System of material rewards for personnel
Posted: Sat Feb 01, 2025 6:53 am
The main element of material motivation of employees to fulfill work obligations is payment for labor. In the process of calculating the amount of wages, management relies on high-quality and quantitative indicators of the employees' work.
Depending on the calculation, production payments are divided into 2 types:
Time-based payment. Funds are accrued to the employee in an amount proportional to the number of hours worked. The calculation includes characteristics of working conditions, additional payments, and the employee's qualifications.
Piecework payment. Payment based on the amount of work done.
Regardless of the type of payment for work, wages are divided into 2 parts.
Fixed part of salary
It is established by the company's management or the state and, in turn, is divided into 2 components:
The basic salary has a stable part with a set amount.
The additional part includes luxembourg email list regular additional payments, such as compensation for inconvenience during work or expenses incurred by employees while performing their official duties. These additional payments are given for work on weekends or in conditions requiring increased efforts, as well as for the results achieved in work.
A separate type of payment is social packages aimed at increasing employee loyalty. They are not part of direct material incentives, but are aimed at minimizing personal expenses of personnel and providing social benefits.
Bonuses are offered to employees for special achievements or qualifications, such as long service, knowledge of foreign languages, professional skills, an academic degree, or other achievements that make the employee valuable to the company.
Fixed part of salary
Source: shutterstock.com
When forming a strategy for building a remuneration system, management must determine how the process of calculating basic wages will be organized. Several methods are offered to choose from:
Market method. Involves calculating wages based on average wage rates in the market for a specific specialization and area of activity.
Grading. Involves determining salaries based on the importance of a profession in the company structure, which requires a thorough analysis of jobs and their owners.
Tariffing. Involves the creation of a tariff grid that classifies positions in the organization according to complexity and qualifications, assigning each level a specific salary.
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"How to Calculate Conversion: 3 Proven Options"
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The choice of the method of calculating wages dictates the creation of a payment and remuneration system, which can vary between the following options:
Simple. A system where payment is calculated only based on the number of hours worked, without taking into account the volume of work performed.
Time-based bonus. This system provides for wages for the time worked, and also adds bonuses for exceeding the established standards for the quantity and quality of work.
Time-based with standardization. Similar to the time-based bonus system, but bonuses are awarded strictly for fulfilling the established plan, without additional bonuses for exceeding it.
Mixed payment. This system combines elements of both time-based and piece-rate payment, taking into account both the time spent on the work and the final result.
Thus, when choosing a strategy for an effective compensation system, it is necessary to weigh all factors from market conditions to the characteristics of specific positions in the company.
Depending on the calculation, production payments are divided into 2 types:
Time-based payment. Funds are accrued to the employee in an amount proportional to the number of hours worked. The calculation includes characteristics of working conditions, additional payments, and the employee's qualifications.
Piecework payment. Payment based on the amount of work done.
Regardless of the type of payment for work, wages are divided into 2 parts.
Fixed part of salary
It is established by the company's management or the state and, in turn, is divided into 2 components:
The basic salary has a stable part with a set amount.
The additional part includes luxembourg email list regular additional payments, such as compensation for inconvenience during work or expenses incurred by employees while performing their official duties. These additional payments are given for work on weekends or in conditions requiring increased efforts, as well as for the results achieved in work.
A separate type of payment is social packages aimed at increasing employee loyalty. They are not part of direct material incentives, but are aimed at minimizing personal expenses of personnel and providing social benefits.
Bonuses are offered to employees for special achievements or qualifications, such as long service, knowledge of foreign languages, professional skills, an academic degree, or other achievements that make the employee valuable to the company.
Fixed part of salary
Source: shutterstock.com
When forming a strategy for building a remuneration system, management must determine how the process of calculating basic wages will be organized. Several methods are offered to choose from:
Market method. Involves calculating wages based on average wage rates in the market for a specific specialization and area of activity.
Grading. Involves determining salaries based on the importance of a profession in the company structure, which requires a thorough analysis of jobs and their owners.
Tariffing. Involves the creation of a tariff grid that classifies positions in the organization according to complexity and qualifications, assigning each level a specific salary.
Read also!
"How to Calculate Conversion: 3 Proven Options"
Read more
The choice of the method of calculating wages dictates the creation of a payment and remuneration system, which can vary between the following options:
Simple. A system where payment is calculated only based on the number of hours worked, without taking into account the volume of work performed.
Time-based bonus. This system provides for wages for the time worked, and also adds bonuses for exceeding the established standards for the quantity and quality of work.
Time-based with standardization. Similar to the time-based bonus system, but bonuses are awarded strictly for fulfilling the established plan, without additional bonuses for exceeding it.
Mixed payment. This system combines elements of both time-based and piece-rate payment, taking into account both the time spent on the work and the final result.
Thus, when choosing a strategy for an effective compensation system, it is necessary to weigh all factors from market conditions to the characteristics of specific positions in the company.