ORGANIZATION OF REMUNERATION FOR EMPLOYEES, Goals, principles...

REMUNERATION ORGANIZATION FOR EMPLOYEES

As a result of studying this chapter, the student must:

know

• the content of the concept of "employee remuneration";

• types of employee benefits and conditions for their use;

• regulatory mechanisms for the formation of labor remuneration;

• methods for estimating the quantity and quality of work;

be able to

• Analyze, timely identify and solve the problems of organizing employee remuneration;

• prepare legally competent documents regulating the organization of employee benefits;

• timely introduce into the practice of the enterprise modern methods of estimating the quantity and quality of work;

own

• technologies for assessing the effectiveness of the company's remuneration system;

• modern methods of estimating the quantity and quality of labor.

Goals, principles and classification of employee remuneration

According to the principles of A. Fayol's administrative management, "remuneration of staff is payment for the work performed. It should be fair and whenever possible to satisfy the personnel of the enterprise, the employer and the employee . We note two important remuneration properties resulting from the above definition:

^ the reward must be fair , i.e. made on legal, pre-determined grounds;

2) the reward is of a dual nature, i.e. must satisfy both the employee and the employer. On the one hand, remuneration is the main source of income for an employee and the incentive for his productive work and must therefore meet his expectations. On the other hand, remuneration is the costs incurred by the employer in remuneration of staff, and therefore these costs must correspond to the effect obtained.

At present, it is customary to allocate the following remuneration objectives.

1. Engaging staff. The company is interested in highly qualified specialists, and compensation that meets their expectations, will allow the company to compete successfully in the labor market.

2. Employee retention. Over time, the qualification of the company's personnel is growing, and the company must have a competitive remuneration system so that employees do not go to other companies.

3. Promote productive work. The reward should be such that the employee is interested in high-performance work, advanced training, initiative and creativity.

4. Optimization of labor costs. Remuneration that does not meet the expectations of the staff will lead to its outflow and, as a result, a decrease in the efficiency of the firm's functioning. If the compensation is unreasonably high, the firm will incur costs that do not correspond to the received effect, and may go bankrupt.

It's important to remember!

If there is a shortage of working capital for the payment of wages, the management of the firm can pay it in another form, for example, the products of the enterprise. This practice was quite common in the early 1990s, when enterprises were left without working capital. This situation is amusingly reflected in the movie "The Children of Monday", where the heroine who worked at the pyrotechnic factory received wages with pyrotechnic products.

According to Art. 131 TC US "payment of wages is made in cash in the currency of the United States (in rubles). In accordance with a collective agreement or an employment contract on a written application of an employee, labor compensation may be made in other forms that do not contradict the legislation of the United States and international treaties of the United States. The share of wages paid in a non-monetary form can not exceed 20 percent of the accrued monthly salary. Payment of wages in bonuses, coupons, in the form of debt obligations, receipts, as well as in the form of alcoholic beverages, narcotic, poisonous, harmful and other toxic substances, weapons, ammunition and other items in respect of which prohibitions or restrictions on their free circulation , is not allowed. "

The reasonableness of the payment of wages in a non-monetary form is shown when the following circumstances are proved:

• The possibility of such payment is stipulated either in the collective agreement or in the employment contract or with the employee an additional agreement was concluded according to which the employer has the right, with the written consent of the employee, to pay a part of the salary in a non-monetary form;

• there is a voluntary consent of the employee to pay wages in a non-monetary form, which is confirmed by his (employee) written application.

Before the payment of wages in a non-monetary form, the accounting department determines the market value of goods transferred to pay for labor and reflects this in the consignment note whereby the employee receives the goods in the warehouse or in the store. At the same time, the value of the goods should not exceed the level of prices for this category in a given locality and in a given period.

The calculated value of the goods transferred to the employee as a non-monetary form of labor payment is taxed on the income of individuals, and also included in the employer's expenses for labor payment, with all the ensuing consequences. If the tax authorities establish that the value of the received goods is lower than the market price, the employee has a material benefit, which is also subject to personal income tax.

For different employees, effective remuneration will be different, and choosing a form of reward is not an easy task for the manager, but the management of remuneration should be guided by the following general principles.

1. The remuneration must not contradict the requirements of the law.

2. Combination of individual and collective types of remuneration. Individual remuneration raises the employee in their own eyes, collective reward promotes the rallying of the collective. A skilled and intelligent employer combines these types of rewards. Thus, in some enterprises, the "Best site (workshop)" competitions are held, where the collective as a whole, receiving remuneration in one form or another, becomes the winner. Most often these are insignia (pennant, goblet, entry on the Honor Board or the Book of Honor) and a cash prize that is shared among the members of the collective in accordance with the established rule. At the same time, individual competitions of professional skill of workers of this or that profession are conducted, when the winners receive individual remuneration, and not only money.

