How Can a Well-Defined Salary Structure Improve Fairness and Satisfaction in Your Organization?

How does a salary structure help an organization to have a good salary system?

A well-defined salary structure helps an organization maintain a fair and transparent compensation system. It ensures that employees are paid equitably based on their roles, experience, and performance, which can improve job satisfaction and retention.

Information on the latest salary survey for Indian software industries

Can I also have information to get the latest salary survey for Indian software industries?

The Importance of Salary Surveys

A salary survey helps a great deal in knowing where you stand and whether you are offering your employees the industry standard salary or not. It helps you evaluate whether you need to improve your salary structure.

Here's a link to the <link outdated-removed> (Search On Cite | Search On Google). You have to register to get to see it.

Current Salary Structure Trends

Here's an article about the current salary structure which basically talks about how the salaries are getting stagnated. 2004 IT Salary Survey: Salaries Stagnant For IT Staff <link updated to site home> (Search On Cite | Search On Google).

Hi! The salary structure is the salary system and position hierarchy in a company. It is the basis of the company's salary rate per position, the hiring rate, the regularization rate, etc.

Why salary structures change

Salary structures change. The average life of a good salary structure is around five (5) years. After five years, you need to benchmark your rates again to the latest market data to ensure your company's compensation external competitiveness. Moreover, without doing any adjustment in your structure after five years can already result in distortion in some positions, especially if your pay range and gaps are very small.

How to learn about creating a salary structure

A good way to learn how to create your company's salary structure is to attend a course in Job Evaluation.

Best wishes.

Ed Llarena, Jr.
Managing Partner
Emilla Consulting (helps improve corporate governance in Asia and the Pacific Region)

I would like to make a salary structure for a trading firm I am working for. I am presently creating job descriptions; can you help me fix salaries for positions?

How can I obtain salary structures for a trading company in the UAE? How do I conduct a salary survey and establish a salary structure? What criteria should I rely on when determining salaries?

Please suggest if there is a website that details all these aspects. Alternatively, if someone has experience with this, could you provide me with a step-by-step guide on how to accomplish the same?

There are two parts to the salary structure. One is how much you are going to pay. This will vary from industry to industry and within the industry also, from place to place. For this, the company can go for a salary survey, or another alternative is that when you conduct interviews, keep collecting data on salaries.

The second part is under what heads you are going to pay the salary or total package. For this, I have a few suggestions:

1. You shall have to pay Basic Pay.

For determining other components, the best way is to refer to the laws of the country you are in. I will give you an example of India:

a) In India, PF beyond Rs. 6500.00 can be avoided. The best way is to have two components: one as Basic Pay and another as Family/Personal/Special Allowance beyond the basic of Rs. 6500.00 (do not call it pay as PF authorities may demand deduction of PF). On this part, you should not deduct PF. Now you will have flexibility. If the employee wants more money to go to PF, increase his basic by decreasing the Allowance, and if the employee wants more money in hand, increase his Allowance by reducing the basic.

b) House Rent Allowance - In India, HRA up to 50/60% of basic pay for Metros can be tax-free. Check for the exact position and proceed accordingly.

c) In the case of other perks, do not refer to Income Tax only. Check for Fringe Benefit Tax (FBT) also because some perks do not attract Income Tax but attract FBT. So go only for those perks which do not attract both. Some examples are Medical Reimbursement up to Rs. 15000.00 per annum, Meal Vouchers, LTA if taken only twice in a block of four years, Uniform expenses reimbursement, etc. Go only for these perks. In this part of the exercise, you must consult your Chartered Accountant.

Ultimately, you have the annual benefit of a Bonus. If the Bonus is not applicable, still, you can give it on an annual basis, a part of which can be linked to the profitability of the Company (variable pay).

This way, you will be able to make a good salary structure for your Company.

KKT

Thank you for your answer, but that's not what I needed. What I needed was the steps and grades that an employee would enter based on his experience, education, and level.

Thank you, Omnia