How much to pay an employee?

 This question worries everyone who faces difficulties in hiring and retaining personnel and is not sure that their offer is more attractive than the offers of most competitors in the labor market.

On the one hand, you do not want to overpay. On the other hand, if the offer does not interest the applicants, the recruitment may be delayed or even fail.

Therefore, it is worth determining the logic of determining the optimal salary – both for the position and for the employee who is unhappy with the size of his salary.

Keep in mind, there is a difference in assessing the value of a position and the value of an individual employee or applicant.

Method 1: Monitoring, analyzing the labor market, and calculating average wages

Form a sample of vacancies in which the job content and/or requirements for applicants are similar to those for your position.

The average market salary current on the current date is calculated automatically.

If you want to position your offer relative to the average market wage, use reasonable multipliers – 10%, 15, 20%.

Some companies position their offer simply – “we pay more than anyone else”.

I do not think this approach is effective – an employee’s qualifications and performance do not linearly depend on the size of his salary.

Method 2: Salary Surveys

It’s easy to use salary surveys – you don’t have to collect and analyze any data.

You open a solid booklet and find the average, minimum, and maximum wages for your industry or occupation.

It’s easy to justify the optimal salary – you can refer to a reputable source.

How to pay salaries to your employees?

Salary should always be paid on time, and it should all be accompanied by documentation, tax deductions. You can hire a secretary to handle this. Or you can try to pay your employees online, recording all the information about the hours worked, salaries and taxes. These documents are freely quoted and stored electronically. You can make a sample check stub earnings statement in a couple of minutes.

Method 3. Grading

The labor-intensive method.

The principle is approximately the same in all of them.

Positions in a company are compared according to standard criteria, the scores obtained using the point-factor method are converted into points that correspond to the relative value of the position within your company.

Positions with a comparable number of points are allocated to salary groups – grades.

Method 4: Asking applicants on their resumes

The method can be effective for specific categories of positions.

Technically it is not complicated – you make a sample of applicants’ resumes, derive the average value, and analyze the statistics.

Based on the perceptions of the qualifications of applicants, determine what level of salary will be acceptable for them.

Method 5: Negotiating with job seekers

You invite people you are interested in, talk to them, and discuss applicants’ wishes during the interview.

You can ask them, “why so much, where else have you been, what other offers they have, how much they were paid at their previous place”.

There is no guarantee that you will get truthful answers to all the questions, but you can try.