What Is Salary and Wage Administration?

Salary management refers to the reasonable salary distribution system and system formulated by the enterprise, including salary standards for different employees, clear components of salary, pay policy, pay distribution methods and principles, work evaluation system and salary evaluation system for the employee, etc. . Payroll management has different models for different enterprises. Payroll management is an important part of business management. ^[1]

Payroll management

Salary management refers to the reasonable salary distribution system and system formulated by the enterprise, including salary standards for different employees, clear components of salaries, pay policies, pay methods and principles,

Paid

1. Sensitive compensation management is the most sensitive part of human resource management, because it involves the vital interests of every employee of the company. Especially when people's quality of life is not very high, compensation directly affects their living standards; in addition, compensation is a direct reflection of employees' ability and level of work in the company, and employees often pass

Basic salary

It is the basic cash compensation paid by the employer for completed work. It reflects job or skill value, and often ignores individual differences between employees. Some pay systems consider basic wages as a function of employees' education and skills. The adjustment of basic wages may be based on the following facts: changes in overall living standards or inflation; other employees' pay for similar work has changed; employees have more experience; personal performance and skills of employees have improved.

Performance pay

Recognition of past work behaviors and achievements. As an addition to basic wages, performance wages often adjust with changes in employee performance. Survey data show that 90% of US companies use performance pay. In the new round of wage reforms that began around 2000, many enterprises in China have also established performance-based wage systems, and public institutions have also set up performance-based wage units in the 2006 wage reform.

Incentive pay

Incentive pay is also directly linked to performance. Sometimes people consider incentive wages as variable wages, including short-term and long-term incentive wages. Short-term incentive pay usually adopts very specific performance standards. For example: In the chemical and plastics division of Praxair Airlines, if you meet or exceed the 8% return on capital target every quarter, you can get a day's salary; the return rate reaches 9.6%, and you worked in this quarter Each employee can receive a bonus equal to two days' salary; if the return on capital is 20%, any employee can receive a salary equal to 8.5 days. And long-term incentive pay focuses on the results of employees' years of hard work. Senior managers or senior professional and technical personnel often receive shares or dividends. In this way, they will focus on the long-term goals of the organization, such as return on investment, market share, and net income.

Although incentive pay and performance pay have an impact on employee performance, there are three differences between the two: First, incentive pay affects employees' future behavior by paying them, while performance pay focuses on the recognition of past work, that is, the time is different The second is that the incentive wage system is determined before the actual performance is reached. On the contrary, performance wages are often not known to employees in advance; the third is that the incentive wage is a one-time expenditure that does not have a permanent impact on labor costs. When performance declines, Incentive wages also fall automatically. Performance wages are usually added to the basic wages, which is a permanent increase.

Benefits and services

Including vacations (holidays), services (medical consulting, financial planning, employee restaurants) and security (medical insurance, life insurance and pensions), benefits are increasingly becoming an important form of compensation. ^[2]