3. Combination of various types of remuneration. The employer must use all available methods of remunerating employees.

4. Individual approach to employee remuneration. When choosing the form of remuneration, each employee should be approached individually. For example, a female specialist with a child in junior classes can be encouraged by a flexible work schedule so that she can safely take him to school and take them out of school. And for a lone cleaning woman, a reward in the form of a flexible work schedule can be irrelevant.

5. Flexibility and differentiation. This principle is somewhat overlapping with principles 2, 3, and 4. But another example can be cited. If at this stage the enterprise is facing the task of increasing production volumes, then the employer will pay an additional reward for overfulfilment of the production standards. But at some point the goal can change, and the quality of the products will come to the fore. Then it is necessary to make changes in the regulation on remuneration of labor and to establish additional remuneration for the quality of products, reducing the value of remuneration for the volume of production.

6. Clarity. The employee should understand what he has received compensation for, and even in some cases plan, for what he will receive, when and in what form. Thus, in one enterprise, in order to stimulate the creative activity of employees, a provision was developed in which, if the employee made a proposal to improve the technological process or equipment and the commission approved by the order of the director general, he was recommended to trial operation, the employee was paid a certain amount of money. If the offer has positively proved itself during the trial operation, it was recommended for implementation, and the author received the appropriate certificate and the next sum of money. After a while, as a rule, a year later, the economic effect of the introduction of the proposal was estimated, and the author received a cash amount that was calculated as a stipulated share of the received economic effect.

7. Efficiency. The reward should correspond to the received or expected effect.

The reward received by the employee is divided into two types: internal and external.

Internal reward gives the work itself. This is perhaps the most significant and effective type of reward, something that the founders of utopian communism dreamed of, when work is joy, and the necessary material benefits are provided by society. This is the state of the employee, which we characterize in everyday life with the phrase: "A person in the morning happily goes to work, and in the evening happily goes home." Many of us have met in the life of people who are keen on their work, those whom we call "workaholics", for whom the process of labor, its results, is the main reward. To provide the employee with such a reward, the manager must create the appropriate working conditions, including everything from the equipping of workplaces to the creative environment and the moral climate in the team.

Practical experience

In connection with the above, we recall the episode of the Great Patriotic War. The team of sappers received orders to build a bridge over the river, speaking in ordinary language. But this crossing was distracting - neither soldiers, nor military equipment through it will not go. And the sappers, knowing this, worked somehow. The commander, a simple rural carpenter, with a heart pouring blood, saw how his fighters spoiled good logs and boards, somehow constructing the appearance of a bridge. And then he gave the command to build a real bridge. And the fighters were transformed, the work began to boil, and the bridge was built at the right time.

When the crossing of the river began, the commander of the sappers sent the equipment through their bridge. And all sappers experienced a sense of belonging to the victory achieved.

External remuneration is given by the employer and can take many forms:

1) material. This, of course, is wages, wage increases, various kinds of premiums and bonuses (by the end of the year, for achieving the quality level, for increasing sales, etc.);

2) additional benefits. Here, the employer has a huge choice of options: medical insurance, life insurance, payment of additional pensions, additional paid leave, payment of meals or food allowances, payment of holiday vouchers and additional payments for vacation or, on the contrary, on vacation, corporate gifts, travel tickets for transport, season tickets to gyms, compensation of expenses for payment of kindergartens. The choice of a specific form of remuneration depends on the financial capabilities of the company, the composition of the team and the inventiveness of the manager;

3) status: promotion in a position with all the ensuing consequences, a privileged workplace or a separate cabinet, status furniture and brand computer, a prestigious business trip or internship, a personal car;

4) moral: oral praise in the presence of fellow workers, the announcement of gratitude in the order for the enterprise, rewarding with an honorary letter. As the experience of successful companies shows, the methods of moral rewards applied in the times of the USSR work well in a market economy. So, in one company every year on the day of the foundation of the company a solemn assembly of the collective was held, at which the results of the work were announced, the best workers were awarded with diplomas, portraits of the best workers were entered on the Honor Board with the issuance of the corresponding document to the employee, part of which was a copy of his portrait posted on the Honor Board. Workers, whose work experience in the company at the time of the celebrations was 25 years, were awarded with a gold (in the literal and figurative sense of the word) breastplate representing the emblem of the company. On such celebrations it was recommended to bring family members and especially children. All employees marked on this day, in addition to moral rewards, received an envelope with a significant cash reward.

In conclusion, it should be noted that, although various types of remuneration play a decisive role in motivating the employee, without the administrative-administrative factors, the effect will be insignificant. If, for example, the employer effectively uses various types of rewards, motivating employees for high-performance labor to produce high-quality products, while using outdated, low-performance equipment, or high productivity, he will not get the desired level of quality.

thematic pictures

Also We Can Offer!

Other services that we offer

If you don’t see the necessary subject, paper type, or topic in our list of available services and examples, don’t worry! We have a number of other academic disciplines to suit the needs of anyone who visits this website looking for help.

How to ...

We made your life easier with putting together a big number of articles and guidelines on how to plan and write different types of assignments (Essay, Research Paper, Dissertation etc)