It is perhaps one of the most sensitive points for each of us, I am referring to the concept of remuneration and what has traditionally been understood as salary and compensation.
The old administration had as its main focus in its remuneration system the importance of the position. The position or name of this was attributed the remuneration, skills and functions. Any professional or technician, just by having the name of the position, should, theoretically, know how to carry out their job. Salary structures were based on position, regardless of whether or not the worker had the necessary skills. It was also important that the worker accumulate years of experience so that his remuneration was increased. Due to this reason, many professionals, in the old administration, practically looked for a company to stay for life. An important factor was the preponderance of the fixed salary.The worker, regardless of his goals or performance, received the same salary at the end of the month. What's more, this was his main motivation. In terms of the employer, this perceived remuneration as an organizational cost.
Many companies today continue with this same treatment of the concept of remuneration. But why change the paradigm if this has apparently worked?
Today, companies have been making progress in each of the areas that comprise it. Remuneration has not been left behind, it is for this reason that many companies have opted for a Strategic Remuneration system.
The main focus of compensation is no longer on the position, but on people. People are the basis and fundamental nucleus for the growth of the organization. Salary structures are no longer solely based on position, but people's competencies, skills and values are also considered. These must be aligned with the strategy of the company. The performance of the person should be the basis of their recognition, not seniority, but how it adds value to their area, business unit or company in general.
Make no mistake, we should not underestimate the experience of the workers with more years in the company, but this experience should be followed by good performance.
The old paradigm of only paying a base and fixed salary to the worker must be replaced by a variable remuneration, which at the same time constitutes creative recognition systems that function as motivating elements for each of the workers.
The challenge for the Human Resources area is to develop a strategic remuneration system that does not use the fixed salary as the only functional element, but rather that this system can find various components that are adequate to fulfill the company's strategy. The concepts of strategic alignment, equity and equality, performance and incentives should be present in compensation planning.
The Strategic Remuneration system is made up of various edges that must be perfectly combined. These have to do with:
- Recognition programs (pecuniary and non-pecuniary) Variable compensation Compensation for skills Compensation for skills Functional compensation Fixed compensation Intangibles Benefits
The importance of these benefits will allow the company to attract the best talents to the company, retain key human capital for the success of the organization and directly impact the quality of life of workers.
And you, do you dare to leave the old paradigms of remuneration?
Andrés Cordero Valdés
Business Administration Engineer. Master in Organizational Development and HR
