The most important thing when establishing a salary scale is to know what the legislation says in this regard.
Initially, it must be made up of: the base salary, and, where appropriate, salary supplements set according to three circumstances; depending on circumstances related to the personal conditions of the worker, the work performed or the situation and results of the company.
The business elements that you should consider when designing a remuneration policy are:
1. Short and long-term objectives
2. Market
3. Systems and operation process
4. Phase
5. Culture
The remuneration concepts are:
1. Total remuneration that implies
A Annual fixed remuneration in cash
B Annual cash remuneration
C Medium and long-term incentives
D Benefits in kind, non-monetary remuneration, examples: company vehicles, housing, company loans, accommodation, travel…
E Non-salary pension benefits
In Spain the base salary represents 70% of the total remuneration
2. Variable remuneration that:
A It must be related to the business plan
B It is administered in a multitude of ways: bonuses (calculated as a percentage of base salary); individual bonuses, commissions, medium and long-term incentives, etc…
The remuneration or salary scale design process should go through these phases:
1. Previous analysis of:
1. Positions (analysis, classification and evaluation)
2. People (profiles, experience, results)
3. Competitiveness (analysis of salary bands, market analysis)
4. Organization (company culture, short and long-term objectives, analysis of production processes, analysis of development policy, analysis of the company phase: birth, development or maturity and legal aspects: contracts)
2. Design of the salary structure: including delivery and perception methods
3. Communication
4. Review
5. Implementation
Undoubtedly, in these times more than part of the remuneration is of interest, the variable part in which (considering the business branch of the company) I advise that it be included due to its motivational importance:
1. Representation expenses
2. Low interest loans
3. Personal Credit Card Fee
4. Free medical check-ups
5. Restaurant vouchers
6. Mobile phone
7. Training
8. Company car
