How to Set an Employee’s Salary

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Your organization is growing and you are ready to bring on a new employee. But you aren’t sure how to determine salary for a position.

 Read on. We’ve got all the answers here. 

Create Detailed Job Descriptions

A huge part of determining salary for employees is having a written, comprehensive list of the duties assigned to each role. 

Having a clear idea of what an employee will be doing (or is doing) in a given position is the first step in figuring out how to set a salary.

 Do Some Research 

Then, you will need to find out the median pay for that position in your industry. Sites like Payscale and Glass Door are excellent resources to help you learn what others pay for similar positions.

Researching salaries can also give you insight into how qualifications, experience, and education levels influence salary. Once you have some insight into going rates, you are much closer to using a pay stub maker to compensate employees. 

Create a Salary Structure

Once you have a ballpark idea of the salary range for a position, you need to create a salary structure for your organization.

This way, you can establish what to play new employees as well as set the upper salary limit. This makes onboarding and hiring honest and clear. 

But remember, compensation isn’t just the figure on the job offer.  

Factor in the Total Rewards

You should consider the total value of your compensation package. For example, health benefits, incentives, bonuses, and other rewards.

Research shows that many employees these days are looking for flexible work environments with a fair work-life balance. 

In fact, one survey found that 80% of employees would choose additional benefits over more pay. 

Maybe you allow employees to work remotely when needed. Or you may have flexible hours or a casual dress code and awesome snacks in the lunchroom.

Don’t underestimate the value of these rewards. Be sure to consider these when you set pay.

Be Realistic 

you know your finances and what you can reasonably pay for a position. That means that you will have to make concessions. You can’t ask for 10 years of experience and get away with paying entry-level wages.

Sure, you want the best of the best. But, if your budget doesn’t stretch that far, consider lowering your requirements. 

Keep in mind you can always offer training. In a few years, that employee will have the expert-level skills you want. Hopefully, your corporate culture and fair pay will entice workers to stay long-term so you can keep the expertise in house. 

Determine Your Salary Philosophy

One key aspect of how to determine salary for a position is to outline your company’s philosophy on salaries.

Do you value variable pay? Or are you aiming to raise the level of base salaries in your organization?

If you are a start-up company with variable income, it may be good to control base salaries. When work is steady, you can always add bonuses to individual workers’ goals.

Your salary philosophy will make a big impact on the wages you set for each position. 

Final Word How to Determine Salary for a Position

There you have it: some of the key factors on how to determine salary for a position.

Remember, though your competitors can inform your decision, there are many other factors that determine wages that depend only on your organization.

We hope this article has helped you figure out how to determine salary. Check back soon for more business articles you’ll find useful.

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