1. Issues to consider in setting up the wage payment mechanism:

Provisions of law:

It is necessary to understand and abide by the law on labor issues prior to the development of wage mechanisms. Enterprises should pay attention to matters such as the minimum wage level stipulated by the State, the salary and wage, the seasonal salary, salary in the maternity period, sickness, leave, etc.

Human resources development policy. You need to determine what kind of labor you need and how much. What business do they need and how do they offer it? And what are you going to do?
Characteristics of work and priority for position titles:
List and preliminarily classify employees in the enterprise according to job characteristics and requirements of different abilities. Determine the type of workforce or group of positions that are critical in the enterprise, subject to the greatest competition from the labor market and need appropriate prioritization. However, despite the high salary, if the salary is equal, not associated with the nature of work, goals and results of the work, it does not promote effectiveness, even counterproductive. The classification of labor into groups has different positions, nature of work and levels of responsibility to pay will help you in establishing a more equitable pay system.
2. Method of calculating wages.

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Depending on the business characteristics of the company, you can choose to pay a fixed wage or piece wage, or both. Fixed wage is the fixed amount that the business pays to the employee monthly corresponding to the position of the job title. Piece wages are the amount of money an employee is paid corresponding to the volume, quantity and quality of work completed. Piece wages can be based on time (hour), or per unit of product, or on revenue, or even gross profit in the month. Each pay method has its own advantages. Fixed wages ensure the employees feel secure and stable in their work and life so that they can wholeheartedly work for the company. Piece wages create the motivation to promote, maximize the capacity of each person, easily measured and associated with the results of labor through fixed basis. In fact, small and medium enterprises should apply both methods of payment.
3. Opinions of employees:
The ability to pay: The last thing you need to consider is the affordability of the business. Salaries are a part of the basic cost that affects business results. You need to calculate the reasonable rate of pay on plan revenue to both ensure adequate pay and encourage employees and ensure business performance. It is important to note that the profit is not always the basis for calculation of salary payment. What if your business project is in its early stages?
4. Steps to develop salary regulations
Step 1: Determining the unit price and the annual plan salary fund.
You need to forecast how much your company will pay for the wages and how much percentage it will occupy on your sales, and that is the unit price for the year. This price will be the basis for you to determine the base salary for the job group, the basis for calculating the salary per turnover or unit of production.
Step 2: Build the system of titles and the coefficient of separation

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Step 3: Determine the method of calculating salary for each employee
For each type of labor, with each department in the business, you can apply a properly calculated salary. Fixed wage may be applicable to administrative positions, Piece wages applicable to direct production or sales. It is possible to apply both methods of wage calculation, which are the fixed wage and the piece-wage in order to take advantage of both forms.
There are many methods that can be paid on the result of the volume of products or the direct turnover of the individual or the group of executives, also on the coefficients or points of title, direct and indirect production units.
What you need to note when paying in the piece-wage form is that you have to determine a reasonable rate or unit price that is encouraging and ensuring income for the employee. You should also set different levels of work completion, and at each higher level there will be additional bonus packages to maximize your ability and encourage employees to achieve higher performance in the workplace.
Step 4: Develop a system for evaluating work performance, reward and punishment.
To ensure the incentives and fairness of pay schemes, you need to develop performance standards, especially for those in the indirect manufacturing sector. This requires a description of the work that is built close to reality, the work and monitoring work plan in each department and individual is done thoroughly and seriously.
The level of completion of the work may be converted into coefficients of 0.8 - 0.9 and a maximum of 1.0 corresponding to labor classes A, B, C. The other way is based on Mistakes in work, such as quality, quantity or progress of work, have a corresponding reduction point.

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Step 5. Regulations on the timing and procedure for calculating salaries and special salary policies.
Employees should be aware of the payroll process and when they are paid monthly. In addition, the regulations should clearly define the payroll cases when employees are sent by the company to school, overtime pay, salary during pregnancy for female workers, etc.
Step 6. Promulgating, applying and continuously evaluating, amending and supplementing the Regulation
Regulations should be written concisely, briefly and understandable. Before the official release, you need to meet and consult employees. In many businesses, who receives what and why is the cause of grievances, rumors, and disunity. The more clear and transparent the salary structure, the higher the morale and motivation of employees. Do not keep secret salary regulations or write puzzles to the reader. The salary for each person is confidential but your wage calculation must be clear and easy to understand. Workers need to know how you pay them. Each employee in the company must know how to calculate salary for individuals, their part. incentive policies of the Company. As a matter of fact, you should always keep in mind that the payment mechanism or policy cannot be invariant and that it should be constantly reviewed, evaluated and modified to suit the business context and new requirements.
In this step, you need to list and group tasks of the same nature, complexity and responsibility into a functional group. This requires a job description and detailed requirements for each position title based on the basic factors such as:
The level of training, professional experience, knowledge and skills required to perform the job. Accountability and pressure in actual work. Based on these factors, you determine the coefficient or score corresponding to each title. You should carefully consider the spreading coefficients between position titles to ensure the fit between the highest and the lowest in the company and the adjacent positions. With the experience of a professional consultant, we offer some important points for the development of salary regulations in your company. You need to specify the salary mechanism in writing, published and applied in the business. This document is often referred to as payroll regulations or wage regulations in the enterprise. The steps should be carried out in the following order:
Through the solicitation of employees, you can know the advantages and disadvantages of the current pay system and the problems that need to be addressed. You can clearly understand their wishes and their views on the rationality and fairness of the payroll calculation in your business. It will help you avoid the subjective error. On the other hand, it makes employees feel respected and salary payment is their own decision-making.
On the average of the social wage of the business sector and the region. Enterprises are not only under pressure to compete on the output of products and services but also the fierce competition of inputs that human resources are always the most important factor. You must determine the average salary of your employees in the same business sector and within the same geographic area. This helps you to produce competitive salary levels that are attractive and retain employees for your business.
Salary mechanism is always a top concern of employees in the business besides other important factors such as industry, the prestige of the enterprise, working environment for this promotion, etc. A pay system which is suitable for improving productivity and quality of labor will help businesses attract and retain good employees.

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In order to ensure that the salary mechanism is effective in reality, it is important to research and consider above factors.


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