What is the difference between the pay point pay system compared to the previous pay system

The difference between the pay point pay system and the previous pay system is:

That is, the broad-banded pay is compared with the pay point pay system.

I. Broadband pay is a kind of pay system between pay point pay and broadband pay, it will pay point pay or grade pay dozens of pay levels, after job evaluation, classified and consolidated to 8 to 20 levels range, compared with pay point system, grade pay and broadband pay, all have better adaptability.

Broadband pay refers to the regrouping of multiple pay grades and pay ranges into a relatively small number of pay grades and a correspondingly wide pay range. Typically, each pay grade has a range movement ratio of 100 percent or more between the highest and lowest values. A typical broadbanded compensation structure may have no more than four pay grades, and the range between the maximum and minimum of each pay grade may be 200% to 300%. In a traditional compensation structure, the range movement ratio is usually only 40% to 50%. As a new type of compensation structure design that matches with new management strategies such as organizational flattening, process reengineering, team-oriented and competence-oriented, broadbanded compensation structure comes into being. The biggest feature of broadband pay is compression of levels, compressing the original ten or even twenty or thirty levels into a few levels, and widening the pay range corresponding to each level, thus forming a new pay management system and operation process in order to adapt to the new competitive environment and business development needs at that time.

Advantages and disadvantages:

1. Advantages

●Breaks down the hierarchical concepts maintained and reinforced by the traditional salary structure. It reduces the hierarchical difference between the work of the broadband salary design, helps the enterprise organizational structure to flat development, and is conducive to improving the efficiency of the enterprise as well as creating a learning corporate culture, thus enhancing the core competitive advantage of the enterprise and the overall performance of the enterprise.

●Guiding employees to emphasize the growth of personal skills and ability. In the traditional hierarchical salary structure, even if the employee's ability has reached a higher level, but if there is no job vacancy in the enterprise, the employee still can't get a higher salary; but in the broadband salary system, even in the same salary broadband, the enterprise provides employees with a greater range of salary changes, as long as the employee pays attention to cultivating the skills and abilities required by the enterprise, and continuously improves the performance of the post can be obtained higher compensation. The company can get a higher compensation.

●Facilitates job rotation and fosters the ability of employees to grow cross-functionally in the organization. In the traditional hierarchical salary structure, the salary level of an employee is strictly linked to the position he or she holds, and changes in the level of the same position do not bring about changes in the salary level, but such changes make the employee have to learn new things, which makes the work more difficult and more laborious, and therefore, the employee is often reluctant to accept the rotation of the same level of the position. Under the broadband pay system, on the other hand, since the level of pay is determined by ability rather than position, employees are happy to enhance their ability through job rotation in relevant functional areas as a means of obtaining greater rewards.

2. Disadvantages

●The implementation of broadband pay will make it more difficult to promote employees than before. The traditional salary system has more job levels, it is easier for employees to get promoted, however, the broadband salary system has fewer job levels, employees are likely to always move inside a grade, and for a long time employees only have salary changes but no job promotion. In our country, job promotion is also an important incentive for employees, especially for knowledge-based employees or employees whose salary reaches a certain level. Reduced promotion opportunities may lead to low morale and loss of enthusiasm.

●Under the broadband pay model, managers have more freedom in determining employee salaries, thus making it possible for labor costs to rise significantly. The experience of the U.S. federal government has shown that compensation costs rise much faster under a broadband structure than under a traditional wage structure.

●Also, not for all organizations.

II. The pay point wage system is a new kind of compensation system that has arisen in domestic enterprises under the conditions of the market economy and provides a model to be followed for the reform of the wage and income distribution system of modern enterprises. It is a flexible wage distribution system that takes labor positions as the object and points as the standard, and determines the labor remuneration according to the actual contribution of individual workers to set coefficients and the fixed point value of wages obtained by the unit's economic efficiency.

The principle of efficiency priority, the principle of key incentives for special contributors to design a new pay system. That is, to take the pay point pay system plus special area pay system model to replace the previous distribution model.

Salary features:

1. The pay point salary system makes the salary distribution directly linked to the enterprise's efficiency and the individual employee's labor results, which reflects the principle of efficiency priority and conforms to the market orientation. The base value of the salary point is linked to the efficiency of the enterprise, and the floating value of the salary point is linked to the main economic indicators of the department to which the enterprise belongs, so that the income of the employees, the economic and technical indicators of the department, and the efficiency of the enterprise are linked to the market.

2, pay point wage system can objectively reflect the labor difference of the workers, in order to regulate the wage relationship between the various types of wages, the implementation of distribution according to work. Wages expressed in salary points than job skills wages easier to do wages to the front-line key positions, to scientific and technological management positions, to technical positions to pour section.

3, pay point salary by using different pay points to determine the wages of workers, can promote the workers to learn technology, multi-talented, the courage to take on the heavy burden, and make more contributions to the enterprise.

4, the implementation of salary point wage system, through quantitative assessment, is both a driving force for employees, but also pressure, so that the wage to play a motivational role.

5, pay point wage system due to the various types of allowances and bonuses into the number of employees in the pay point, and gradually achieve the income of wages, the staff is easy to accept, the management of the operation is simplified, easy to manage.