How to improve the effectiveness of payroll management under high labor costs

1, the main problems of enterprise compensation management

Because of the contemporary human resource management concept in the domestic development time is relatively short, the vast majority of China's enterprise human resource management is still in the traditional administrative personnel management stage, generally lack of modern payroll management concepts and effective mechanisms. Especially for some small and medium-sized enterprises, because they are all from private enterprises, there are many problems in traditional salary management in terms of salary incentives. 1.1 Inadequate understanding of the importance of remuneration Nowadays, many enterprise leaders only regard remuneration as the cost of the enterprise, and have insufficient understanding of the importance of remuneration in the development of the enterprise, and do not recognize the importance of reasonable remuneration management for the development of human resources of the enterprise, and do not deal with the relationship between controlling the operating costs and improving the operating performance in the management of remuneration, and based on such understanding, the leaders of the enterprise think about how to control the operating costs and improve the operating performance. Based on this understanding, the leaders of the enterprise think about how to control the cost on the line, which is manifested in the fact that when the enterprise's efficiency slumps or there is an existential crisis, in order to reduce the wage expenditure, the enterprise immediately takes large-scale layoff measures, which results in the loss of talents, the loss of knowledge, the decline of morale, and the enterprise has a negative impact in the industry. 1.2 The remuneration system is seriously disconnected or misaligned with the enterprise's management strategy and stage of development. Many enterprises do not realize that the remuneration strategies of different enterprises differ according to their management strategies, and they implement a uniform remuneration strategy in their enterprises. To a large extent, this remuneration system is not linked with the strategic management of the enterprise. For example, for an enterprise in the mature stage, its business strategy is different from the growth stage, and therefore the remuneration system should be changed accordingly, but the managers do not adjust the salary of the employees appropriately. Another example is that some enterprises emphasize on rewarding short-term business performance, which leads to the misalignment between the remuneration system and the business strategy. 1.3 Neglecting the application of non-economic compensation Many domestic small and medium-sized enterprises often do not pay enough attention to the non-economic compensation of employees when designing the compensation plan, and some of them even completely neglect it. Non-economic compensation includes participation in decision-making, opportunities for learning and progress, challenging work, job security, and the realization of employees' personal values. While economic compensation is seen as a reward for labor, non-economic compensation is about caring for employees and motivating them spiritually. Although the remuneration of some enterprises is not low, the employees generally have no energy and lack of motivation after staying for a long time, which is caused by the enterprises not attaching importance to the application of non-economic compensation and the lack of spiritual motivation of the employees. The concept of 360 degree compensation should be actively introduced. 1.4 Imbalance of salary structure

The salary structure is composed of various salary units, which can be generally divided into three categories: static salary (basic salary, etc.), dynamic salary (performance salary, bonus, etc.) and human salary (welfare, allowance, etc.). The imbalance of the remuneration structure is mainly manifested in two ways: either the remuneration structure is defective or the combination of remuneration units of various personnel is disproportionate. A defective remuneration structure will result in the lack of sufficient flexibility in the operation of the remuneration system of the enterprise, which will not be able to satisfy the different needs of the majority of employees in terms of remuneration. The other is the disproportionate combination of remuneration units, such as too high a proportion of fixed salary and too low a proportion of performance pay, which may result in the incentive effect of remuneration not being effectively utilized. 1.5 Narrow grade range The grade range refers to the span between the upper and lower limits of the same pay grade (maximum and minimum pay) in the pay scale, and is one of the most important indicators of whether the pay system has sufficient flexibility and extensibility. Too narrow a range of pay grades results in too little room for improvement of employees' pay. In a job-based compensation system, it is easy for employees to be ostracized from each other because of job advancement and other vicious competition. At the same time, the narrow grade range greatly weakens the adaptability of the remuneration system to the adjustment of the internal structure of the organization. 1.6 Neglecting the communication link of remuneration Nowadays, many small and medium-sized enterprises adopt the system of secretive remuneration. The lack of disclosure of salary increases or bonuses makes it difficult for employees to determine whether there is a link between compensation and performance. At the same time, the problem of trust also exists. The tendency of people not to see what others are getting paid and not to understand the value of their own contributions to the company naturally undermines the motivational and fulfillment functions of these systems. One of the key principles of compensation management is that "pay is communication," and compensation systems can only be made more effective if management and employees communicate their intentions and open up relevant pay information through mutual communication.

