Tips for Employers and Employees for Fixing the Salary

The working population is united by the most important thing and that is the salary. Some might love their job and some won’t. But anyone working for a wage will agree upon the fact that getting the right amount of salary is the ultimate outcome of the job that one looks forward every month. The salary range is referred to the salary bracket within which your salary will depend. The appraisal of your position will depend on the last limit that is set in the salary range.

As per experts, the salary range is generally determined upon the market rates and following the general standards of the similar industry in a particular region. This is the general scenario but it often varies in case the employers’ decision. Sometimes as per the experience, education or skill of the employee, the employers decide to exceed the salary range but there is no guarantee on this as this decision is solely influenced by the management’s discretion.

There are several factors that influence employers to decide the salary. Salary market surveys are conducted and many companies take active participation in it. As suggested by experts that is an effective way to perform salary research. There are different mediums online with which you will be able to complete the research using salary calculators.

Determining the salary philosophy of the company

Different companies have a different structure but experts have some suggestion for growing businesses. In case, a company wishes to appreciate the contribution of an employee you can arrange for a bonus. In case an employee has contributed in getting a big deal that is gaining you a financial boost, you can decide on a bonus and give it as a reward for that particular employee. In that way, you are not contributing to the overall increase in a monthly salary and yet motivating your employee for their hard work.

Assessment of the labor availability and competition

When the unemployment rates remain high, it becomes easy to get a skilled employee even at a low salary. In such a situation, the unemployment rates are high and the job availability becomes less. There remains an economic downturn.

Added benefits along with salary

As an employer, you might not give a high salary to your employee and still motivate your employees. There can be health benefits, transport benefits, shift allowance, or simple shopping vouchers that will help employees to stay motivated. Make sure when you share the benefits with your employees, you also notify them about the value of those added benefits.

The motivation of the employees

For the employees, now it has become easier to compare the salaries by checking the salary that is being offered by different companies. It makes them easier to fix an expected salary that they would share with the employer when there would be a discussion of salary.

Salary comparison

This is an important part from an employee’s perspective. The position that you are interested in is offered by different companies. Start your research from the local market and compare the salaries and the job descriptions. If the job description comparison is done, the next comes the position of the organization in the market. The company should also be compared with the similar companies of the same size, similar market shares, and sales volume.

Other additional factors

The location of your job adds up to the demographic value of your job. The number of people available to do a particular job affects the salary. In a place where unemployment rates are high, the employer does not raise the salary as they know they would get the job done even in a low salary. Competition for employees is also a deciding factor for the salary. But experts say that it is very important to motivate the superior employees and retain them in the organization. That is only possible if you give the proper recognition and appraisal which is obviously a positive motivation.

Goals that the salary structure will help you to achieve

Along with the salary goals, you must have other professional goals as well. Make sure that you keep the mission and vision of the organization in sync with your goals.

From the perspective of the company, the pay structure also decides the work culture you desire in your organization as an employer.  In this case, if you think that you will have one employee with high remuneration and the rest team would be deprived of their desired salary there can be a conflict. The team building and the office culture will not improve and this salary discrepancy might affect the team bonding.

Some experts say that giving a lesser salary than the industry standard rates will bring you mediocre employees. Here the HR team needs to clear out the strategies. To get in easy recruitment, HR agrees upon cheap labor, then there is a clear way for employees to shift jobs when they get a better salary. When you underpay an employee, the situation might make the employee take the offer but he or she will not feel valued in the organization and will be in constant search for another job.

It is important on the part of the employer to clarify the salary philosophy for the employees. The employees shouldn’t feel demotivated or get into gossip about the management. It is obviously not advisable to disclose the compensation. But you can explain the methods how you are determining the salary of an employee. This will also help them find the ways to work upon those required areas through which they can increase their salaries in their near future. When the employer has a fixed salary structure and philosophy, the employee gets assured that salaries in the organization are not simply fixed upon favoritism of the management.

These simple tips are a way to clarify the salary structure and to maintain a balance between the employee’s expectations and employer's abilities. These are a few general tips shared by experts which are subject to change as per the situation and industry demands.