Ideal Pay structure - internal equity.. CiteHR
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kananchd Started The Discussion:

what is ideal salary/wage structure for an organization ? Is it employer’s choice or statute governs it ?

rajiv505 -  Member Since: Dec 2008
there is no ideal pay structure for an organization. It is based on industry trends and tax savings. You can also adopt a flexible pay structure. Rajiv

Ed Llarena, Jr. -  Member Since: Jun 2004
Hi!

Indeed, I agree that there is no definite structure that can be considered as "the ideal" salary structure for an organization in any industry anywhere in the world. But, there are four (4) basic compensation principles that organizations must consider in the design and adoption of a good Salary or Pay Structure. These are: Internal Equity, External Competitiveness, Affordability, and Sustainability.

The first two (2) relate with employee and market matters while the next two (2) relates to organizational financial capability/ resources. Choices and decisions must balance the two sides if the organization wants to avoid operational problems.

And, a good Salary Structure is best done by professionals!

Best regards.


Ed Llarena, Jr.
Managing Partner
Emilla International Consulting Services
Manila, Philippines
Tel: 00632-828-9842/ 0063-916-762-7218
Email: <emillaconsulting@hotmail.com>
(helps improve corporate governance worldwide!)

raajaramk -  Member Since: Dec 2011
Hi,

If your question is on quantum of salary, you have received the best advice from Ed Llarena, Jr. Insofar as statutory provision in India is concerned, the Government prescribes a minimum quantum of salary payable to different kinds of skills and education levels from time to time, which is supposed to be adhered to by every company. There are of course many companies which do not strictly adhere to this stipulations.

I presume that your question is on the components of salary. If yes, please be aware that there are two components a salary should be structured on ~ fixed and variable. while the former is something like a retainer, the latter is dependent on performance. From taxation point of view, salary (CTC) should be divided into basic pay, house rent allowance, conveyance (transport) allowance and other allowances. HR consultants will be able to help you arrive at a proper structure.

Regards,
K Raajaram

rajiv505 -  Member Since: Dec 2008
there are softwares available for such kind of computations. But decision has to be yours.. one site I know - hr .rajivchawla. com




 
 
 
 





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