2. Evaluation criteria of the effectiveness of compensation management

The core of human resource management is to establish an effective compensation management mechanism, and the effectiveness of compensation management should be considered from two aspects: effective control of the total cost of compensation and improvement of the incentives of compensation. Only when both are taken into account can the effectiveness of payroll management be improved in the real sense. 2.1 Cost control With the increase of labor price, it is necessary to control the labor cost to reduce the operation cost and increase the profit of the enterprise. Therefore, salary design must be based on the contribution of employees to the enterprise. 2.2 In order to improve the effectiveness of the pay incentive mechanism, first of all, there should be a criterion for evaluating the effectiveness of the pay incentive mechanism. According to the staff's own qualities and the goal of pay management, the evaluation criterion of the effectiveness of the pay incentive mechanism is set as the following four points. (1). Importance Evaluation of importance means that the construction of pay incentive mechanism should fully reflect the contribution of each department and position to the performance of the enterprise, i.e., the design of the pay should be in line with the importance of the position and the performance of the employee, so that the value of the employee can be fully embodied in the position of the company in which the employee is working. Such as the company can not just raise the salary of senior management, ignoring the grass-roots or professional staff salary increase, and grass-roots staff, especially some technical expertise but not interested in

In the management of the promotion of the staff, the enterprise should also be specially designed to reflect their own value, and is conducive to stimulate their enthusiasm for the work of the pay system mechanism. (2) comprehensive that is, the design of the pay incentive mechanism should be as much as possible to cover the functions of the job, such as the above example of technical staff pay incentives, the design of the pay system should not only in the hierarchy to reflect the level of status between the high and low, but also to reflect the special characteristics of each position so that the special contribution to the enterprise. Since each department plays a different role in the operation of the enterprise and makes different contributions, but it is indispensable to the enterprise, a single rigid salary evaluation criterion for distributing the salary will make the value of the work content of the employees in different departments not be well reflected, which will not only discourage the employees who have made great contributions to the company, but also encourage the burnout behavior of the employees who have made small contributions but have received more than what they should have received in terms of remuneration for their work performance. (3) Reasonableness This standard requires that the compensation mechanism designed by the enterprise, firstly, legally conforms to the requirements of China's Labor Law, Company Law and other relevant regulations on employee salaries, reflecting the legality of the compensation mechanism is the primary criterion of reasonableness, and protects the employees' basic requirements of life; secondly, from the viewpoint of the company level, the compensation provided by the enterprise to its employees should be in line with that of the similar enterprises, and if the salary is far lower than that of the similar enterprises, the salary will be lowered. If the salary is much lower than the salary of similar companies, it will reduce the attractiveness of the salary; and if the salary is too high, it will increase the cost of the company, which is not the goal of maximizing the efficiency. Therefore, designing the salary standard suitable for each department and position of the company is conducive to the realization of internal and external fairness of the company, which is also a direct manifestation of reasonableness. (4) Incentive that is, the enterprise's pay incentive mechanism can fully mobilize the enthusiasm of the staff, stimulate the staff's creativity, improve the work enthusiasm and initiative. In addition to the importance of each position as reflected in the salary, the comprehensiveness of the salary content and the reasonableness of its design, the enterprise should also pay attention to the material and spiritual needs of the employees, so the salary incentive mechanism should cover both salary incentives and status incentives, honor incentives, results incentives and other spiritual incentives to enhance the sense of belonging to the employees, to meet the needs of a higher level, and to help employees to realize their self-worth. If there is a difference between the two, employees will still expect to receive the same treatment.

3, high-cost era to improve the effectiveness of the pay incentive mechanism strategy

