I. The Concept of Structured Wage System
The structured wage system, also known as the differentiated wage system or combined wage system, is a new wage system established during the internal wage reform exploration in enterprises. The structured wage system refers to dividing wages into several relatively independent wage units based on their different functions. Each unit has different structural coefficients, forming a qualitative differentiation and quantitative proportional relationship in the wage structure.
The content and composition of the enterprise's structured wage system should not simply copy the current methods used by government agencies and public institutions. Enterprises can make different specific regulations according to various situations. The components can be divided more or less based on the labor structure. The proportion of each component can be adjusted according to production and distribution needs. There is no fixed format. Generally, it includes six parts: 1) basic wage, 2) position (duty) wage, 3) skill wage, 4) performance wage, 5) floating wage, and 6) seniority wage.
1. Basic Wage
The basic wage ensures the fundamental living needs of employees. The purpose of setting this wage unit is to maintain the simple reproduction of labor power. The basic wage mainly adopts two methods for determination and distribution: absolute amount or coefficient. The absolute amount method primarily considers the employee's basic living expenses and its proportion in the total wage level, uniformly stipulating the same basic wage amount. The coefficient method mainly considers the current wage relationships and its proportion in the total wage level, determining the basic wage as a certain percentage of the employee's standard wage based on a roughly unified reference wage standard.
2. Position (Duty) Wage or Skill Wage
The position (duty) wage or skill wage is determined based on factors such as technical and business requirements of the position (duty), the intensity of labor, working conditions, responsibilities, etc. It is an essential part of the structured wage system, encouraging employees to improve their technical and business skills and fulfill their responsibilities in their positions (duties). There are two specific forms of position (duty) wage: one is the position (duty) grade wage form with grades within the position (duty), multiple salaries per position (duty), and overlapping wage levels among different positions (duties); the other is a single salary per position (duty). The position (duty) wage standards are generally listed separately for administrative personnel, professional and technical personnel, skilled workers, and unskilled workers.
3. Performance Wage
The performance wage is paid to employees based on the company's economic efficiency and the quantity and quality of the actual labor performed by the employees. It plays a role in motivating employees to work hard and contribute more. The performance wage does not have a fixed wage standard; it usually adopts the form of bonuses or piece-rate wages, fully floating, with no cap or bottom limit for individual employees.
4. Floating Wage
The floating wage is a type of wage where the labor remuneration fluctuates based on the company's operating performance and the size of the employee's labor contribution. It comes in various forms and helps motivate employees and encourage them to care about collective endeavors.
5. Seniority Wage
The seniority wage is paid to employees based on their years of service, according to a certain standard. It represents the accumulated labor contributions of the company's employees over time. It encourages employees to work long-term in the company and make greater contributions while appropriately adjusting the wage relationship between new and old employees. The seniority wage is distributed in two forms: absolute amount or coefficient. The absolute amount can be further divided into uniform absolute amounts or different absolute amounts based on years of service. The coefficient can be further divided into uniform or incremental coefficients. Generally speaking, increasing the seniority wage depends on the increase in the employee's length of service, but it should also depend on the employee's actual labor contribution and the company's economic efficiency. Only then can the role of this wage unit be better played.
Each component is interrelated, mutually dependent, and mutually restrictive, forming an organic whole.
II. Key Points for Implementing the Structured Wage System
1. Establishing and Improving the Basic Work of Human Capital
1) Register all employees' numbers, wages, years of service, education, titles, skill levels, production (work) positions, duties, etc., in tables, conduct comprehensive analysis, eliminate unreasonable factors, and identify prominent issues in wage relationships.
2) Based on the characteristics of production, work, and personnel structure in your unit, analyze and categorize employee labor to determine representative labor structures, such as labor positions (duties), labor capabilities, current labor, accumulated labor, etc.
3) According to the objective needs of measuring labor volume, supplement necessary job forms and determine the mutual relationships between various wage forms.
2. Designing the Basic Model of the Structured Wage System
Designing the basic model involves using the materials and situations provided by the above foundational work to determine the wage structure, such as setting basic wage, position (duty) wage, seniority wage, and performance wage as four units. Then, determine the proportions of each unit in the structured wage, viewing the total structured wage as 100% and respectively determining the percentage of each wage unit. Generally speaking, the relative proportion of wage units corresponding to key production and work stages should be set higher, and vice versa. Then, calculate the wage amount for each unit based on the proportions.
Unit Wage Amount = Total Structured Wage × Percentage of the Wage Unit
For example, if a company determines that the position (duty) wage accounts for 40% of the structured wage system and the total structured wage is 100,000 yuan per month, then the wage amount for the position (duty) wage unit would be 40,000 yuan.
3. Determining the Internal Structure of Each Wage Unit
This involves determining the position order of various positions within the position wage unit according to the position function evaluation method. If implementing a one-position-one-salary system, the difference coefficient between positions needs to be determined. If implementing a position-grade wage system, the wage coefficient for each grade within each position category needs to be determined. Additionally, the average length of service must be calculated, and the specific wage form and distribution method for performance wages must be determined, etc. Meanwhile, based on the arrangement of the internal structure of each wage unit, corresponding technical, business standards, responsibility clauses, labor quotas, etc., must be specified, and specific evaluation measures must be drafted.
4. Determining the Minimum and Maximum Wage Amounts for Each Wage Unit
The sum of the minimum wage of each unit plus bonuses and a portion of allowances cannot be lower than the minimum wage standard implemented locally.
5. Calculating, Testing, and Adjusting the Structured Wage System Plan
Based on the initially determined wage standards for each unit of the structured wage system, include all factory employees (or a sample) in the plan for calculation:
1) Check whether the total individual structured wages of all employees basically match the planned structured wage total.
2) Check whether the individual structured wage levels of employees are basically consistent with their previous wage levels, with most people experiencing slight increases. Focus on whether the originally planned wage-increasing production and business backbone employees have received more significant wage increases.
3) Predict the trends in wage increases for various types of employees and the total structured wage increase based on changes in various aspects of the employees' situations (such as increased length of service, improved technical/business skills, changes in positions/duties, etc.).
If there are issues such as exceeding or remaining too much of the total wage, or the majority of employees experiencing wage reductions, or the future growth rate of structured wages being too fast or too slow, the structured wage system plan needs to be appropriately adjusted.
6. Implementation and Adaptation of Structured Wages
Carry out the transformation of the structured wage system based on the original wage system. This generally involves matching the employee's original standard wage at a certain percentage to the nearest position (duty) wage or skill (technical) grade wage. -- December 4, 2008, 4:51 PM by David Chen