Salary policy

Guidelines that set the framework for remuneration of staff.

DESCRIPTION

Salaries are typically determined by referring to the position being filled, the individual’s job-related experience, knowledge and skills, current pay, and the salaries of other employees performing the same or similar job functions. Salary policies are practical documents to aid in the administration of employees’ salaries. They set the framework in which remuneration of employees is determined. Base salaries, salary brackets, salary increases and other salary related issues are defined in guidelines.

PURPOSE & LINK TO INTEGRITY

The provisions in salary guidelines and policies are to ensure that the same decision factors and priorities are consistently applied when adjusting salaries of staff members and when approving salary actions.¹

Salary equity among employees should be considered when setting/changing salaries, since perceived inequity impacts on employee morale and motivation and can trigger contentions of discrimination and / or other grievances.² Furthermore, salaries that enable staff to cover their living expenses decrease the necessity of getting involved in illicit practices.

KEY REQUIREMENTS

• Does your organisation possess a clear organisational structure, job descriptions and staff performance measurement policy on which the salary policy can be based? (Also check tools Staff performance & satisfaction monitoring and Job descriptions)

HOW TO

In order to compare pay for employees in similar jobs, a manager must analyse job-related characteristics for each employee, including:¹

• Job content (are employees doing similar work?)
• Years of experience
• Qualifications and education
• Job-related knowledge
• Skills (required and “premium”)
• Technical expertise
• Performance
• Value of job in the labour market.

KEY GUIDING DOCUMENTS

UC Davis, 2010, Salary Setting Guidelines for Classification Actions, UC Davis, http://www.hr.ucdavis.edu/compensation/documents/setting_salary.pdf, accessed 07.12.2015

Ohio University, no year, Managers’ Guidelines for Salary Requests for Administrative Staff at Ohio University, Ohio University, USA, https://www.ohio.edu/hr/comp/upload/Compensation_Guidelines.pdf, accessed 07.12.2015

FURTHER  READINGS

Indiana University, 2009, Salary decisions for professional staff, Indiana University, http://www.indiana.edu/~uhrs/policies/nonunion/2.0/2.6.html, accessed 03.12.2015

FULL REFERENCES

1. Ohio University, no year, Managers’ Guidelines for Salary Requests for Administrative Staff at Ohio University, Ohio University, USA, https://www.ohio.edu/hr/comp/upload/Compensation_Guidelines.pdf, accessed 07.12.2015
2. UC Davis, 2010, Salary Setting Guidelines for Classification Actions, UC Davis, http://www.hr.ucdavis.edu/compensation/documents/setting_salary.pdf, accessed 07.12.2015