According to the evaluation of the effectiveness of the pay incentive mechanism of the relevant standards, we know that in order to establish an effective pay incentive mechanism, we need to work hard to achieve the reasonableness of the pay, comprehensive, incentive. A fair and perfect pay incentive mechanism not only attracts competitive talents externally, but also provides employees with more platforms to show themselves internally, focusing on their work and continuous improvement. Therefore, enterprises need to pay more attention to improving the effectiveness of the compensation incentive mechanism and improve the efficiency of human resource management. Under the new situation that people's material living standard has been improved comprehensively, enterprises are facing great pressure of market competition, and the demand for human resources has increased greatly, enterprises should make efforts to improve the effectiveness of compensation incentive mechanism from the following points. 3.1 Design a reasonable salary system through comprehensive market survey To realize the reasonableness of the salary system, it is indispensable to conduct a targeted and extensive market survey, and consider how to design the salary incentive mechanism from both the company itself and the external market environment, so as to be able to design a salary system that conforms to the actual situation of the company and is competitive in the market. On the one hand, the company should have a clear and specific positioning and description of its own business scope and service characteristics, so as to provide effective guidance on the requirements and design of positions and clearly define the contribution of different positions to the enterprise; on the other hand, the company should have good communication with its employees, and understand the needs and requirements of the employees by means of questionnaires, conversations, messages, and intranet, etc., including their opinions on the salary level. On the other hand, the company should communicate well with the employees through questionnaires, conversations, messages and internal networks to understand the needs and requirements of the employees, including their thoughts and expectations on the salary level, salary structure, incentives and benefits, etc. The company should try its best to satisfy the requirements of the employees in terms of salary and psychological needs, which will help to increase the recognition of the company by the employees. The external survey is an important way to maintain the effectiveness of the compensation and incentive mechanism. Through the external environment survey, the average level and dynamics of the remuneration can be understood, especially through the comparison with the remuneration level of other enterprises in the same industry to check and analyze the reasonableness of the remuneration level of each position in the enterprise, so as to determine the position and competitiveness of the remuneration provided by the company in the market. In addition to this, the company can also try to investigate the remuneration packages offered by the company where the employee worked before, find out the reasons for the employee's departure, and pay special attention to the gap between the remuneration packages offered by the company and those offered by the company where the employee left because of the departure. Only in this way can the company not only select people who are more suitable for the company, but also make the company's compensation and incentive system more competitive in the same market environment. 3.2 Reasonable evaluation of job content 3.2 Reasonable evaluation of job content to ensure the fairness of the remuneration mechanism Fairness is the foundation of the remuneration management system, including both internal and external fairness. Generally speaking, only when employees think that the payment of salary is fair will it produce incentive effects. Enterprises can use methods such as the factor counting method to scientifically evaluate the knowledge and skills required for a position, the complexity of the work, the difficulty and frequency of interpersonal relationships involved in the position, the degree of influence of the position on the organization's goals, the degree of responsibility and pressure in the work, etc., and accurately measure the value of each position to determine the payment standard, so as to ensure the internal fairness of the remuneration. In order to reflect the fairness and justice, the company's compensation incentive mechanism should be both "equal treatment" and "differentiated

Treatment". Equal treatment refers to the fair treatment of every employee of the company, no matter basic employees or middle and senior managers, they are all equal in front of the remuneration mechanism, including the evaluation of performance, the duties assigned to the post, the assessment of work and the way of promotion, and so on, in accordance with the existing remuneration mechanism to complete. On the other hand, it is necessary to do a good job of differentiation, i.e. to reflect the special role of each post, rather than to apply an across-the-board approach to remuneration. Because each position involves different work content, and thus requires different types of human resources, and then the duties and responsibilities performed by the employee, and the final contribution to the company's development and performance are not the same. Therefore, it is necessary to reasonably evaluate the positions corresponding to the remuneration, find out the evaluation indexes for accurately evaluating the performance of the employees, and implement differentiated remuneration incentives through differentiated performance evaluation, so as to better highlight the unique status of each position and shape the fairness of the remuneration incentive mechanism. The external competitiveness of remuneration policy does not mean that the overall remuneration level of the enterprise must be higher than that of other enterprises in the same industry, but it is to combine the construction of the enterprise remuneration system with the enterprise development strategy, and reasonably distribute the existing remuneration cost, so that the benefits brought to the enterprise by the staff with different degrees of importance and knowledge structure and working ability are different, and thus different weights of remuneration distribution are given to them. In this way, the incentive benefits of remuneration can be fully utilized. It is possible to implement a mixed pay strategy, whereby the pay level of employees who contribute a lot to the enterprise is positioned above the market pay level to ensure their market competitiveness. For employees in general positions, the salary level can be positioned equal to or lower than the market salary level, in order to restrain the overall salary cost of the enterprise, and make the enterprise salary system or salary system become an important leverage for realizing the development strategy of the enterprise. 3.3 Pay attention to material incentives other than pay incentives, improve the comprehensiveness of pay incentives According to the utility theory, when managers pay higher salaries to employees, the marginal pay increase

