incentives, and the problem that the personnel do more and do less, Huaheng Zhixin proposed to establish an incentive mechanism linked to the project to improve the enthusiasm of personnel.
Specifically, the project team established a set of project incentives for the company that were linked to project role responsibilities, number of projects, and project difficulty. In order to ensure the fairness and objectivity of incentives, the point system is introduced as the basis for incentives. Under this system, each project will be subdivided into different links, and the corresponding points will be set for the roles and responsibilities of employees in each link. In this way, when evaluating the completion of a technician's project, the number of projects, the difficulty and the role they play in the project can be taken into account and points can be awarded. In this way, employees are able to accumulate points while completing the project links. The number of points will directly reflect the number of projects an employee has completed, the difficulty of it, and the responsibilities they have taken on in the project. Therefore, the higher the points, the greater the incentive for the employee.
By establishing an incentive mechanism that is closely linked to the project, employees can be encouraged to play a more active role in the project and take the initiative to take on more important roles. At the same time, by using points as the basis for incentives, the performance and contribution of technical personnel can be evaluated more fairly and objectively, and they can be provided with matching incentives. This not only helps to motivate and motivate the technical staff, but also drives the company's R&D projects to run smoothly and achieve better results.
【Huaheng Zhixin Summary】
An unreasonable salary structure will lead to employees complaining about the system, and hard work may not necessarily get a higher salary, and their motivation will continue to decline over time. In this project, due to the company's eagerness to introduce talents in the early stage and neglect management, there were some problems in terms of salary, such as the lack of rationality of the salary structure; The salary is determined according to the rank, and the value of the position and the ability of the personnel are not highlighted; The salary is not motivating, and it is almost the same to do more and do less. In response to these problems, Huaheng Zhixin proposed to establish a hierarchical and classified salary structure and clearly determine the factors of fixed and floating salary; Establish a broadband salary system corresponding to competency wages; Establish project-linked incentives.
Huaheng Zhixin has helped customers to improve the salary management system and solve their problems in salary management for many times. Combined with years of experience, the experts and teachers of Huaheng Zhixin believe that enterprises generally have unreasonable salary design and insufficient incentives; In the absence of a salary adjustment mechanism and other problems, he designed a variety of salary management tools including the three-salary-oriented wage system, and put forward constructive suggestions for the client company, which was highly praised.
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