• Main
• Blog
• eShop
• Discussions
• Job Resume!

Home » HR Processes » Compensation and Benefits » Correct Base Salary Setting

Correct Base Salary Setting

The correct base salary is very connected to the competitive salary issue. The correct base salary is the salary, which ensures:

 

• the organization can hire a new employee at the requested level skills and competencies
• the organization is able to keep the employee
• the employee is motivated
• the salary is felt as being fair

The most important aspect is the fairness of the base salary to the employee, managers and the organization. Many organization went through many organizational changes and the employees were moved from departments to completely different departments in the organization.

After such an activity, the HRM Function has to be proactive and the overall organizational scan of the base salaries has to be conducted to revise the compensation policy of the organization. There are always employees, who are underpaid in their new position and employees, who are overpaid.

The role of the HRM Function is make a clear picture of the organization, to present the situation to the Top Management of the organization and the conclusion has to be made. The Top Management has to receive a proposal from the HRM Function ensuring the situation will be sorted out by several actions and the time frame has to be agreed.

How to recognize the correct base salary

There several external companies on the market, which monitor the salary levels at different positions and industries and the HRM Function should participate in such surveys. The methodology for the job evaluation is not simple and its implementation takes time, but the result for the organization is amazing.

The proper job evaluation and salary level comparison also helps to the HRM Function to communicate to the Top Management about human capital spending and its comparison with the main competitors on the market.

The role and responsibility of the HRM Function is about selecting the right competitors on the job market and to set the compensation policy of the organization. The goal is not pay better salaries than the other competitors on the market, but to find the right mix to build salary structure on.