growth of incentives for employees is smaller, which makes the staff's behavior is more and more tend to be conservative and unambitious, and more and more unfavorable to the development of the enterprise. At the same time, as the distance to reach a certain expectation is shorter, the expectation will continue to decline, so that the incentive for employees to put in efforts will continue to decline. Therefore, simple monetary rewards have a limited effect. Monetary compensation, as a health factor in the two-factor theory, does not increase employee satisfaction. In the meantime, according to the comprehensive evaluation criteria, the company's compensation incentive mechanism should take into account not only the material incentives of the compensation mechanism, but also its spiritual and psychological incentives. The company should clearly realize that employees as "economic people" are also "social people", and single satisfaction in material life is not enough to make the employees satisfied with the remuneration, but at most, the employees are helpless to work in the company because of the need to live, without a sense of belonging. There is no sense of belonging. Material incentives are also limited, mainly in the form and amount of salary payment, in addition to the year-end bonus, company shares and other ways, but it is difficult for basic employees to enjoy. Therefore, the construction of salary incentive mechanism should focus on the development of incentive methods other than material incentive mechanism. Overseas countries have put forward the concept of 360-degree compensation, i.e., the sum of all the valuable rewards that an employee receives in the enterprise. Therefore, salary managers should understand the different needs of employees of different genders, ages and education levels for job security, family care, development potential, training opportunities and so on. They should design a system to meet these needs and ensure the realization of employees' spiritual remuneration. In addition to this, the company can also design a system in details to ensure the realization of employees' spiritual remuneration. In addition, the company can also be in the details, so that employees feel like home treatment, such as according to the length of service to provide employees with different lengths of leave, the provision of transportation benefits (free car, shuttle buses or transport subsidies), free meals (catering subsidies, afternoon tea snacks or free coffee), staff clubs, children's childcare and care for the elderly in the family of the employees, etc., really let employees in the work of the worry-free. This can not only improve the efficiency of the staff

work, but also let the staff feel the company's human culture of care, the company has a sense of attachment, a sense of belonging, thus reducing the staff of the company's pay defects or unreasonable pointed out the degree of resentment. 3.4 Maintaining the moderate flexibility of the remuneration system Enterprises should maintain the moderate flexibility of the remuneration system when carrying out remuneration management. In order to make a reasonable difference in the salary level between employees, the first thing an enterprise should do is to correctly assess the value of each position and determine a reasonable level for all employees. The pay gap between different levels and positions should be neither too big nor too small, and should be determined by the enterprise on the basis of the market pay survey and its own actual situation. Suitable enterprises may introduce broadband pay to enhance the flexibility of the enterprise's pay. At the same time, the salary level of individual employees should also be changed, which is based on the amount of workload of the employees, the quality of work accomplished and the operating efficiency of the enterprise in an appraisal cycle. 3.5 Emphasize the internal transparency of the remuneration system and strengthen remuneration communication In principle, a fair and reasonable remuneration system should be open. In principle, a fair and reasonable pay system should be open. A fair pay system should be able to reflect the performance of the employees and should be closely connected with the assessment of the enterprise. According to the expectancy theory of motivation, employees are motivated to work harder when they believe that their efforts will lead to better performance ratings and therefore more income. At the same time, equity theory tells us that incentives are influenced not only by absolute equity but also by relative equity. Therefore, in order to maximize the level of incentive provided by compensation, employees should understand how the organization defines and evaluates performance, and understand the levels of compensation associated with different levels of performance. An open compensation system makes it more likely that systemic inequities will be identified and corrected, which helps management to identify and correct errors and establishes a level playing field within the organization. An open pay system not only tells employees that management believes the pay policy is fair, but the very act of disclosing pay increases fairness by providing employees with an opportunity to scrutinize management. An open pay system facilitates communication within the organization and helps to develop a sense of trust among staff. At the same time, as mentioned in 3.1 above, effective pay communication between the payroll administrator and the staff will enable them to understand the external market levels of the labour force and the needs of the staff, so that they can formulate a remuneration package that meets the needs of the staff and maximizes their incentives. 3.6 Establishment of remuneration and incentive mechanism that keeps pace with the times A remuneration system is inevitably ill-considered at the beginning of its formulation, and the implementation process will gradually reflect the lack of scientific and reasonable aspects. In addition, even if the compensation system is reasonable at the beginning, it will gradually lose its reasonableness with the changes of the internal and external environment of the enterprise. All these situations require the enterprise to adjust the compensation system. Enterprises can find out the reasonableness of the salary system by means of market salary re-survey and salary symposium for employees, etc. If there are unscientific and imperfect places, they should choose the appropriate time to adjust and optimize. Adjustment of the remuneration system includes two aspects: on the one hand, it refers to the adjustment of the remuneration of individual or part of the employees; on the other hand, it refers to the adjustment of the remuneration scheme of all the employees. Adjustment of the remuneration of individual or part of the employees is based on the following two considerations: (1) the enterprise (1) did not consider well when formulating the remuneration scheme, or the situation at that time has changed, and found it necessary to adjust the remuneration of part of the employees in the process of implementation; (2) part of the employees (2) have made contributions to the enterprise, or have become the company's important technical researchers and developers or management personnel, and there is no way to improve their remuneration through promotion. Some employees (2) have made contributions to the enterprise or become important technical research and development personnel or management personnel, and there is no way to improve their treatment through promotion, this situation requires their salary adjustment.