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The Process of Determining the Basic Salary of Employees in the Company

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The Process of Determining the Basic Salary of Employees in the Company

Basic Salary of Employees - It cannot be denied that salary is a strong background for retaining employees in a company. Within one month, employees of various levels and classes will receive varying salaries.

 

Of course, this really depends on the duties, responsibilities, and risks of the tasks they have. The heavier the duties and responsibilities, the greater the salary you get. Likewise, the achievements they will achieve if your company has an incentive allowance policy.

 

The salary itself has various components. Starting from various types of additional allowances, deduction of income tax that must be paid, to the amount of bonus received if any. But regardless of what components your company applies, basic salary is still crucial in determining it and must be in every employee salary calculation.

 

The base salary is usually determined in a work agreement or company regulations. However, for those of your HR team who work at a new company and determine this salary policy, it's good if you know the things that affect the process of determining the basic salary of employees. So let's look at the following explanation.

 

Work and Wages System

The work system used by the company greatly affects the amount of basic salary that employees will receive. For example, the shift work system, where this work system has a distribution of the amount of basic salary that is different from the full-time work system or nine to five.

 

Especially if employees are paid in units of results, not units of time. Salaries or wages have 2 standards in giving, the name given in units of work time and/or units of output. Time unit means that the company will pay its employees based on certain working hours, usually once a month.

 

Meanwhile, the yield unit means paying employees based on the project or work they have completed even though there is no definite time. It all depends on the company's payroll system. So the company can use either system or mix the two.

 

The Value of Jobs in the Market

When a new company is founded, you can see the structure and scale of wages of other companies that have similar characteristics or at least exist in one area. It could be that your company has been around for a long time but has a new field or division, so you need a salary scale survey from another company with the same position or field. Because there are different divisions, the amount of salary is different.

 

Usually, the geographic factor where the company stands is also an influence in determining employee salaries. Companies in the same field but significantly different affordability will also have different base salaries. For example, a mining company in Java that is easily accessible may have a lower base salary than a mining company in Kalimantan or in the interior of the forest. That is why the UMP for each province is also different.

 

Adjust to the Wage Scale

When you already know 2 or more salary comparisons from other companies, you can take the average or a range so that it is not too high and burdens the company and not too low so that employees produce well. Basically, the company's financial capacity is a major factor in determining the basic salary, whether it is above average or below the average of other companies.

 

If the wages or base salaries are too low, a long-term effect is very likely to occur, namely destroying the wage proportionality balance so that the relationship between employees becomes unhealthy.

 

Contribution to the Company

For new employees, you can determine the base salary just as you can determine the base salary for existing employees who have a similar job or assignment. You can also determine it from the results of the trial period he is living.

 

If you see the great potential of these employees who can affect the development of the company, there is nothing wrong with giving them a slightly higher base salary. Then you evaluate the basic salary every year if indeed the achievements and contributions to the company are getting bigger.

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