One of the research job applicants carry out is the research on whether or not the company they have applied to is able to meet their desired expectation in terms of salary or wages.
While it is important to make findings regarding compensations organisations offer or are willing to offer, it is much more important to know how these organisations are able to offer adequate salaries and wages because your job role might be critical to that effect.
What is Salary?
A salary is defined as a fixed, regular payment to an employee for their work or services performed over a specific period of time.
A salary can be paid bi-weekly, but the commonest one is paid monthly. Salary includes bonuses or incentives, overtime pay, allowances, and basic pay. However some organisations could exclude compensations on bonuses and overtime depending on the employment contract binding their employees.
Salaries can be grouped into gross salary ( which represents payment before taxes and deductions); Net salary (payment after taxes and deductions); and total compensation (benefits and perks inclusive).
What is Wages?
Wages are monetary compensation paid to people for their labour, skills, or services. It is often paid on an hourly or daily rate; it could also be paid based on each work provided. Wages are dependent on factors such as the number of hours worked, output provided and productivity level. Wages can also include shift premiums, commissions, piecework rates, overtime pay, and hourly rate. However, when someone talks about wages, they could also be referring to the way they are classified. Wages are primarily classified into minimum wage, union wage, living wage, and prevailing wage.
How Do Organisations Offer Adequate Salaries And Wages?
There are critical but necessary steps which organisations take to be able to offer adequate salaries and wages.
First, organisations that are determined to offer the best in terms of compensation to their employees are seen carrying out those steps they consider both critical and necessary.
To offer adequate salaries and wages, they conduct market research to determine what the industry standard is for specific roles.
This step alone involves analyzing data from sources that are reputable, including competitors analysis, industry associations and reports, as well as national and regional salary surveys.
To offer adequate salaries and wages, organisations also consider critical factors such as: employee qualifications and experience; job responsibilities; geographic location and the cost of living; company size, budget, and financial performance of the company.
They do this to ensure that compensations paid to employees are fair, competitive, and in alignment to industry standards. Other ways we can find organisations offer adequate salaries and wages is by considering internal equity.
This process involves job evaluation and grading systems; performance management and appraisal; promotions and career advancement opportunities; employee feedback and engagement surveys, including adhering and complying to laws and regulations on labour laws, minimum wage, etc.
The steps identified are the essential steps that organisations take to be able to offer adequate salaries and wages.
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