The corporate culture helps to determine the optimal salary structure and, conversely, salary determination can influence the work culture. Armstrong & Murlis give 4 examples of different types of work cultures and their respective approaches to salary determination.
The functional work culture occurs in companies that have defined job functions, and where employees follow well-defined workflows. These companies are frequently characterized by being very top-down driven and with central control. Here, payroll systems are often formalized and only flexible to a limited extent. Seniority and positions in the organizational hierarchy will often be the most crucial way to determine pay for each employee.
In the process culture working processes are designed to meet customer requirements, and ongoing quality assurance is part of the work. Here, you will often find a more flexible salary system, which is partly based on job analysis and evaluation, and therefore results in salary level differences between employees. When the employee is considered the most important resource, his or her skills are in focus, which is why competency development can be an important parameter in determining pay. Read more at www.activeglobe.com or follow PROBANA at LinkedIn www.linkedin.com/company/probana-management
In the time-based culture there is a lot of focus on the market constantly changing requirements. Employees play a key role in developing and maintaining competitive advantage and are therefore regarded as its most important resource. Such organizations can often have a flat structure, where reward systems are more flexible than in the process-oriented work culture. Work is based on the notion of "paying for the person ', which alludes to remuneration following the employee - and not the job title.
Network culture is characterized by ad hoc groups and temporary alliances, which dissolve after completion of tasks. Here, the market often comes into play on salaries, and salaries are fixed as bonus, commission, or as total payment for the project. Read more at www.activeglobe.com
For a reward strategy to be effective, there must be a connection between the new pay practices and the organization's unique characteristics - including its culture, technology, and conditions of work. The challenge of working with reward management is thus to form a new salary structure, which is in line with the company's core values. Find your next job through PROBANA Business schools Website.
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