How Do You Develop an Effective Pay Structure?
Developing a pay structure is always going to be a challenge. Developing an effective one is an even greater challenge. In other words, you need to develop a pay structure that works.
What does this mean?
A pay structure that works is firstly, a structure that motivates employees to work harder and smarter and secondly, one that will result in employees wanting to stay longer.
So, let’s begin by learning how to develop an effective pay structure.
What is a Pay Structure?
The WorldatWork definition is :
“the pay structure of an organisation is a management tool that reflects the collection and organisation of internal and external compensation data to support job values. A pay structure consists of a series of pay ranges that represent jobs of similar internal and/or external worth.”
An effective pay structure can fail due to an ineffective implementation roll out process. Comprehensive criteria and parameters need to be set up.
Now that you know what a pay structure is, you can begin to develop one.
Pay structure design is the same as any other principle in life and business. As there are many different ways of running a business, so are there many different ways in which to design an effective pay structure. As this is not nearly an exact science, there is not necessarily a right or wrong way to develop one. However, there is a more professional manner in which a pay structure can be developed, and this is probably the route to follow.
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