Exciting new cuisine-pay Buffet

Exciting new cuisine-pay Buffet
 
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There may be a lot of people around us, especially some college students who have just graduated: The company has given them a high salary and good welfare benefits. In just a few years, they have become middle-level managers of the company, but they always say that the company's salary system is unfair, unreasonable, or even dark. The next step is to change jobs and seek another level ......
When talking about these people, some senior managers of some companies have a uniform evaluation statement: Young, impatient, and greedy ......

As a rational manager, especially a senior manager of the human resources department, you sometimes need to reflect on yourself: Is there a problem with the company's incentive system? Why can't we keep high salaries "? With the changes of the times, the demand of employees has been diversified and dynamic. In the past, a single and rigid salary system has not been attractive enough. In this case, a new salary system-the pay buffet came into being.

Where is the general salary system wrong?

Our current common compensation schemes generally consist of five parts: base salary, capital or commission or dividend, welfare, additional allowance, and extra rewards. One basic basis for all these forms of salary is the position of an employee in the company. The only way to get more salary is to raise the employee to a higher level of position, when an employee reaches the top of his position, his or her salary increases will come to an end.

This close spiral cycle between jobs and salaries implies the following crisis:

1. The incentive mechanism fails. The salary is determined by the position and is not closely related to the performance. The position is mostly based on seniority and step-by-step. In this system, new employees who have just joined the company have low qualifications, low positions, and relatively low salaries cannot stimulate the enthusiasm of new employees; while the old employees lie on their seniority books and enjoy the generous compensation from the company. They also lack the enthusiasm for continuous improvement.

2. Motivation depletion. Raise the employee's position level to increase his salary. The premise of this proposition is that the company must have a long position level chain. The longer the job-level chain is, the more people look forward to it, the more incentive motivation it will last for a long time. However, this kind of incentive power is always exhausted, because the company's position-level chain cannot be extended infinitely, and when the employee's position level reaches the top level, his salary increase journey will come to an end.

3. Increased incentive costs. Because the incentive principle is simple and the incentive method is single, the company can only stimulate employees' work enthusiasm by increasing the salary based on the employee's performance for a period of time on the basis of the basic salary, to retain employees, especially core employees and important employees. This means that the company's investment in employees will gradually increase, and the corresponding production efficiency is not increasing at the same speed. At the same time, wages have the characteristics of "upward rigidity". The rise of wages are all happy, while the fall of wages is complaining.

How can we achieve self-help compensation?

A self-help compensation plan is used to determine the employee's salary form based on the full communication between the company and its employees. Its main features are diversity, customization and dynamic.

1. Diversity of self-help compensation breaks through a single cash format

Because the requirements of employees are diverse and dynamic, the compensation for employees should also break through a single cash format. In his book "compensation plans", American scholar trupman subdivided his salary into five categories and ten components, which were presented in the form of a compensation equation:
TC = (BP + AP + IP) + (WP + PP) + (OA + OG) + (PI + QL) + x
　　
TC = overall salary
BP = basic salary
AP = additional salary. Regular income, such as overtime pay, dividends, and performance rewards
IP = indirect salary, benefits
WP = subsidies for work supplies, resources subsidized by enterprises, such as overalls and office supplies
Pp = additional allowance, discounts for purchasing enterprise products
OA = promotion opportunity
OG = development opportunities, including in-service training and tuition sponsorship
Pi = psychological income, the mental satisfaction that employees get from their work and the company
QL = Quality of Life, reflecting other important factors in life (such as convenience measures for commuting, flexible working hours, and child care)
X = personal factors and individual's unique needs (for example, can I bring a dog to work together ?)

2. Self-customization of compensation to allow employees to get their needs

Because different employees have different understandings and requirements on the compensation system, a one-size-fits-all incentive mechanism cannot produce the best results. The best way is to be the same as in the customer market, customizes the employee compensation scheme and arranges the proportion of the above ten compensation components based on the different needs of the employees. An employee corresponds to a salary combination. For example, if an employee is not interested in the extra allowance, he can give up the extra allowance and select the part that interests him, such as the quality of life (reducing the working hours per week or working at home in the morning); another example is that an employee does not need medical insurance (because his/her spouse's insurance already includes him ), he can convert the original salary for medical insurance to other methods, such as increasing the basic salary. In addition, an employee can choose to raise his salary and give up some rewards afterwards, an employee chooses to pay low salaries and hopes to pay more dividends at the end of the year ...... In short, the customized compensation scheme not only satisfies the differentiated needs of employees, but also reduces the company's investment costs for employees and improves investment efficiency.

On the curve of no difference in the allocation utility, although the salary combination between A and B is different, they give employees the same feeling, and the incentive effect is the same.

3. Self-Help salary is full of humanistic care
Because the requirements of employees vary significantly in different stages and periods, the customized compensation plans cannot be static and need to be adjusted accordingly. For example, the proportion of young employees in direct salary, promotion opportunities, and development opportunities is larger, employees may pay more attention to indirect wages and quality of life. What principles should self-help compensation follow?

1. The final salary target must be consistent with the future development direction of the company and its employees. While taking care of the personalized needs of employees and customizing compensation plans for them, the company should also pay attention to appropriate constraints and guidance to create a positive corporate culture atmosphere, the company's normal management order cannot be lost.

2. Establish a team-based reward concept. Encourage collaboration and learning between employees.

3. Employees must be allowed to participate. Employees are getting more and more disgusted when using the employee compensation program in the dark box. What highlights the self-help compensation program is that employees actively participate in the determination of their own salary forms and content, just like eating a buffet in a cafeteria, select your favorite dishes based on your taste. Decision makers need to fully communicate and communicate with their employees, and work with them to agree on their compensation plans for a period of time. At the same time, a certain degree of transparency is required to allow employees to compete fairly.

4. implement classification management. Different employees have different values and importance for the company. The market supply and demand for similar talents are also different. The company's design and management of their compensation plans should be different in time. According to ABC's management rules, Class A employees (20% of the company's total number) are the backbone of the company. Their contributions far exceed the cost of hiring them, and the company must keep them, therefore, their compensation plans need to be carefully designed, and the salaries paid should be 20% or more higher than the market average. Class B employees of the company (60% of the total number of companies ), it is the company's employer. They generally do their duty, work diligently, and are loyal to the company, so they can pay their salaries based on the average market level or slightly higher than the average market level; the company's class C staff (20% of the company's total number), poor performance and low efficiency, has become a burden on the company, the company needs to persuade them to leave, so we should pay them a salary lower than the market's 10%-20%.