What Is Total Remuneration?

The so-called total compensation includes not only the economic remuneration and benefits provided by employees to the employees, but also the non-economic psychological effects brought about by the good working environment created for employees and the inherent characteristics of the work and the characteristics of the organization.

Total compensation

Right!

The so-called total compensation includes not only

The total compensation provided by the enterprise to employees includes two parts: economic compensation and non-economic compensation:

Economy

A good overall strategic salary should have internal fairness and scientificity and external competitiveness. A good strategic overall salary can attract, retain, and motivate outstanding talents, thereby bringing competitiveness to the organization and realizing the organization's strategy. When designing a set of better strategic overall compensation, so that compensation has internal and external advantages, three key points should be paid attention to:

(1) The strategic overall compensation system is the first to change. The strategic overall compensation system should change as the strategy changes. In simple terms, if an enterprise changes from a low-cost strategy to a differentiated strategy, perhaps the compensation system will change dramatically. Enterprises with low-cost strategies will find ways to control the cost of human resources, while differentiated enterprises will find ways to attract talents with differentiated capabilities. Human resources costs are not the focus of attention. They mainly attract talents through high-paying systems to retain talents and motivate them.

Second, the strategic overall compensation system should pay attention to changes in organizational structure. For example, flat organizations and hierarchical organizations will have very different pay structures. One is more suitable for broadband pay, and the other is more suitable for narrow band pay.

Thirdly, the salary system should also have different structures in different development periods. For example, organizations in the budding period and organizations in the mature development period will have different goals in terms of incentives and stability, and the pay structure will be very different. Organizations in the budding period often pay more attention to bonuses and long-term incentives, and basic pay is only a basic guarantee; while organizations in the mature period often use higher base pay to attract and motivate employees, and their welfare levels are correspondingly higher than those in the budding period. higher.

The strategic overall salary should also meet the requirements of the social and cultural environment, such as meeting the national legal requirements and policies at the time, taking into account the level of economic development of the entire society and the living standards of the people, the compensation of competitors, industry profits, and characteristics of the workforce. and many more. Socially independent compensation cannot exist. The big environment has changed, and so must the pay system.

Therefore, the strategic overall compensation must be power-transformed, and it should change constantly with the changes in the organization's strategy, organizational structure, organizational development stage, and social environment.

(2) Seven technical issues of strategic overall compensation design. An essential feature of compensation strategy is to find the problem of the compensation system and find a solution to the problem. Achieving strategic total compensation requires addressing seven key technical issues. These seven key issues should be taken into consideration in both knowledge-based organizations and non-knowledge-based organizations, but organizations with different characteristics have different solutions. The seven questions are:

The basis of basic salary is based on position, ability, performance or market? Knowledge workers often pay more attention to their ability factors. The comparison of basic salary and market level is to implement leading, parallel or lagging salary levels. For knowledge workers with core competence, competitive overall compensation should be the most necessary condition to attract and retain them.

Overall salary design (2 photos)

Compensation structure. Among the total compensation, the proportion of fixed and variable, monetary and non-monetary, long-term and short-term compensation is an important factor in the success of the overall compensation strategy.

What is the source of the bonus and the basis for the payment of the bonus? For knowledge workers, how to conduct a reasonable performance assessment, implement a team or individual reward based on the assessment, are the first issues that should be resolved.

The number of rewards, including the absolute and relative levels of the bonus.

Reward methods, such as the revenue-sharing plan in team bonuses, have gradually attracted the attention and adoption of knowledge-based companies because they encourage teams, participation, and sharing.

Welfare design, in addition to statutory benefits, performance-oriented self-employed benefits that can truly meet the differentiated needs of knowledge-based employees have been valued by more and more companies. Flexible benefits are a more practical and knowledge-based welfare method.

(3) Strategic overall compensation must match strategy. Compensation supports corporate strategy. The essential characteristics of compensation are subordinate to corporate strategy and human resources strategy and will support both strategies. According to Mirkovich's view, the compensation strategy is subordinate to the human resources strategy, and the human resource strategy is subordinate to the corporate strategy, which is a trilogy. One of the key words of these trilogy is fit, and the company's compensation strategy needs to match the organizational strategy. Therefore, the foundation of strategic overall compensation is that the organization has a clear and definite strategy, and has a human resources strategy that matches the organizational strategy. Below this, the compensation strategy and the human resources strategy are in the same direction and both support the organizational strategy. The organizational strategy determines the compensation strategy, and the compensation strategy will affect the realization of the organizational strategy.